don't blink - Moneycontrol

Annual Report 2009-2010

don’t blink

Forward-Looking Statement

In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects

and take investment decisions. This Report and other statements – written and oral – that we periodically make contain

forward-looking statements that set out anticipated results based on the management’s plans and assumptions.

We have tried, wherever possible, to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’,

’projects’, ’intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future

performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent

in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions.

Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual

results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind.

We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information,

future events or otherwise.

Contents

Board of Directors 14

Directors’ Report 16

Corporate Governance Report 28

Management Discussion & Analysis 42

Financial Statements 60

Corporate Information 135

Chairman’s Statement 02

Broadcasting 04

Games Content 06

Motion Pictures 08

New Media 10

TV Content 12

18

Director’s Report

Dear Members,

Your Directors take pleasure in presenting the 20th Annual Report on the operations of your Company for the financial year ended March 31, 2010.

1. FINANCIAL HIGHLIGHTS:

COMPANY STAND ALONE(figures in millions)

Particulars Year ended

2009-10Year ended

2008-09

Sales and Services ................................................................... 3,265.20 2,511.87

Other Income ............................................................................ 91.37 362.65Profit on Sale of Post Production Division ................................ – –TOTAL INCOME ....................................................................... 3,356.57 2,874.52Direct cost ................................................................................ 2,350.09 2,395.80Staff cost ................................................................................... 209.11 207.51Other Expenses ......................................................................... 225.39 154.38TOTAL Expenses ....................................................................... 2,784.59 2,757.69

PROFIT BEFORE INTEREST, DEPRECIATION AND TAX ........ 571.98 116.83

Less: Interest and finance charges (net) .................................. 165.34 (283.38)PROFIT BEFORE DEPRECIATION AND TAX ........................... 406.64 400.21Less: Depreciation ................................................................... 19.06 29.11PROFIT BEFORE TAX & BEFORE EXCEPTIONAL ITEM .......... 387.58 371.10Exceptional Items

Write off in accordance with Scheme ............................................ (4,577.21) –Transfer from Business Restructuring Reserve Account .................. 4,577.21 –PROFIT BEFORE TAX ............................................................... 387.58 371.10Less: Provision for Taxation – Current ....................................................................... 62.52 42.34 – Mat Credit (Entitlement)/Utilisation ........................... (71.46) 23.54 – Fringe Benefit Tax ...................................................... – 5.01 – Deferred Tax .............................................................. (191.99) 42.03Total of Taxes ............................................................................ (200.93) 112.92PROFIT AFTER TAX ................................................................. 588.51 258.18

Balance Profit brought forward ................................................. 1,004.09 745.91

NET PROFIT AVAILABLE FOR APPROPRIATION .................... 1,592.60 1,004.09

APPROPRIATIONS

Transfer to Debenture Redemption Reserve ........................... 200.00 –

BALANCE CARRIED TO BALANCE SHEET ............................. 1,392.60 1,004.09

DIRECTOR’S REPORT

19

CONSOLIDATED

Particulars Year ended

2009-10Year ended2008-2009

Sales and Services .................................................................... 6,640.53 6,065.54Other Income ............................................................................ 204.27 853.74

Profit on Sale of Post Production Division ................................ – –

Total of Income ......................................................................... 6,844.80 6,919.28

EXPENDITUREDirect Cost ................................................................................ 4,473.03 5,218.99

Staff Cost .................................................................................. 618.01 577.52Other Expenses ......................................................................... 1,076.16 677.01

Provision for Contingencies ...................................................... – 421.00

Total of Expenses ...................................................................... 6,167.20 6,894.52

PROFIT BEFORE INTEREST, DEPRECIATION AND TAX ........ 677.60 24.76Less: Interest and finance charges (net) ................................. 384.46 (76.61)PROFIT BEFORE DEPRECIATION AND TAX .......................... 293.14 101.37

Less: Depreciation ................................................................... 61.66 69.53

PROFIT BEFORE TAX & EXCEPTIONAL ITEM ........................ 231.48 31.84

Exceptional Items

Write off in accordance with Scheme ............................................ (6,077.21) –

Transfer from Business Restructuring Reserve Account .................. 6,077.21 –PROFIT BEFORE TAX .............................................................. 231.48 31.84

Less: Provision for Taxation – Current ....................................................................... 123.33 65.60

– Mat Credit (Entitlement)/Utilisation ............................ (130.22) 23.54 – Fringe Benefit Tax ....................................................... – 8.63 – Deferred Tax ............................................................... (263.36) (531.17)TOTAL of Taxes ......................................................................... (270.25) (433.40)

PROFIT BEFORE MINORITY INTEREST .................................. 501.73 465.24

Less: Minority Interest .............................................................. (31.59) 108.96

PROFIT AFTER MINORITY INTEREST ..................................... 533.32 356.28

Balance Profit brought forward ................................................. 1,773.11 1,416.83

APPROPRIATIONS

Transfer to Debenture Redemption Reserve ............................ 200.00 –

BALANCE CARRIED TO BALANCE SHEET ............................ 2,106.43 1,773.11

2. DIVIDEND

In order to conserve the resources to augment future growth, your directors do not recommend any dividend for the financial year 2009-10.

20

3. SUBSIDIARIES AND JOINT VENTURE COMPANIES:

As at March 31, 2010, the Company has the following subsidiaries viz.

1) IG Interactive Entertainment Limited. 2) UTV Communications (USA) LLC. 3) Ignition Entertainment Limited - UK and its subsidiaries i.e. Ignition Entertainment Limited (USA) and Ignition London Limited (formerly known as Digi-Guys Limited) 4) Indiagames Limited. 5) UTV TV Content Limited and its subsidiaries RB Entertainment Limited and UTV Tele Talkies Limited 6) First Future Agri and Developers Limited 7) UTV Global Broadcasting Limited and its subsidiaries i.e. Genx Entertainment Limited and UTV Entertainment Television Limited 8) UTV Games Limited and its subsidiary True Games Interactive 9) UTV New Media Limited.

As at March 31, 2010, IG Interactive Entertainment Limited., UTV Communications (USA) LLC, UTV Games Limited, UTV New Media Limited, First Future Agri and Developers Limited and UTV TV Content Limited are wholly-owned subsidiaries of your Company.

Ignition Entertainment Limited (UK) is 89.58% subsidiary and Indiagames Limited is 58.62% subsidiary of your Company.

Ignition Entertainment Limited (USA) and Ignition London Limited are 100% subsidiaries of Ignition Entertainment Limited (UK).

Genx Entertainment Limited and UTV Entertainment Television Limited are 100% subsidiaries of UTV Global Broadcasting Limited.

True Games Interactive is 80% subsidiary of UTV Games Limited.

UTV Tele Talkies Limited is 51% and RB Entertainment Limited is a 60% subsidiary of UTV TV Content Limited.

The statement pursuant to Section 212 (1) (8) of the Companies Act, 1956 in respect of subsidiaries is attached. The Consolidated Accounts of your Company and its subsidiaries are presented as part of this annual report in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India.

Your Company has been exempted by the Ministry of Company Affairs, vide their letter No. 47/342/2010-CL-III dated April 22, 2010 from attaching the Audited financial statements along with the reports of the Board of Directors and the auditors’ report pertaining to its subsidiary companies viz., 1) IG Interactive Entertainment Limited. 2) UTV Communications (USA) LLC. 3) Ignition Entertainment Limited - UK and its subsidiaries i.e. Ignition Entertainment Limited (USA) and Ignition London Limited (erstwhile Digi-Guys Limited) 4) Indiagames Limited. 5) UTV TV Content Limited and its subsidiaries RB Entertainment Limited and UTV Tele Talkies Limited 6) First Future Agri and Developers Limited 7) UTV Global Broadcasting Limited and its subsidiaries i.e. Genx Entertainment Limited and UTV Entertainment Television Limited 8) UTV Games Limited and its subsidiary True Games Interactive 9) UTV New Media Limited.

As per the terms of the exemption letter, a statement containing brief financial details of the Company’s subsidiaries for the year/period ended March 31, 2010 is included in the Annual Report.

Accordingly, the audited accounts of the above mentioned subsidiary companies are not attached.

The audited accounts of the subsidiary companies are also kept for inspection by any member at the Company’s registered office and copies will be made available on request to the members when requested.

IG INTERACTIVE ENTERTAINMENT LIMITED (IG)

IG was incorporated on September 6, 2004 with an intention to carry out Film Acquisition, Syndication and Distribution business in the United Kingdom. As at March 31, 2010 it posted sales of GBP 717,185 (Previous Year: GBP 618,286) and a net profit of GBP (1,403,531) (Previous Year net profit GBP 12,309).

On March 29, 2010 your Company purchased entire equity stake held by IG in Indiagames Limited (“Indiagames”) constituting 58.62% of the paid-up capital of Indiagames, thereby making Indiagames, its direct subsidiary.

During the year under review, the equity stake of IG in Ignition Entertainment Limited (UK) has been increased from 70% to 89.58% due to issue of additional shares on account of conversion of loan. Ignition Entertainment Limited (USA) and Ignition London Limited continued to be 100% subsidiaries of Ignition Entertainment Limited (UK).

UTV COMMUNICATIONS (USA) LLC (“UTV US”)

UTV US was incorporated on April 26, 2004 with an intention to carry out film acquisition, syndication and distribution business in the United State of America (North America) and other surrounding territories. As at March 31, 2010 it posted sales of USD 18,255,653 (Previous year: USD 8,633,908) and a net profit of USD 3,824,125 (Previous Year: USD 393,746).

DIRECTOR’S REPORT

21

UTV TV CONTENT LIMITED (“UTV TV”)

UTV TV a 100% subsidiary of your Company was incorporated on July 9, 2007 to carry on the business of producing, exhibiting and distribution of television serials/programmes for various television channels.

RB Entertainment Limited (“RBEL”) a 60:40 joint venture between UTV TV and Mr. Rajesh Beri was incorporated on May 6, 2008. UTV Tele Talkies Limited (“UTTL”) is a 51:49 joint venture between UTV TV and Mr. Prashant Jadhav and was incorporated on July 3, 2009 and Vikatan UTV Content Limited (“Vikatan”) is a 51:49 joint venture between UTV TV and M/s Vikatan Tele Vistas Private Limited and was incorporated on May 12, 2010. Hence, RBEL, UTTL and Vikatan incorporated with an intent of producing content for television channels are downstream subsidiaries of your Company.

FIRST FUTURE AGRI AND DEVELOPERS LIMITED (“FFADL”)

First Future Agri and Developers Limited was incorporated on April 7, 2008 and continued to be a 100% subsidiary of your Company. The status of FFADL was changed from a private limited company to public limited company on April 29, 2009.

UTV GLOBAL BROADCASTING LIMITED (“UGBL”)

UGBL was incorporated on June 6, 2007 with an intention to carry on the business of broadcasting of satellite television channels in India. On September 30, 2009, your Company purchased additional 10% equity stake in UGBL from Unilazer Exports and Management Consultants Limited (“Unilazer”) for a total consideration of Rs. 329.70 million. Subsequent to the aforesaid acquisition, the total stake of your Company in UGBL has been increased to 85%.

UGBL is a parent company for its two wholly-owned subsidiaries, Genx Entertainment Limited (Genx) and UTV Entertainment Limited (UETL). Genx and UETL are engaged in the business of uplinking and broadcasting entertainment (non-news/current affairs) channels from India. The Channels ‘UTV Bindass’ and ‘UTV Action’ are housed under Genx and the Channels ‘UTV Movies’ and ‘UTV World Movies’ are housed under UETL.

UTV GAMES LIMITED (UTV Games)

UTV Games Limited is a 100% subsidiary of your Company and was incorporated on September 5, 2008. During the year under review, your Company subscribed to 4,000,000 equity shares and 3,650,000 preference shares of US$ 1 each of UTV Games.

True Games Interactive, (“True Games”) an online gaming Company based in California, USA, continues to be 80% subsidiary of UTV Games.

UTV NEW MEDIA LIMITED (“UNML”)

UNML a 100% subsidiary of your Company was incorporated on September 20, 2007 to carry on the business of developing and maintaining websites and acquisition and exploitation of digital rights on mobile and digital platforms.

The Scheme of Amalgamation of ITNation Media Limited, a wholly-owned subsidiary of UNML (“ITNation”) with UNML was approved by Hon’ble High Court, Bombay on July 10,2009. Accordingly, IT Nation has been merged with UNML with effect from the appointed date viz April 01, 2008

Joint Venture

SMRITI IRANI TELEVISION LIMITED (“SITL”)

Smriti Irani Television Limited is a 50:50 Joint Venture between the Company and Mrs. Smriti Irani.

SITL was incorporated on December 6, 2007 to house the joint venture with Mrs. Smriti Irani for television content production. As at March 31, 2010 it posted sales of Rs. 3.50 million (Previous year: Rs. 50.28 million) and a net profit of Rs. 3.8 million (Previous year net loss Rs. 2.91 million).

During the year under review, Mrs. Smriti Irani and Mr. Zubin Irani the promoter directors of SITL resigned from directorship on August 5, 2009.

4. SCHEME OF ARRANGEMENT AND ISSUE OF ADDITIONAL SECURITIES

The Board of Directors of the Company at its meeting held on July 20, 2009 considered a proposal to consolidate the business of its subsidiaries UMP Plc (“UMP”) and UTV Motion Pictures (Mauritius) Limited (“UTV Mauritius”) into the Company. Pursuant to the Scheme of Arrangement (“Scheme”) under Section 391 to 394 (read with Section 78 and Section 100 to 103) and other applicable provisions of the Companies Act, 1956 sanctioned by the Honourable Bombay High Court on January 8, 2010, the entire assets and business of UMP and UTV Mauritius have been transferred and vested in

22

the Company with effect from the appointed date viz April 1, 2007. The above order has been filed with the Registrar of Companies, Maharashtra on January 25, 2010 and accordingly, the order has become effective from that date.

Pursuant to the Scheme having become effective, the Company has issued and allotted 6,436,782 equity shares of Rs.10 each, at a swap ratio of 1 equity share of the Company for every 3.75 shares of UMP held, on January 25, 2010 to the minority shareholders of UMP. The said issue of securities was listed on February 8, 2010 on National Stock Exchange Limited and Bombay Stock Exchange Limited and are regularly traded.

In pursuance of the Scheme, the Company has transferred a sum of Rs. 75,000 lakhs from the Securities Premium Account to Business Restructuring Reserve Account (‘BRR’). As at March 31, 2010 the Company has utilised BRR for writing off certain assets/expenses in accordance with the scheme and has transferred the balance amount of Rs. 11,025.30 lakhs to general reserve.

5. SCHEME OF ARRANGEMENT OF SUBSIDIARIES

During the year under review, Genx Entertainment Ltd. (“Genx”), UTV Entertainment Television Ltd. (“UETL”) and Indiagames Limited had undertaken a Scheme of Arrangement respectively under Section 391 to 394 read with Section 78 and 100 to 103 of the Companies Act, 1956 more particularly detailed in note no. C5(ii) & (iii) of Notes to Accounts (Schedule 21) of Consolidated Financial Statements.

The Hon’ble Bombay High Court has approved the Scheme of Arrangement of Genx, UETL and Indiagames Limited on June 9, 2010. The above order has been filed with the Registrar of Companies, Maharashtra on June 17, 2010 and accordingly, the order has become effective from that date.

6. EMPLOYEE STOCK OPTION SCHEME

Your Company had introduced Employee Stock Option Scheme by the name “UTV Employee Stock Option Scheme 2007” and “UTV Employee Stock Option Scheme 2009” (“the Scheme”) for permanent employees and directors of the Company & of its subsidiaries. The Scheme is being administered by Remuneration cum Compensation Committee.

Disclosure pursuant to Clause 12 of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines is given in the Annexure to this Report.

7. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Your Company adheres to high standards of Corporate Governance. Your Company has complied with the Corporate Governance code as stipulated under the listing agreement with the stock exchanges. A separate section on Management Discussion and Analysis and the Corporate Governance report along with a certificate from Company Secretary in practice confirming the level of compliance is annexed and forms a part of the Director’s Report.

8. DIRECTORS

During the year under review Mr. Robert Gilby and Mr. Sanjay Purohit was appointed as an additional directors of the company with effect from September 4, 2009.

Mr. Robert Gilby a qualified Chartered Accountant from the Institute of Chartered Accountants of England & Wales is a nominee director representing The Walt Disney Company (South-East Asia) Pte. Limited. Mr. Robert is also the Managing Director of Disney ABC International Television Asia Pacific.

Mr. Sanjay Purohit holds a MBA degree from the Indian Institute of Management, Bangalore. Mr. Sanjay is also the Executive Director of Marketing for Cadbury in India and Head of Chocolate Category in Asia.

Mr. Sanjaya Kulkarni, Darius Shroff and Mrs. Zarina Mehta retire by rotation and being eligible, offer themselves for re-appointment.

9. FIXED DEPOSIT

Your Company has neither accepted nor renewed any fixed deposit in respect of the year under review.

10. AUDITORS

M/s. Price Waterhouse & Co., Chartered Accountants, the present statutory auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint them as the statutory auditors of the Company until the conclusion of the next Annual General Meeting. M/s. Price Waterhouse & Co., have under Section 224(1) of the Companies Act, 1956 furnished the certificate of their eligibility for re-appointment.

DIRECTOR’S REPORT

23

11. AUDITORS’ REPORT

The Auditors’ Report to the shareholders does not contain any qualification.

12. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section of Section 217 of the companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the annexure, which forms part of this report.

13. PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956 read with rules framed there under is required to be a part of this report. However, pursuant to the provisions of Section 219 (b) (iv) of the Companies Act, 1956 the report and accounts are being sent to the shareholders of the Company excluding the statement of particulars under Section 217 (2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the company secretary at the registered office of the Company.

14. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956 the Board of Directors hereby state:

(a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the Directors have selected appropriate accounting policies and applied consistently and made judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2010 and of the profit of the Company for the year ended March 31, 2010;

(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) That the Directors have prepared the annual accounts on a going concern basis.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a responsible Corporate, your Company alongwith its Indian Promoters has constantly endeavoured to contribute to the development and upliftment of the social strata a corporate initiative termed as “SHARE”- Society to Heal Aid Restore Educate. Our CSR efforts focus on rain water harvesting, self help groups, sanitation, solar illumination, afforestation, healthcare and integrated village development. During the year your Company has undertaken various CSR projects, the notable amongst them is rain water harvesting in 120 villages. Your Company has made vigorous efforts to undertake its CSR projects in the villages of Raighad and Bhiwandi.

16. ACKNOWLEDGEMENTS

Your Directors would take this opportunity to thank all the stakeholders for their support and co-operation rendered to the Company during the year under review.

By order of the Board of Directors

for UTV SOFTWARE COMMUNICATIONS LIMITED

ROHINTON SCREWVALA CMD & Chief Executive Officer

Place: Mumbai Date: June 24, 2010

24

DISCLOSURES REGARDING STOCK OPTIONS

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“the SEBI Guidelines”), following disclosures are made in connection with the “UTV Employees Stock Option Scheme 2007” and “ UTV Employees Stock Option Scheme 2009”.

Sr. No.

Details Disclosures

UTV Employees Stock Option Scheme 2007

UTV Employees Stock Option Scheme 2009

A. Options Granted The Company has granted 1,000,000 options on January 11, 2008. Each option on exercise is convertible into one equity share of the Company having a face value of Rs.10. As on March 31, 2009 107,500 options had lapsed and 482,500 options were outstanding. During the year Company has granted 652,500 options.

The Company has granted 57,500 options on February 5, 2010. Each option on exercise is convertible into one equity share of the Company having a face value of Rs.10.

B. Pricing Formula As per market price defined in SEBI Guidelines on ESOP

As per market price defined in SEBI Guidelines on ESOP

C. Options Vested 1,60,000 as on March 31, 2010 Nil

D. Options Exercised Nil Nil

E. Total No. of shares arising as a result of exercise of options

N.A. Since none of the options have been exercised, no shares have been issued by the Company pursuant to exercise of options.

N.A. Since none of the options have been exercised, no shares have been issued by the Company pursuant to exercise of options.

F. Options Lapsed 142,500 Options lapsed during the year ended on March 31, 2010 due to resignation of employees. However, the said options are available to the Company for reissue.

Nil

G. Variations of terms of options N.A. Nil

H. Money realised by exercise of options N.A. N.A.

I. Total No. of Options in force 992,500 as at March 31, 2010 57,500 as at March 31, 2010

J. Employee wise details of options granted to

– Senior Managerial personnel Options have been granted to Senior Managerial personnel.

Options have been granted to Senior Managerial personnel.

– Employees who receive a grant in any one year of options amounting to 5% or more of options granted during that year.

Sidhharth Kapur, Rajeev Wagle, Jignesh Kenia, Amit Banka, Vikas Bahl and Deepak Lamba

Indrajit Ray, Jinoy Mathew and M. K. Anand

– Identified employees who were granted options, 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.

Nil Nil

Annexure to the Director’s Report

DIRECTOR’S REPORT

25

Sr. No.

Details Disclosures

K. Diluted Earning per share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with AS 20 ‘Earning Per Share’

N.A.

L. (Rs. in million)

Proforma Adjusted Net Income and EPS

Net Income as reported 588.51

Add: Intrinsic Value compensation cost

—

Less: Fair value compensation cost 20.29

Adjusted proforma net income 568.21

Earnings per share: Basic

As reported Rs. 14.48

Adjusted proforma Rs. 13.98

Earning per share: Diluted

As reported Rs. 14.43

Adjusted proforma Rs. 13.93

M. Weighted average exercise price of options granted during the year whose

(a) Exercise price equals market price N.A.

(b) Exercise price is greater than market price

Rs. 357/-

(c) Exercise price is less than market price

N.A.

Weighted average fair value of options granted during the year whose

(a) Exercise price equals market price N.A.

(b) Exercise price is greater than market price

Rs. 173/-

(c) Exercise price is less than market price

N.A.

N. Method and significant assumptions used during the year to estimate the fair value of options

(a) Method The Fair Value of options has been calculated using the Black Scholes Option pricing formula. The assumptions used in the estimation of the same has

been detailed as follows.

26

Sr. No.

Details Disclosures

(b) Significant Assumptions

Weighted average risk free interest rates

5.95%

Weighted average expected life 3.41 years

Weighted average expected volatility 65.35%

Weighted average Dividend yield 0.64%

Weighted average Stock price 463.72

PARTICULARS PURSUANT TO COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

Conservation of Energy

The operations of the Company are not energy intensive. However, the Company has taken adequate measures to reduce the energy consumption by using energy efficient hardware and other equipment. Air conditioners are used only when required. Further the Company has spread awareness among the employees on the need to conserve energy which is well adopted by the employees.

Research and Development

The Company is an integrated player in the Media and Entertainment Industry and carries out research and innovation in creating content in various segments of entertainment as part of its regular on going business.

Technology Absorption, Adaptation and Innovation

The Company keeps innovating, takes all measures necessary to absorb and adapt latest technology.

Foreign Exchange Earning and Outgo in Rs. million

Earnings in foreign exchange Rs. 239.77 (Previous Year: Rs. 603.84)

Expenditure in foreign exchange was Rs. 213.40 (Previous Year: Rs. 4.53)

DIRECTOR’S REPORT

27

Fina

ncia

l Inf

orm

atio

n o

f S

ubsi

dia

ries

Pur

suan

t to

Ap

pro

val o

f M

inis

try

of

Co

mp

any

Aff

airs

u/s

212

(8)

of

the

Co

mp

anie

s A

ct, 1

956

for

the

Fina

ncia

l Yea

r E

nded

Mar

ch 3

1, 2

010

(All

amou

nts

in M

illion

)

Sr.

No.

Parti

cula

rsRe

porti

ng

Curre

ncy

Clos

ing

Rate

Aver

age

Rate

Capi

tal

(Incl

udin

g Sh

are

War

-ra

nts

and

Pref

Sha

re

Capi

tal)

Rese

rves

Othe

r Li

abili

ties

Tota

l Li

abili

ties

Fixe

d As

sets

&

Curre

nt

Asse

ts

Deta

ils o

f In

vest

men

ts

(exc

ept

in c

ase

of

inve

stm

ent i

n su

bsid

iarie

s)

Tota

l As

sets

Tu

rnov

erPr

ofit/

(Los

s)

Befo

re

Taxa

tion

Prov

isio

n for

Taxa

tion

Prof

it/(L

oss)

Af

ter

Taxa

tion

Prop

osed

Di

vide

nd

1UT

V TV

Con

tent

Lim

ited

Rupe

esN.

A.N.

A. 0

.50

(0.4

7) 5

3.08

5

3.11

5

3.11

—

5

3.11

—

(0

.02)

—

(0.0

2)—

2UT

V Co

mm

unic

atio

ns

(USA

) LLC

Dol

lar

45.

14

47.

36

2.2

6 1

98.5

8 1

,121

.35

1,3

22.1

8 8

92.6

8 4

29.5

1 1

,322

.18

864

.59

181

.11

—

181

.11

—

3IG

Inte

ract

ive

Ente

rtain

men

t Lim

ited

(Sta

ndal

one)

GBP

6

8.03

7

5.69

1

,481

.62

(93.

01)

1,0

19.4

9 2

,408

.09

2,4

08.0

9 —

2,

408.

09

54.

28

(105

.70)

0.5

3 (1

06.2

3)—

4Ig

nitio

n En

terta

inm

ent

Limite

d (U

K– S

tand

alon

e)

GBP

6

8.03

7

5.69

1

,958

.44

(139

.43)

1,8

39.8

0 3

,658

.81

3,6

58.8

1 3

,658

.81

128

.10

(83.

19)

(27.

14)

(56.

05)

—

5Ig

nitio

n En

terta

inm

ent

Limite

d (U

SA)

Dol

lar

45.

14

47.

36

0.0

9 (2

2.39

) 1

,136

.31

1,1

14.0

1 1

,114

.01

1,1

14.0

1 3

86.4

0 (7

6.13

) (4

2.40

) (3

3.73

)—

6Ig

nitio

n Lo

ndon

Lim

ited

GBP

6

8.03

7

5.69

0

.34

(49.

21)

912

.76

863

.89

863

.89

863

.89

—

0.0

8 (2

.23)

2.3

1 —

7

Indi

agam

es L

imite

d R

upee

s N.

A.N.

A. 1

0.92

9

3.50

1

86.4

7 2

90.8

9 2

90.8

9 2

90.8

9 3

77.0

7 (3

4.89

) (0

.03)

(34.

86)

—

8Fir

st F

utur

e Ag

ri &

Deve

lope

rs L

imite

d R

upee

s N.

A.N.

A. 1

60.0

0 (8

.07)

15.

46

167

.39

167

.39

—

167

.39

—

(3.6

1) 1

.48

(5.0

9)—

9UT

V Ne

w M

edia

Lim

ited

Rup

ees

N.A.

N.A.

45.

00

(305

.43)

476

.34

215

.90

215

.90

—

215

.90

119.

07 (7

3.72

)0.

00 (7

3.72

)—

10UT

V Gl

obal

Br

oadc

astin

g Lim

ited

Rup

ees

N.A.

N.A.

27.

37

3,2

46.9

1 3

,242

.97

6,5

17.2

5 6

,517

.25

—

6,51

7.25

3

07.2

5 (2

48.7

1)—

(2

48.7

1)—

11Ge

nx E

nter

tain

men

t Lim

ited

Rup

ees

N.A.

N.A.

101

.61

(433

.48)

800

.26

468

.39

468

.39

—

468

.39

359

.44

(368

.22)

—

(368

.22)

—

12UT

V En

terta

inm

ent

Tele

visio

n Lim

ited

Rup

ees

N.A.

N.A.

64.

64

723

.58

584

.16

1,3

72.3

8 1

,372

.38

—

1,37

2.38

1

,164

.11

355

.09

—

355

.09

—

13UT

V Ga

mes

Lim

ited

Dol

lar

45.

14

47.

36

706

.44

(2.3

7) 7

.77

711

.85

711

.85

711

.85

—

(1.7

9)—

(1

.79)

—

14Tr

ue G

ames

In

tera

ctive

Dol

lar

45.

14

47.

36

542

.13

(54.

77)

194

.23

681

.59

681

.59

—

681

.59

—

(23.

09)

—

(23.

09)

—

15R

B En

terta

inm

ent

Limite

d R

upee

s N.

A.N.

A. 0

.50

(1.4

5)9.

19 8

.24

8.24

—

8.24

18.

50

1.0

6 —

1

.06

—

16UT

V Te

leta

lkies

Lim

ited

Rup

ees

N.A.

N.A.

0.5

0 (9

.09)

33.2

4 2

4.65

24

.65

—

24.6

5 1

8.28

(9

.09)

—

(9.0

9)—

30

Report on Corporate Governance

1. Company’s philosophy on Code of Governance

The company continues to focus and is committed to good Corporate Governance as it helps enhancement of long-term shareholder value and interest of other stakeholders. The Company is committed to its objective of accountability, transparency, independence and professionalism in all spheres of activities.

Corporate Governance is an integral part of the management and the Company follows procedures and practices in conformity with the Code of Corporate Governance as stipulated by SEBI.

2. Board of Directors

The Company’s Board comprises of two Executive Directors (including the Chairman cum Managing Director) and ten other Non-Executive Directors, having rich corporate, business and professional expertise.

a. The Board of Directors of the Company have an optimum combination of Executive and Non-Executive Directors with more than fifty percent of the Board of Directors comprising of non-executive directors. The Company has an Executive Chairman (Promoter) and one-half of the total numbers of Directors are independent.

b. None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more than 5 committees as specified in Clause 49, across all the companies in which he/she is a Director. The Directors have made necessary disclosures regarding Committee positions in other public companies as at March 31, 2010.

c. The names and categories of the Directors on the Board, their attendance at Board meetings held during the year and the number of Directorship and Committee Chairmanship/Membership held by them in other companies is given below. Other directorship do not include alternate directorship, directorship of private limited companies and of companies incorporated outside India. Chairmanship/Membership of Board Committees includes only Audit and Shareholders/Investors Grievance Committee.

d. Composition and Category of the Board

Sr. No. Name of the Director Category

No. of Directorship

in other Public Companies

Number of other Board

Committee as Chairman

Number of other Board

Committee as Member

1 Mr. Rohinton Screwvala Promoter-Executive (Chairman) 9 NIL NIL

2 Mrs. Zarina Mehta PromoterNon-Executive 9 NIL NIL

3 Mr. Deven Khote Executive Director 6 NIL NIL

4 Mr. Sanjaya Kulkarni IndependentNon Executive 5 1 3

5 Mr. Suketu Shah IndependentNon Executive 10 3 Nil

6 Mr. Darius Shroff Independent Non Executive 6 3 4

7 Mr. Andy Bird Non-IndependentNon Executive 1 NIL Nil

8 Mr. Prem Mehta Independent Non Executive NIL NIL Nil

9 Mr. Kevin Mayer Non-IndependentNon Executive NIL NIL NIL

10 Mr. Narendra Ambwani Independent Non Executive 1 NIL NIL

11 Mr. Sanjay Purohit* Independent Non Executive 1 NIL 1

12 Robert Gilby* Non-IndependentNon Executive NIL NIL NIL

*Appointed as an Additional Director(s) with effect from September 04, 2009

Attendance of the Directors and other Directorship/Committee membership

During the financial year 2009-10, eight board meetings were held and the gap between two meetings did not exceed four months. The dates on which the Board Meetings were held are as follows:

(Pursuant to Clause 49 of the Listing Agreement entered into with the Stock Exchanges and forms a part of the Director’s Report).

CORPORATE GOVERNANCE

31

28th April, 2009, 10th July, 2009, 20th July, 2009, 30th July, 2009, 04th September, 2009, 09th October, 2009, 27th October, 2009 and 28th January 2010.

The Annual General Meeting for the financial year 2008-09 was held on 04th September, 2009.

Sr. No

Director No of Board meeting held

No of Board meeting attended

Attendance at the last AGM

1 Mr. Rohinton Screwvala 8 8 Yes

2 Mrs. Zarina Mehta 8 5 Yes

3 Mr. Deven Khote 8 6 Yes

4 Mr. Sanjaya Kulkarni 8 7 Yes

5 Mr. Suketu Shah 8 1 No

6 Mr. Darius Shroff 8 6 Yes

7 Mr. Andy Bird 8 3 No

8 Mr.Prem Mehta 8 7 Yes

9 Mr. Kevin Mayer 8 1 No

10 Mr. Narendra Ambwani 8 7 Yes

11 Mr. Sanjay Purohit* 8 2 No

12 Mr. Robert Gilby* 8 1 No

*Appointed as an Additional Director(s) with effect from September 04, 2009

Note:

1. ‘Independent Director’ shall mean a Non Executive Director of the Company who:

a. apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the Company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associate which may affect independence of the directors;

b. is not related to promoters or persons occupying management positions at the board level or at one level below the board;

c. has not been an executive of the Company in the immediate preceding three financial years;

d. is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following:

i) the statutory audit firm or the internal audit firm that is associated with the Company, and

ii) the legal firms(s) and consulting firms(s) that have a material association with the Company.

e. is not a material supplier, service provides or customer or a lessor or lessee of the company, which may affect independence of the director;

f. is not a substantial shareholder of the Company i.e owing two percent or more of the block of voting shares;

g. is not less than 21 years of age.

2. None of the non executive directors have any material pecuniary relationship or transactions with the company. Necessary information to the extent required, as mentioned in Annexure 1A of Clause 49 of the Listing Agreement has been placed before the Board for their consideration.

3. None of the directors are related to each other except Mrs. Zarina Mehta, Non Executive Director, who is the wife of Mr. Rohinton Screwvala, CMD & CEO (“Promoter’’) of the Company.

Code of Conduct

The Board has laid down a code of conduct for all the Board Members and Senior Management of the Company. Senior Management includes team comprising of members of the category of Associate Vice President and above, including all functional heads. The Code of Conduct is posted on the Company’s website www.utvgroup.com

32

The declaration by the Managing Director affirming the compliance of Code of Conduct by all the Board Members and Senior Management personnel is annexed separately in the Annual Report.

3. Audit committee

The Audit Committee of the Company was constituted on May 20, 2000, in line with the provisions of clause 49 of the Listing Agreement with the Stock Exchanges read with Section 292A of the Companies Act, 1956.

Till January 7, 2009, the Committee comprised of Mr. Sanjay Kulkarni and Mr. Suketu Shah, Independent Directors and Mr. Rohinton Screwvala, Executive Director as the members of the committee. The Committee was reconstituted on January 7, 2009 and Mr. Prem Mehta, Independent Non-Executive Director was appointed as a member of the Committee. On January 27, 2009 the Committee was further reconstituted and Mr. Andy Bird, Non-Executive Director was appointed as member of the Committee in place of Mr. Rohinton Screwvala.

The terms of reference of the Audit Committee are broadly as under:

a. In relation to Financial Reporting:

Oversight of the company’s financial reporting process and the disclosure of its financial statements is correct, sufficient and credible, specifically reviewing with management the half yearly/annual financial statements before submission to the board, focusing primarily on:

— Any changes in accounting policies and practices and reasons for the same.

— Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause 2(AA) of Section 217 of the Companies Act, 1956.

— Major accounting entries based on exercise of judgement by management

— Qualification in draft audit report

— Significant adjustments arising out of audit

— The going concern assumption

— Compliance with Accounting Standards

— Compliance with listing and other legal requirements concerning financial statements

— Any related party transactions i.e. transactions of the company of material nature, with promoters of the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of Company at large

b. In relation to Audit

(i) Relevant to Internal and Statutory Audit

— Reviewing with the management, performance of statutory and internal auditors, adequacy of internal control systems.

— Reviewing financial and risk management policies.

— Reviewing with the management the quarterly financial statements before submission to the Board for approval.

(ii) Relevant to Statutory Audit

— Recommending appointment and removal of external auditors, fixing of audit fees and approval for payment of fees for any other services.

— Discussion with external auditors before the audit commences, the nature, scope and approach of audit as well as post audit discussion to ascertain areas of concern.

(iii) Relevant to Internal Audit

— Reasons for substantial defaults in payments to depositors, debenture holders, shareholders (in case of non payment of declared dividend) and creditors.

— Reviewing the scope and adequacy of the internal audit function.

— Review of reports of internal auditors primarily the significant findings and follow up thereon including findings relating to investigations regarding frauds, irregularities and material failures of internal control system.


33

The Audit Committee is empowered to:

a. Investigate any activity within its scope of role.

b. Seek information from any employee.

c. Obtain outside legal or other professional advice.

d. Secure attendance of outsiders with relevant expertise, if it considers necessary.

The Audit Committee shall review the following information:

e. Management discussion and analysis of financial condition and results of operations

f. Statement of significant related party transactions (as defined by the audit committee), submitted by management

g. Management letters/letters of internal control weaknesses issued by the statutory auditors

h. Internal audit reports relating to internal control weaknesses; and

i. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.

j. The appointment of Chief Financial Officer (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.

In its meetings, the Audit Committee considered audit reports covering operational, financial and other business areas and also the quarterly results of the Company. The Group Chief Financial Officer and the Statutory Auditors are special invitees to the meeting. The Company Secretary acts as Secretary of the Audit Committee.

All the members of the Audit Committee are finance literate and do possess sound knowledge of accounts, finance, audit and taxation.

The previous Annual General Meeting of the Company held on September 4, 2009 was attended by Mr. Sanjaya Kulkarni, the Chairman of the Audit Committee.

During the financial year 2009-10, the committee met five times on April 28, 2009, July 10, 2009, July 30, 2009, October 27, 2009, and January 28, 2010 and required quorum was present at all the meetings.

The Composition of the Audit Committee and particulars of meetings attended by the members of the Audit Committee are give below:

NameChairman/Member

Category No. of meetings held during the

year 2009-10

No. of meetings Attended

Mr. Sanjaya Kulkarni Chairman Independent, Non-Executive 5 5

Mr. Suketu Shah Member Independent, Non-Executive 5 NIL

Mr. Prem Mehta Member Independent, Non-Executive 5 5

Mr. Andy Bird Member Non-Independent, Non-Executive 5 3

4. Remuneration Committee

The Board of Directors at their meeting held on July 24, 2006 has constituted a Remuneration Committee. Till November 6, 2008 the Committee comprises of Mr. Sanjaya Kulkarni, Mr. Kishore Biyani and Mr. Darius Shroff, an Independent Directors as the members of the committee. Mr. Kishore Biyani ceased to a director and member of the Committee on account of resignation with effect from November 6, 2008. Effective January 27, 2009 Mr. Prem Mehta an Independent Director was appointed as the member of the Committee. The Committee also acts as Compensation Committee for grant of ESOP to the eligible employees of the Company.

During the financial year 2009-10, the committee met two times on May 15, 2009 and February 5, 2010 and required quorum was present at all the meetings.

Terms of Reference

The functioning and terms of reference of the Committee have been finalised in line with the recommendations as prescribed under the Listing Agreement with the Stock Exchanges with particular reference on all elements of remuneration packages of all the Directors along with performance criteria, service contracts, severance fees etc., stock options details, if any.

34

Remuneration of Directors

None of the Non-Executive Directors have any material pecuniary relationship or transactions with the Company.

Remuneration to CMD & Chief Executive Officer and other Executive Directors.

The appointment of CMD & Chief Executive Officer and other Executive Directors is governed by resolutions passed by the Board of Directors and Shareholders of the Company, in terms of the Companies Act, 1956.

Details of remuneration to the Executive Directors for the year ended March 31, 2010.(Rs. in million)

Name of the Director Salary Perquisites Commission

1 Rohinton Screwvala 6.52 4.25 Nil

2 Deven Khote 3.60 0.07 Nil

Service Contract

1 For a period of five years w.e.f August 1, 2006

2 For a period of three years w.e.f April 27, 2010

Remuneration to Non-Executive Directors

The Non Executive Directors of the Company do not draw any remuneration from the company other than sitting fees of Rs. 10,000/- per meeting, for attending each Board meeting or a meeting of the Committee thereof. At present no commission is payable to the Non-Executive Directors out of the net profits of the company.

The shareholding of Non-Executive Directors at March 31, 2010 are as under:

Name of the Director No. of Shares held

Sanjaya Kulkarni NIL

Darius Shroff 2000

Zarina Mehta 800

Narendra Ambwani 500

Employees Stock Option Scheme-2007 (ESOP)

In terms of resolution passed by the members on September 25, 2007 the Company has implemented ESOP Scheme, 2007 for its present and future permanent employees, directors of the Company and also for the permanent employees and directors of the subsidiary companies. The details of ESOP are provided in Director’ report.

Employees Stock Option Scheme-2009 (ESOP)

In terms of resolution passed by the members on September 4, 2009 the Company has implemented ESOP Scheme, 2009 for its present and future permanent employees, directors of the Company and also for the permanent employees and directors of the subsidiary companies. The details of ESOP are provided in Director’ report.

5. Shareholders/ Investors Grievance Committee

The Company has constituted a ‘Share Allotment/Share Transfer/Shareholders Grievance Redressal Committee’ on May 20, 2000, which was subsequently re-designated as ‘Shareholders/Investors Grievance Committee’ on July 30, 2005, to specifically look into the redressal of investors grievances. Further the said committee was reconstituted on January 25, 2007. The committee has the following powers i.e. to receive, consider and effect

a. Share Transfers

b. Deletion of the name of the shareholders

c. Transmission of shares

d. Splitting of shares

e. Consolidation of shares

f. Issue of new shares in lieu of old certificates

g. Address grievances of shareholders and provide solutions, refer the matter to Board, in case necessary.


35

The Composition and other particulars of ‘Shareholders/Investors Grievance Committee’ are as follows:

NameChairman/ Member

Category No. of meetings held during the

year 2009-10

No. of meetings Attended

Mr. Sanjaya Kulkarni Chairman Independent, Non-Executive 1 1

Mr. Deven Khote Member Non Independent, Executive 1 1

The Company Secretary acts as Compliance officer of the committee. During the year the committee met only once on January 25, 2010 and the necessary quorum was present for the meeting.

Name, designation and address of

Compliance Officer: Mohd. Sajid Ali Company Secretary UTV Software Communications Limited 1181-82, 8 Floor, Solitaire Corporate Park Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai - 400 093 Email: [email protected] Website: www.utvgroup.com

Details of Complaints received and redressed:

Opening Balance Received during the year Resolved during the year Closing Balance

NIL 12 12 NIL

All Share transfers and correspondence thereon with the shareholders are handled by the Company’s Registrars and Share Transfer Agents viz Karvy Computershare Private Limited, Plot No.17 to 24, Near Image Hospital, Vittalrao Nagar, Madhapur, Hyderabad - 500081.

The Company Secretary is entrusted the task of overseeing the share transfer work done by the Registrar and Share Transfer Agents, attending to grievances of the shareholders and inventors intimated to the Company, compliances with this statutory and regulatory requirements, etc. directly or through SEBI, and stock exchanges.

There were no transfers pending as at March 31, 2010.

6. General Body meetings

Details of location and time, where last three Annual General meetings held.

Meetings for the Financial year

2006-07(17th AGM)

2007-08(18th AGM)

2008-2009(19th AGM)

Date September 25, 2007 August 12, 2008 September 4, 2009

Time 10.30 a.m. 10.30 a.m. 10.30 a.m.

Venue The Hall of Culture, Discovery of India Building, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai - 400 018.

The Hall of Culture, Discovery of India Building, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai - 400 018.

The Hall of Culture, Discovery of India Building, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai - 400 018.

36

Details of Extra Ordinary General Meeting held during the last three years:

Meetings for the Financial year

2006-07(EGM)

2007-08 2008-2009(Court Convened Meeting)

Date March 17, 2008 NA October 14, 2009

Time 10.30 a.m. NA 10.30 a.m.

Venue for all the three financial years

Hotel Kohinoor Continental, Emerald I and II, Andheri-Kurla Road, Andheri (East), Mumbai - 400059

NA The Hall of Culture, Discov-ery of India Building, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai - 400 018

Special Resolutions 1. For increasing share capital from Rs. 36 crores to Rs. 45 crores

2. For altering Articles of Association

3. For altering Memoran-dum of Association

4. Preferential Issue under Section 81(1A)

NIL For approving the Scheme of Arrangement between the Company, UMP PLC and UTV Motion Pictures (Mauritius) Ltd.

The Special Resolution passed at the last three Annual General Meetings are as under.

a) At the 17th Annual General Meeting held on September 25, 2007 following special resolutions were passed:

i. Amendment to Capital Clause of Memorandum of Association, on account of increase in Authorised Share Capital.

ii. Amendment to Articles 4 of Article of Association, on account of increase in Authorised Share Capital.

iii. Issue of equity shares, convertible debentures, FCCBs, GDR, ADR, etc not exceeding US $ 100,000,000 to Qualified Institutional Buyers pursuant to Section 81 of the Companies Act, 1956.

iv. Issue of equity shares under UTV Employees Stock Option Scheme 2007 (ESOP) to the present and future employees, directors of the Company pursuant to Section 81(1A) of the Companies Act, 1956.

v. To extend the benefit of UTV Employees Stock Option Scheme, 2007 to permanent employees and directors of subsidiary companies

vi. Appointment/Re-appointment of Mr. Deven Khote as Executive Director for a period of 3 years from April 27, 2007.

b) At the 18th Annual General Meeting held on August 12, 2008 no special resolution was passed.

c) At the 19th Annual General Meeting held on September 04, 2009 following special resolutions were passed:

i) Issue of equity shares under UTV Employees Stock Option Scheme 2009 (ESOP) to the present and future employees, directors of the Company pursuant to Section 81(1A) of the Companies Act, 1956.

During the year under review, the following special resolutions was passed through postal ballot:

(1) On June 08, 2009 by Special Resolution under Section 31 of the Companies Act, 1956, for the alteration of Articles of Association of the Company.

(2) On November 12, 2009 by Special Resolution for (i) Amendment to Capital Clause of Memorandum of Association of the company, on account of increase in Authorised Share Capital (ii) Issue of equity shares US $ 150,000,000 to QIB pursuant to Section 81 of the Companies Act, 1956.

Based on the report of Mr. Sanjay Parab, a Practicing Company Secretary and Scrutinizer for conducting the aforementioned Postal Ballot, the Chairman declared that the voters casted in favour of resolution/s is three times more than vote casted against the resolution/s, hence resolutions as aforesaid was passed with requisite majority.

7. Disclosures:

Related Party Transactions

There are no materially significant related party transactions of the Company with key managerial personnel, which have


37

potential conflict with the interest of the company at large. However, the related party Disclosures, as required to be mentioned in accordance with Accounting Standards (AS) 18, have been provided on note 14 of Schedule 21 to the Accounts contained in this report.

Disclosure of accounting treatment in preparation of financial statements

Your Company has followed the guidelines of accounting standards laid by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements.

Compliances

The Company had materially complied with the requirement of the Stock Exchange, SEBI and other statutory authorities on all matters relating to capital market during the last three years. No pecuniary structures have been imposed on the company by any of the above-mentioned authorities.

Risk Management

The company has laid down procedures to inform the Board Members about the risk assessment and minimisation procedures. These procedures are periodically reviewed to ensure that Executive Management controls risk through means of properly defined framework.

CEO & CFO Certification

Certificate from Mr. Rohinton Screwvala, CMD & CEO and Mr. Rajeev Wagle- Group Chief Financial Officer, in terms of Clause 49(v) of the Listing Agreement entered into with Stock Exchanges, was placed before the Board of Directors of the company at its meeting held on June 24, 2010.

8. Means of Communications

In line with good corporate governance practices, the Company’s quarterly un-audited/audited financial results are normally published in Business Standard & Free Press Journal, (English language newspapers) and in Navshakti (vernacular language newspapers). The update is posted on the corporate website www.utvgroup.com. The Company also hosts conference calls with analysts and fund managers after declaration of quarterly financial results, the text of which is also made available on the website. These are not sent to the shareholders individually.

The ‘Management Discussion and Analysis Report’ forms part of the Directors report.

9. General Shareholder information

a. Annual General meeting

Date August 12, 2010

Time 11.00 a.m.

Venue The Hall of Culture, Discovery of India Building, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai - 400018.

b. Financial Calendar 2010-11 (Tentative and subject to change)

Year ending March 31

Financial Reporting For the first Quarter ending June 30, 2010

On or before July 15, 2010

For second Quarter and the half year ending September 30, 2010

On or before October 28, 2010

For the third Quarter ending December 31, 2010 On or before January 27, 2011

Audited Results for the year ending March, 2011 On or before May 30, 2011

c. Date of Book closure August 2, 2010 to August 12, 2010 (both days inclusive).

d. Dividend payment date Not applicable

e. Listing on Stock Exchanges The National Stock Exchange of India Limited (NSE)The Bombay Stock Exchange Limited (BSE)

38

f. Stock Code The National Stock Exchange of India Limited:UTVSOF, EQ

The Bombay Stock Exchange Limited: 532619

g. Demat ISIN Number For NSDL and CDSL

INE 507B01022

h. Table below respectively gives the monthly high and low prices and number of shares traded at the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited, Mumbai (BSE) for the year ended on March 31, 2010.

The National Stock Exchange of India Limited

Month High (Rs.) Low (Rs.) Total no. of Shares Traded

April, 2009May, 2009June, 2009July, 2009Aug, 2009Sep, 2009Oct, 2009Nov, 2009Dec, 2009Jan, 2010Feb, 2010Mar, 2010

367.00419.90479.45444.90519.30519.00474.40482.00509.40577.00518.40489.00

194.00290.25351.30307.05406.65434.10410.00372.35441.65475.55462.00445.10

6,109,4222,723,1152,315,5111,485,7541,904,4181,373,199

672,439981,758673,561

1,005,295232,714312,638

The Bombay Stock Exchange Limited (BSE)

Month High (Rs.) Low (Rs.) Total no. of shares Traded

April, 2009May, 2009June, 2009July, 2009Aug, 2009Sep, 2009Oct, 2009Nov, 2009Dec, 2009Jan, 2010Feb, 2010Mar, 2010

367.00419.00479.00444.50516.75518.55470.55474.00509.00576.00577.50514.00

193.00292.10354.05307.00408.00431.00375.00370.00447.00475.00460.05450.55

2,574,927935,488953,853509,442992,556469,961209,493400,233358,254434,252296,08765,158

UTV Price vs S&P CNX Nifty

-

100

200

300

400

500

600

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Month

UT

V P

rice

-

1,000

2,000

3,000

4,000

5,000

6,000

S&

P C

NX

Nif

ty P

rice

UTV NIFTY


39

i. Registrar and Transfer Agent

Name and address : Karvy Computershare Private Limited Plot No.17 to 24, Near Image Hospital Vittalrao Nagar, Madhapur, Hyderabad-500081

Tel No. : 040 2420815-820

Fax No. : 040 2340814

Email : [email protected]

Contact Person : Mr. P.A. Varghese

Name and address : Karvy Computer Share Private Limited 16/22, Bake House, Maharashtra Chambers of Commerce Lane, Opp. MSC Bank, Kalaghoda, Fort, Mumbai 400 023.

Tel No. : 022 5638 2666

Fax No. : 022 5633 1135

Email : [email protected]

Contact Person : Francis J Fernandes

j. Share Transfer System:

The shares of the company are traded in the compulsory demat mode by all the investors. The share transfer committee meets regularly to approve transfer of shares in physical form. The transfer are approved in 10 to 15 days time from the date of receipt, if the transfer documents are in order.

k. Distribution of shareholding as on March 31, 2010

Range No. of equity shares No. of Shareholders % of shareholders No. of Shares % to no. of shares

Upto 500 14,678 97.32 780,192, 1.92501 – 1,000 173 1.14 134,962 0.331,001 – 2,000 84 0.55 124,138 0.302,001 – 3,000 29 0.19 71,985 0.173,001 – 4,000 16 0.10 58,163 0.144,001 – 5,000 10 0.06 47,685 0.115,001 – 10,000 17 0.11 129,547 0.3110,001 and above 74 0.49 39,285,578 96.68TOTAL 15,081 100% 40632250 100%

UTV Price vs BSE Sensex

-

100

200

300

400

500

600

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Month

UT

V P

rice

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

BS

E S

ense

x

UTV Price BSE SENSEX

40

l. Shareholding as at 31st March, 2010

Category No of Shares Held % of holdingA Promoter’s Holding 1 Promoters: Indian Promoters Rohinton S. Screwvala 2,172,347 5.35 Unilaser Exports & Management Consultants Ltd. 3,231,740 7.95 Zarina Mehta 800 0.00 Foreign Promoters: Unilaser Hongkong Limited 2,565,593 6.31

The Walt Disney Company (Southeast Asia) Pte. Ltd. 20,497,994 50.45 Sub Total 28,468,474 70.06B Non-Promoters Holding2 Institutional Investors a. Mutual Funds and UTI 1,870,337 4.60 b. Banks Financial Institutions, Insurance Companies (Central/State Govt. Institutions/Non Govt. Inst.) 404,427 1.00 c. Foreign Institutional Investors (FIIs) 2,953,330 7.27 Sub Total 5,228,094 12.873 Others

a. Bodies Corporate 881,772 2.17 b. Indian Public 1,210,480 2.98 c. Any Other (please specify) i) Trust 37,390 0.09

ii) HUF 56,706 0.14 iii) Clearing Members 4,340 0.01

iv) Foreign Nationals 39,988 0.10 v) Foreign Companies 4,366,476 10.75 vi) Directors 200,800 0.49

vii) NRIs 137,730 0.34 Sub Total 6,935,682 17.07

GRAND TOTAL 40,632,250 100.00

m. Dematerialisation of shares and liquidity: The company’s shares are compulsorily to be traded in dematerialised form 33,025,892 equity shares of Rs. 10/- each

representing 81.28% of the equity capital of the Company have been dematerialised as at March 31, 2010. The Company’s shares are regularly traded on The National Stock Exchange of India Limited (NSE) and the Bombay

Stock Exchange Limited (BSE). n. Plant Locations: The Company is into media and entertainment software industry and operates from its Registered office at

1181-82, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093. o. Address for Correspondence: UTV Software Communications Limited 1181-82, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093. Tel No. 022 –4098 1400 Fax No. 022- 4098 1510/40981650 Email: [email protected] Website: www.utvgroup.com

For and on behalf of the Board

Rohinton ScrewvalaPlace : Mumbai Chairman & Managing Director Date: June 24, 2010


41

(CERTIFICATE OF COMPLIANCE OF CORPORATE GOVERNANCE AS REQUIRED UNDER THE LISTING AGREEMENT WITH THE STOCK EXCHANGE)

To the MEMBERS OF UTV SOFTWARE COMMUNICATIONS LIMITED

We have examined the compliance of Corporate Governance by UTV Software Communications Limited for the financial year 2009-10, as stipulated in clause 49 of the Listing Agreement entered into by the said company with the Stock exchange(s).

The Compliance of conditions of Corporate Governance is responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring compliance with conditions of the Corporate Governances. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanation given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement.

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

For SANJAY PARAB & Co.

Company Secretaries(Prorietor)Membership No. 16718 Cop No. 7093

Dated: June 24, 2010Place: Mumbai

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH COMPANY’S CODE OF CONDUCT.

This is to confirm that the Company has adopted a Code of Conduct for its each Director and Senior Managers of the Company. The Code of Conduct is available on the Company’s website.

I confirm that the Company has in respect of the financial year ended on March 31, 2010 received from the senior managers of the Company and the members of the Board of compliance with the Code of Conduct as applicable to them.

For the purpose of this declaration, Senior managers meaning Senior Management team comprising of members of the category of Associate Vice President and above, including all functional heads.

Rohinton ScrewvalaCMD & Chief Executive Officer

Place: Mumbai Date : June 24, 2010

44

Management Discussion and Analysis

SUMMARY OF BUSINESS

We are a media and entertainment company headquartered in India, with growing operations around the world. We began as a television content production company

in 1990 and have since developed into an integrated media and entertainment company. Our business is divided into five business streams: (1) Television; (2) Movies; (3) Games Content; (4) Broadcasting; and (5) New Media

Television involves production of content and the sale of commercial air time to advertisers on networks throughout India. UTV also sells air time on Sun Network,

India’s largest regional network, across its four channels: Sun TV, Surya TV, Udaya TV and Gemini TV.

Movies division focuses on the production and co-production of Indian films and the distribution of such films across various platforms. UTV has more than a decade of experience

in movie production having produced/co-produced movie blockbusters such as Jodhaa Akbar, Kaminey, Fiza, Swades, Lakshya and Rang De Basanti. UTV has also co-produced Hollywood movies

including The Namesake and The Happening.

Games Content includes video game content development, publishing and global distribution across mobile, online and console platforms. UTV has acquired a majority stake

in three Games Content companies – Ignition, which creates cutting edge high-end console Game Content, Indiagames, India’s largest publisher of games for mobile phones, and True Games, a U.S.-based start-up company

which is developing games for the online PC platform.

Broadcasting involves marketing and broadcasting a diverse set of channels on television in India. UTV has strategically focussed on specialty genre channels

which are available on cable and satellite distribution.

New Media is a business that attempts to converge UTV’s content development and creative capabilities to the mobile and internet platforms. This segment specifically

targets a youth audience in domains such as entertainment (television, films and music), gadgets and technology.

INDUSTRY OVERVIEW

Indian Media &Entertainment (M&E) industry saw some difficult times in the last two years due to the economic slowdown. The industry is dependent on advertising for almost 38% of its revenues and was hit due to shrinking ad budgets of the corporate world showing a modest growth of around 1.4% in 2009 compared to 12% in 2008. However, disruptive product thinking and cost efficiencies kept sectors afloat. Industry players adopted several innovative content formats and strategies to increase choices for the end consumer and leading to industry evolution. Cost efficiencies identified in the last year proved to be blessings in disguise for the industry, many of which are here to stay.

In spite of the modest growth shown by the Industry in the current year, the estimates are bullish for industry growth in future years. The overall M&E industry size grew from INR 579 billion in 2008 to INR 587 billion at a rate of 1.4% and is

Media spend in India as a percent of GDP is 0.41% which is just half of world’s average of 0.80% and much lower compared to developed countries like US and Japan.

MANAGEMENT DISCUSSION AND ANALYSIS

45

expected to increase by ~11% in 2010, as the industry witnesses a recovery. The CAGR from 2006 to 2009 has remained at 10% and the industry is expected to grow at a rate of 13% in next five years. Media spend in India as a percent of GDP is 0.41% which is just half of world’s average of 0.80% and much lower compared to developed countries like US and Japan. This indicates a clear opportunity and growth potential for the industry in India.

Key growth drivers in future

• Digitisation – Digital distribution platforms have improved the reach and content quality for end user

• Regionalisation – Regional markets contribution to revenues expected to rise due to increase in literacy and higher disposable incomes in Tier 2 & 3 cities. Advertisers are also increasing focus on rural markets due to the saturation of urban markets.

• New Media – New media is bringing about a revolution by merging the functionalities of customer end terminal devices and creating new avenues for content monetising. 3G to be big catalyst in growth story.

• Markets – New players continuously emerging to capture newer set of audiences with advancements in their product, marketing and distribution to tap these customer segments.

• Innovation – New thinking across product, process, marketing, distribution and business models.

• Pay Markets – Subscription revenues are becoming increasingly important in the revenue pie for the M&E industry. Growth is likely to be driven by research in consumption trend and identifying audience willing to pay.

• 360 Degree connect – Players are looking beyond the traditional mediums by reaching the consumers across multiple platforms/touch points in order to establish a stronger connect.

Indian Film Industry

The Indian film industry is one of the biggest in the world and eclipses even Hollywood in terms of number of films produced and admissions (annual theatrical admissions in Indian cinemas are around 3 billion, as compared to 1.5 billion tickets sold annually in the US). However, Indian film industry cannot match the revenue numbers with Hollywood on account of lower ticket prices and relative lack of multiplexes.

2009 was a tough year for the film industry with multiplex strike, general elections, and swine flu keeping the audience away. Lack of good content also contributed to the low success ratio of the industry. The global film studios strengthened their India presence with Fox Star studios and Warner Brothers producing Indian movies and new technologies paving the way for several 3D movies to be released.

Film industry saw a declining trend this year by an estimated 14% to INR 89.3 billion from INR 104.4 billion in 2008, largely on account of lower domestic theatrical collections in 2009 compared to the previous year. Indian Film industry is expected to grow at a rate of 8% in 2010; and then at a CAGR of 9% between 2010 and 2014 in the subsequent years. The key growth drivers are increased occupancy levels at multiplexes, higher number of digital screens, and diversified monetizing opportunities with 3G services.

New media is bringing about a revolution by merging the functionalities of customer end terminal devices and creating new avenues for content monetising. 3G to be big catalyst in growth story.

46

Indian Television Industry

TV with a size of INR 257 billion in 2009 is the largest segment of the Indian M&E industry. The industry has undergone rapid transformations

in the last few years with a reach of almost 500 million TV viewers and penetration of the TV households increasing from ~50% five years back to

~60% now. Thus, TV provides an attractive medium for advertisers.

The numbers of channels and genres have also expanded in the transformation process. The number of channels has increased from 120 in 2003 to over 460 in 2009.

The number of genres and niches expanded as well with increased presence in news, kids, infotainment and lifestyle and TV also saw significant growth in the regional channels. In addition

to broadcasting, TV distribution evolved greatly with the growth of digital mediums and associated offerings to viewers like Digital cable, DTH and IPTV.

Overall the industry grew from INR 241 billion in 2008 to INR 257 billion in 2009 recording a growth rate of 7% compared to 14% last year. It is expected to reach

a size of INR 521 billion in the next 5 years i.e. by 2014 at a CAGR of 15.2 percent. The growth in advertisement revenues is expected at a rate of 15.6 percent which is marginally higher than the subscription revenues growing at a rate of 15 percent.

It is anticipated that digitization will increase the share of broadcasters in the total subscription pie from 18% in 2009 to 27% in 2014. Subscription revenues are

currently growing at a CAGR of 24% compared to ad revenues with around 15.6% growth rate. Inspite of increasing subscription revenues, ARPUs are expected to remain

flat in 2010 and grow marginally from thereon. The only increase in revenues is through Value Addition Services (VAS), such as games, video on demand, etc. The current ARPU levels

in the country vary between INR 85 to 450 per month across platforms and user groups.

The above mentioned factors like increased digitization, growing regional content, innovative content and global footprint will contribute to the future growth of the industry.

Games Content Industry

The interactive entertainment industry, or game industry, consists of several participants: the manufacturers of dedicated video game consoles and portable devices; the publishers of packaged software products that can be

played on consoles, handheld devices and PCs; the developers of packaged software; and the producers of games that can be accessed digitally, whether through a mobile device, the Internet, or direct download.

Total hardware and packaged product sales in the U.S., Europe (comprising Europe, the Middle East and Africa) and Japan totalled an estimated $44 billion in 2008, with hardware sales comprising $17.7 billion and software sales comprising $26.4 billion of the total. U.S. sales represented about 44% of the total, Europe about 43%, and Japan about 13%. Historically, sales outside these jurisdictions have accounted for a very small portion of total worldwide sales, estimated at $4 billion in 2008, split between approximately 60% of software sales and 40% of hardware sales. (Source: Wedbush Industry Report)

The Indian gaming industry was expected to grow at an ambitious growth rate of 45% in 2009 owing to its young population, rising disposable incomes, increasing wireless users and proliferation of developers and publishers. The size of the Indian gaming industry was estimated at around INR 7.9 billion in 2009, compared to INR 6.5 billion in 2008, implying a growth of 22% during the period. However, the industry did not realize its true potential this year.

The gaming industry can be divided into three broad gaming segments – mobile gaming, console gaming and PC and online gaming.

The Industry is expected to reach a size of INR 521 billion in the next 5 years i.e. by 2014 at a CAGR of 15.2 percent.


47

Mobile Game Market – The U.S. market for mobile game downloads is estimated to have tripled to $3 billion in 2008, and is projected to continue to grow in 2009. Game downloads represent no more than two-thirds of the mobile download market (Source: Wedbush Industry Report).

The Indian mobile gaming industry has an estimated size of INR 1.8 billion constitutes little over 5% of the total mobile value added services revenues. As per TRAI reports, the subscriber base of more than 500 million provided the Indian telecom industry the required momentum for growth in 2009. The addressable market continues to increase due to growing number of wireless subscribers and availability of smart phones. Global gaming companies continue to explore Indian markets by distributing their products in India through local companies.

Console Game Market – Worldwide revenue for console games was $ 24.0 billion, with a projected CAGR of 8.7% for 2009 through 2011.

This segment accounts for more than 62% of gaming revenues in India. In 2009 the segment grew to INR 4.9 billion due to new products like Nintendo Wii, and increased awareness of console games through retail chains. The console gaming industry in India is expected to grow at a CAGR of 19% from INR 4.9 billion in 2009 to INR 11.6 billion by 2014 on the back of increasing disposable income and favourable demographics.

PC/Online Game Market – The addressable market for subscription online games and downloads is estimated to b e well over $3 billion, with U.S. and European publishers competing for as much as a 70% share. The subscription market is expected to grow more rapidly, as “new” models (such as Xbox Live subscriptions, PlayStation Network, etc) are established in non-traditional game channels, with the market opportunity likely exceeding $5 billion by the end of the decade. (Source: Wedbush Industry Report)

Both, China and Korea have seen dramatic growth of online games, with an estimated 10 million monthly subscribers to one or more Massively Multiplayer Online Games. Although subscription rates are generally lower in Asia, these subscriptions equal approximately $500 to $700 million in recurring revenue streams. The potential for revenues through micro transactions can potentially double the annual revenue opportunity.

Indian online game industry is estimated to be thriving on account of over 85 million PC literate users in 2009 as compared to 65 million PC users in 2008, which triggers the steady growth the PC gaming market. 2009 saw increased usage of social networks in India and increased user conversion and awareness created by online gaming companies through the distribution of large number of games offered across different genres enabled an increased level of user conversions leading to a 30% growth for this segment in 2009. The industry is expected to grow at a CAGR of 32% between 2009 and 2014 to reach INR 31.9 billion by 2014.

New Media“New Media” largely refers to emerging digital communication technologies that are interactive, networkable and programmable by the end user. Examples of these technologies include value-added mobile communications services through mobile communications, Internet distribution, multimedia and games. The broad array of content that can be distributed through new media technologies has led to associations between the new media sector and numerous content-oriented market sectors, including software and video game design, television, radio, films, marketing and advertising.

Mobile communications have emerged in India as a significant platform for exploiting content through the provision of VAS. For example, the content from popular movies is being exploited through caller ringback tones / ringback tones, wallpapers, imagery, etc. through the VAS platform. Given the declining ARPUs from voice services, mobile-based VAS is expected to become an increasingly important additional revenue source.

In India, Internet advertising, in particular, continues to generate huge interest and, given its small base, is expected to grow the fastest at a CAGR of 29.6% over the next five years.

(Source- Industry Reports)

48

UTV GROWTH STRATEGY

The key elements of our business strategy are as follows:

Integrated Platform of Media Businesses to Drive Growth and Innovation

We have diversified across various entertainment platforms to become one of the largest and most respected integrated media companies in India and we seek to have a presence in all major media

platforms. To this effect, we have created highly scalable business models for each of our existing business verticals. We believe in creating quality content across multiple platforms which caters

to local and regional tastes and sensitivities as well as global audiences.

Comparatively Greater Emphasis on Younger Audiences

In India, the demographics are heavily skewed towards the youth. We recognise this as an important opportunity and have thus targeted younger audiences through our movies and

broadcast channels as well as interactions through various on-ground events, new media platforms, such as web and mobile, and our varied game offerings.

Maintain Intellectual Property Rights Over Content

Producing content ourselves enables us to retain the intellectual property rights of our movies in perpetuity, which can then generate revenue through multiple cycles. Our strategy is

to continue to focus on the production, or co-production, and distribution (or, as appropriate, publishing) of our own movies, games and television content. We believe this approach entails fewer risks than having a distribution-only or publishing-only model due to the wide array of distribution platforms that are available to us when we produce our own content.

1. Television

Produce a Wide Array of Television Content

We aim to explore diverse forms of audio visual entertainment and to produce television programmes across a broad range of genres, including, but not limited to, comedy, drama, thrillers and reality programming. We intend to develop programs that appeal to a wide target audience and that attract new audiences in order to keep up with changing audience preference dynamics.

Focus on Quality in Airtime Sales

In the airtime sales business, we are leveraging our leadership position to concentrate on quality more than quantity by having better performing shows.

Growth through Partnerships and Joint Ventures

In the content production business, besides creating our own programming brands through our team, we aim at growth through tie-ups with creative and executive talent. To this end, we have entered into joint venture partnerships with talent from the industry for the production of television content.

2. Movies

Implement a “Studio Approach” to Movie Production and Distribution

We continue to believe in a “studio approach” to our movie production and distribution business. This involves retaining a strong portfolio of movies under production at all times and is achieved by entering into long-term multiple movie contracts

We believe in creating quality content across multiple platforms which caters to local and regional tastes and sensitivities as well as global audiences.


49

with prominent directors and artists to develop and release movies that appeal to wide audience bases. The studio approach enhances the value of our creative products over time by enabling us to exploit favourable marketing and distribution arrangements and maintain control over the creation and capitalisation of intellectual property rights in relation to the movies that we produce. The key elements of our “studio approach” to movie production include:

a. Maintain Diverse Portfolio of Productions

We believe a key to our success is maintaining a diverse portfolio of movie productions, including movies in Hindi and regional Indian languages for the Indian and international markets. We believe that maintaining a diverse portfolio will allow us to capitalise on the business potential of these segments and diversify our business risks. We are currently one of the leading movie production companies in India, and we aim to grow our market share.

b. Leverage Distribution Capabilities Through Vertical Integration

In order to leverage our movie distribution capabilities, we continue to integrate our marketing and global distribution business with our movie production business. We can fully capitalise on the movies we produce by successfully distributing such movies across a wide array of distribution platforms, including both theatrical releases and non-theatrical products such as home video, direct-to-home television, merchandising and mobile phone content.

3. Games Content

Creating proprietary Games Content

In Games Content, we have begun to move from a B2B to a B2C business model by shifting our focus from pure publishing to core Games Content product development. As a result, we have begun to develop console, mobile and online games through our subsidiaries Ignition, Indiagames and True Games.

Explore Synergies between Multiple Platforms

In Games Content, we have now acquired a presence across mobile, online and console platforms. Our goal is to further establish synergies within our Games Content division so that content developed on one platform can be monetised on different platforms.

4. Broadcasting

Low Cost Specialty Channels

Our broadcasting business aims to provide programming tailored to specific audiences. We target defined audiences to keep broadcasting costs low, increase our profit margins and capitalise on the high demand for special interest content. We research our audience’s viewing habits and preferences in order to develop specialised content that attracts and retains viewers.

5. New Media

Strengthen Synergies with Group Businesses by Providing another Delivery Platform for In-house Content

The New Media vertical operates across segments like entertainment and technology. Our effort is to establish synergies within other UTV verticals to ensure smooth deployment of our online and mobile content. Simultaneously, we continue to look for opportunities to build scale by creating new products for the online and mobile platforms.

We target defined audiences to keep broadcasting costs low, increase our profit margins and capitalise on the high demand for special interest content.

50

Growth Through Innovation

We are making steady progress in this segment, while being cautious of the environmental changes and their impact on business dynamics. We are looking to garner scale with a more organised approach towards content dissemination, technology innovations and content innovations. Content innovations are expected to play an important role in this business and we are working aggressively towards it by building content and distribution partnerships across our other business segments and with other market participants.

THE YEAR IN REVIEW…

Business Overview

Television

TV Content: Our TV Content segment represents the shows produced by us on a commissioned basis. During the year, we continued the success story of reality show Dance India Dance which was No.1 show in Zee TV and the grand finale of DID tracked over 5 TRP and was instrumental in taking Zee TV into No.2 position. We produced another game changer reality show Emotional Atyachar which helped Bindass get ahead of competition and a fun reality show Cash Cab, again for Bindass. We also produced Sonu Sweety, a comedy show for SAB TV. slew of programs in the regional space i.e. Ratha Saptami in Kannada language for Udaya TV, Raktha Sambandham in Telugu language for Gemini TV, Amman & Nagavalli in Tamil language for Sun TV, Game show Deal or No Deal in Tamil, Telugu, Kannada & Malayalam languages for Sun Network, Anamika for ETV Marathi and Prajakta for Mi Marathi.

Air Time Sales: This business has shown steady growth during the fiscal. During the year, we managed a monthly average of approximately 110 hours of content across all leading South Indian Channels such as Sun TV, Gemini TV, Udaya TV and SuryaTV. UTV still retains the leadership slots on SunTV where the Top slot on the channel belongs to the Company, which airs Thirumati Selvam on the top position. Also Deal or No Deal continues at the top position among weekend shows on Sun TV and Surya. On the other channels like GeminiTV and UdayaTV also our shows feature in the Top 5 list.

Dubbing: The Dubbing division was started in 1992 and has evolved into a stable business for UTV. Over time, we have gained reputation of being one of the best dubbing houses. We currently have a talent bank of over 500 voices across genres and languages. During the year, we provided our dubbing services for television content to large international players like Disney, National Geographic Channel, The History Channel and various other channels including Bindass and UTV Action.

Movies

Movies segment comprises all products and services resulting in the big screen exploitation such as movies production and distribution in India and overseas. This fiscal year has been quite successful

for the movies division with some of our movies, winning numerous accolades at various award ceremonies. We have worked hard to develop a scalable yet profitable studio model

and this year we started realizing the benefits.

During the fiscal year we released the following films:

• Agyaat

• Kaminey

• Aage se Right

UTV still retains the leadership slots on SunTV where the Top slot on the channel belongs to the Company, which airs Thirumati Selvam on the top position.

We are looking to garner

scale with a more organised

approach towards content

dissemination, technology

innovations and content

innovations.


51

• Wake Up Sid

• Kurbaan

• Whats your Rashee

• Chance pe Dance

• Harishchandrachi Factory

The following were some of the key highlights of the movies business this fiscal:

• This fiscal we realized additional revenues from The Happening to the tune of ~ USD 16 million.

• As part of the agreement with Walt Disney India whereby UTV exclusively handled sales and distribution initiatives for all Walt Disney Studios Motion Pictures’ movies released in India, this year UTV distributed Bolt, The Proposal, Race to Witch Mountain, Surrogates, G-Force, A Christmas Carol, The Princess and the Frog, Old Dogs, Tinker Bell and the Lost Treasure Up and Alice in Wonderland.

• Wake Up Sid released to rave reviews and an excellent performance at the box office. This was our first release with Dharma Productions and marks the start of a long term relationship.

• We also sealed multiple non-exclusive television syndication deals with Colors, Imagine TV, Channel 4 and B4U, for our slate of movie productions. This was a strong testament to the strength of our slate and the advantage of a studio model with a wide slate of productions across genres and scales.

• UTV swept a whopping 14 awards at the prestigious Filmfare Awards

Games Content

This business segment comprises Games Content Business through our subsidiaries Ignition, Indiagames and True Games Interactive. This year, the Games Content vertical has seen major developments in the three companies:

Ignition: This has been a very exciting year for Ignition which was a relative new comer to the bustling videogame industry but has come to be known as one of the most honored game companies of the year. In this fiscal, Ignition unveiled its 3 IP’s Wardevil, El Shaddai and Reich at the Electronic Entertainment Expo (E3) which is one of the largest game exhibitions in the World. We are also developing two smaller IPs for release to global audiences. The main markets for our IPs are North America, Japan and the European Union (EU). The first presentations to all platform owners and distribution/publishers like Sony, Microsoft etc. evinced very positive response.

During the year, Ignition purchased global publishing rights and released games for two highly talked about games called Muramasa: The Demon Blade developed by Vanillaware and The King of Fighters XII developed by SNK Playmore.

Muramasa: The Demon Blade:

• Platform: Nintendo Wii

The King of Fighters XII

• Platform: PS3 & Xbox 360

In addition, in the fourth quarter, Ignition released two games in the US:

Spectral Force Genesis:

• Platform: Nintendo Wii

Deadly Premonition

• Platform: Xbox 360

52

Ignition continues to aggregate and empower some of the best global talent to create cutting-edge high end Console Games Content for all the Leading Platforms- Sony PS3, Microsoft XBox 360 and

Nintendo Wii.

Indiagames: Indiagames enjoys a majority market share in the mobile gaming segment in India. It is an exclusive distributor of games for many international publishers including Glu Mobile, THQ Wireless, Electronic Arts and Iplay.

At a strategic level there were several interesting developments across the different business lines. First, Indiagames launched its third screen initiative with the launch of Reliance Big TV’s DTH

game service which is exclusively managed by Indiagames. This followed the long term partnership that the company has struck with the global leader in Interactive Television Games, Oberon Media The

Games on Demand business also showed good growth with various bundled plans mainly with BSNL.

The most significant IP acquired in the year came in Q4 with IPL for which Indiagames has acquired multi year rights for mobile and online. Apart from this the company launched games on various movies including Chance Pe

Dance, Rann, Teen Patti and Athihi Tum Kab Jaogey. Indiagames also launched a hit title for Disney India viz., Aladin apart from several other titles during the quarter. In the international market one of the significant launches was Bioshock which went live towards the end of the fourth quarter.

With acquired presence across three separate gaming platforms, the Company is now beginning to reap the benefits of inherent synergies across these varied platforms.

True Games: True Games, a start up company based in US is mainly focused on creation of their own gaming platform in US and Turkey and syndication of its content to online platforms in the rest of the world. Their revenue model is mainly based on micro-transactions and syndication.

During the year, True Games shifted its offices to Austin, Texas from Irvine, California to access better base of technology and personnel. The shift will result in a long term cost saving for the Company. In addition, Mytheon, which is releasing in August completed its closed Beta testing and is currently in final stages of its open Beta testing. True Games tied up with award-winning game developer Petroglyph for developing the Free-to-Play micro-transaction based online game.

North America and Europe are the largest markets for Online Gaming due to its established broadband infrastructure and payment/collection gateways. The full potential of the online gaming market in the US has still not been discovered due to lack of right content offering for Online and we believe that True Games and a few other companies will grow this market exponentially.

Broadcasting

This segment has contributed around 23% to the operating revenues of the Company and continues to build on the strong foundation developed since inception in 2008. We have clearly differentiated ourselves from the slew of channels that have been launched in the recent past by focusing on the specialty segment which we believe will grow at a significant pace in the future, especially driven by pay revenue potential going forward.

Youth (age group 15 to 34 years) is the largest growing segment of the population today. We have made sincere efforts to provide them with differentiated content through our channels Bindass and World Movies. Bindass has already become a number one channel in the youth segment surpassing key competitors such as MTV, Zoom and Channel [V]. Bindass is more than just a TV channel. It has emerged as a youth brand with a 360 degree model with interaction through on-ground events, web and mobile presence as well. In the current fiscal, we launched UTV Action to replace Bindass Movies continuing with our focus on the youth segment with Hollywood action movies dubbed in Hindi. The channel had immediate success from its launch on January 1, 2010 and continues to grow each day.

The most significant IP acquired in the year came in Q4 with IPL for which Indiagames has acquired multi year rights for mobile and online.


53

Bindass, caters to 15-24 yrs SEC A&B audience in towns with population of over 1 million. The channel has beaten its competitors to get into a leadership position in the Youth Entertainment Space. Keeping its promise of unique programming, innovative show concepts and brand led activations were done during the year. Some key success stories of the brand.

• Bindass saw a growth in GRPs to 45 in this year making it the clear No.1 in the Youth Television Genre.

• Dadagiri, The Big Switch, Emotional Atyachaar were some of the unique shows launched in the last year.

• Emotional Atyachaar became the No. 1 show in the youth reality television space across genres & had the highest TVRs ever on Bindass. The website for the show received 3 lakh page views this fiscal; 60 million viewers watched the show on Bindass.

• Bindass adopted a slum in Nehru Nagar Mumbai for 1 year as part of the “Big Switch Connect initiative. The first 2 drives revolved around the concept of ‘Waste Management’ and ‘Using Water Judiciously’. The next 2 drives will be phased out in 2010-11.

• Bindass successfully launched the “What I Am” brand campaign in Jan ‘10

• Bindass penetrated 15 colleges across India through its “Campus Attack” program. This innovative concept helped Bindass to cut through the TG through interesting activation, games etc. On an average we have reached out to 2 lac+ youth through this initiative.

UTV Movies caters to one of the biggest entertainment genres on Indian Television - Hindi movies. While we have access to an enviable slate of movies from the UTV library which includes the biggest blockbusters of the last few years we have also acquired software from multiple companies across India. Despite being the youngest in the genre, the channel continues to enjoy patronage both from audiences and advertisers.

UTV Action launched on Jan 1, 2010 and was an instant success in reaching its target audience from inception. The channel encompasses all facets of Action – Movies, Series, Sports, Gaming, etc. In the first 6 months since the channels launch, the channel has become a destination for action content on Television.

World Movies is the first channel of its kind which brings International cinema to Indian television for the first time. World Movies too has acquired International blockbusters in varied languages like Italian, French, German, Spanish, Polish, Japanese, Korean, Chinese and many more. Today the channel is a brand that covers four major verticals – Television, Theatrical, DVD and Print with a magazine that goes out to audiences interested in World Cinema.

New Media

This segment comprises the Web and Mobile foray of the Company. During this fiscal, this segment has contributed about 2% of the operating revenues of the Company.

• We launched Audio Cinema in May 2009 which is the single innovation to have happened in the Voice space since CRBT in 2004.

• Launched in 8 languages with a catalogue of 500+ movies

• As part of the entertainment business, we’ve acquired the digital rights to a host of celebrities across the various domains of the web and the mobile.

• We have also recently struck up a deal with a major telcos whereby we are creating content for them for an entire year of video content on mobile.

Emotional Atyachaar became the No. 1 show in the youth reality television space across genres & had the highest TVRs ever on Bindass.

54

Financial Overview

Consolidated Results of Operations

Revenues

The Company reported a growth in consolidated operating revenues of Rs. 575 million to Rs. 6,641 million from Rs. 6,066 million reported in the previous year, led by increase in revenues in the Movies and Broadcasting divisions.

Revenues in the Television segment decreased from Rs. 1,317 million in the previous year to Rs. 1,013 million in the current year, a decreases of 23%. This was primarily due to a fall in revenues from the television content production business.

The Movies segment reported an increase in revenues from Rs. 2,762 million in the previous year to Rs. 3,154 million this year, primarily due to the accrual of revenues from the Hollywood films during the year. Our Movies business is continuing to realize the benefits of our IP focus and studio model approach.

Revenues in the New Media segment decreased from Rs. 180 million in the previous year to Rs. 119 million in the current year, a decrease of 34%. This was primarily due to the change in focus of the new media business from being merely content aggregators to concentrating on innovative products.

The Broadcasting segment reported revenues increase from Rs. 887 million to Rs. 1,511 million this year, an increase of 70%. This was primarily due to the consolidation of the Broadcasting segment for the fiscal as opposed to the previous year, where in the segment was consolidated with effect from August 8, 2008. Our consolidated financial results for that period reflect the segment’s performance for only eight months instead of the full period as in the current fiscal.

During the year, the Games Content segment reported a decrease in revenues of 14% from Rs. 1,105 million in the previous year to Rs. 951 million. This decrease was primarily due to the publishing of fewer games in our UK based subsidiary, where the focus this year was more on quality as opposed to quantity.

Other Income

Other income decreased by 76% to Rs. 204 million for the year ended March 31, 2010 from Rs. 854 million for the year ended March 31, 2009. This decrease was primarily due to the absence of any gains from foreign exchange fluctuation as compared to the previous year.

Direct Costs

Direct costs incurred during the current fiscal are Rs. 4,473 million as against Rs. 5,219 million in the previous year, a decrease of 14%. Direct cost as a percentage of operating revenues was at 67% compared to 86% in the previous year.

Staff Costs

The staff cost of the Company has increased by 7% from Rs. 578 million in the previous fiscal to Rs. 618 million during the current fiscal. The increase is in line with prior year staff costs as a percentage of operating revenues.

Other Expenses

Other Expenses comprises administrative overheads, provisions for doubtful debts/ advances, advertisement and business promotion expenses, general expenses and others. During the year, other expenses were at Rs. 1,076 million compared to Rs. 677 million in the previous year showing an increase of 59%. This was mainly due to a net loss on foreign exchange fluctuation related to intercompany advances incurred during the year.


55

Provision for Contingency

In view of the worldwide economic recession and on account of onerous nature of contracts in respect of certain movies/games wherein there was a probable loss on account of additional costs to be incurred by the group under such contracts in the nature of additional print, logistics and marketing costs for movies and price protection for games, the group had made a contingency provision of Rs. 421 million to meet the conditions under the onerous contracts in the previous year. No such contingency provision has been created in the current year.

Interest Cost

During the year, the Company’s borrowings increased by Rs. 4,927 million compared to previous year. The increased borrowings were used to fund the expansion activities of the Company. The said borrowings have been used mainly to expand the business initiatives for movies and gaming vertical. The net interest expense for the year was Rs. 384 million.

Depreciation

The depreciation charge for the current year was Rs. 62 million as compared to Rs. 70 million in the previous year.

Profit before Tax

The Profit before Tax for the year increased from Rs. 32 million in the previous year to Rs. 231 million in the current year. This is primarily due to the scalability of business resulting in lower direct costs.

Provision for Taxation

During the year, the total Provision for tax was Rs. (270) million as against Rs. (433) million during the previous year. The provision for tax during the current year is negative primarily due to deferred tax assets being created on account of carry forward tax losses in some of our businesses.

Profit after Tax and Minority Interest

The Profit after Tax and Minority Interest for the year was higher at Rs. 533 million against Rs. 356 million in the previous year.

Consolidated Financial Position

Sources of Funds

Share Capital, Revenues and Surplus

The Equity Share Capital of the company increased from Rs. 342 million to Rs. 406 million due to issue of company’s shares to minority shareholders as part of the scheme of arrangement for merger of UMP Plc and UTV Motion Pictures (Mauritius) Limited during the year. The consolidated Reserves and Surplus decreased from Rs. 13,140 million to Rs. 7,317 million, a decrease of Rs. 5,823 million. The decrease in consolidated reserves is attributable to the write off of certain assets/expenses under the various court schemes undertaken during the fiscal (for detailed description, refer Note 5 to Sch 21 to the Consolidated Financials.

Loan Funds

The Company’s borrowings increased by Rs. 4,927 million, up from Rs. 4,700 million in the previous year to 9,627 million in the current year. These increased borrowings have been used to fuel the growth of the Company.

56

Utilisation of Funds

Fixed Assets

Gross Fixed Assets as on 31 March, 2010 were at Rs. 924 (excluding Goodwill on consolidation) million as against Rs. 913 million on 31 March,

2009.

Goodwill on Consolidation

Goodwill arising on Consolidation from Rs. 3,682 million in the previous year to Rs. 3,952 million in the current year is primarily on account of 10% additional stake

acquired by the Company in UTV Global Broadcasting Limited during the year. This has been set off partially by impact of movement in exchange rate for goodwill on consolidation

derived from overseas subsidiaries.

Investments

The company had investments of Rs. 284 million at the start of the year. Investments as on 31 March, 2010 were Rs. 201 million showing a decrease of Rs. 83 million. This

is reflective of funds parked in short term instruments at year end.

Current Assets, Loans and Advances

Total current assets, loans and advances decreased by Rs. 3,128 million during the year, down from Rs. 17,120 million in the previous year to

Rs. 13,992 million. Debtors (net of provisions) as on March 31, 2010 were at Rs. 1,403 million representing 77 days of sale as against Rs. 1,960 million as on

March 31, 2009 representing 118 days of sale. During the year, inventories declined to Rs. 8,538 million from Rs. 10,591 million in the previous year. This was primarily

due to a write-down of movie copyrights in this fiscal as per the scheme of arrangement. Loans and advances have decreased by Rs. 293 million during the year due a decrease in

advance to suppliers and other advances set off by increase in share application money in the business news venture. Cash and Bank balances have decreased marginally from 937 million as

on 31 March, 2009 to Rs. 711 million as on March 31, 2010.

Current Liabilities and Provisions

Current Liabilities and Provisions have shown a decrease of Rs. 470 million. This is primarily due to a decrease in Creditors and utilisation of Provision for Contingency made during the last year.

Overall, net current assets have decreased by 2,658 million over the previous year primarily due to decrease in inventories as compared to the previous year.

Net Deferred Tax Asset/Liability

Net deferred tax assets at the year end was at 1,016 million compared to Rs. 794 million in the previous year. The higher deferred tax provision has accrued primarily due to the deferred tax assets being created on account carry forward losses in movies and Ignition.

The Movies segment reported an increase in revenues of 14% from Rs. 2,762 million in the previous year to Rs. 3,154 million this year.


57

Segmental PerformanceThe business of the Company, during the year, was broadly categorized into the following five segments:

Television

Revenues from the television segment decreased by 23% from Rs. 1,317 million in the previous year to Rs. 1,013 million during the year primarily due a fall in revenues from the television content production business during the current fiscal. The segment reported a profit of Rs. 34 million as compared to Rs. 54 million in the previous year.

Movies

The Movies segment reported an increase in revenues of 14% from Rs. 2,762 million in the previous year to Rs. 3,154 million this year, primarily due to the accrual of revenues from the Hollywood films during the year. The Movies business reported a profit of Rs. 951 million [margins of 30%] during the year against a profit of Rs. 538 million [margins of 19%] during the previous year.

Games Content

During the year, the results of the Games Content segment included consolidated financials of Ignition, True Games a n d Indiagames for the full year. During the year, the Games Content segment reported a decrease in revenues of 14% from Rs. 1,105 million in the previous year to Rs. 951 million. The loss from the Games Content segment reduced from Rs. 289 million during the previous year to a loss of Rs. 74 million during the current fiscal.

Broadcasting

Revenues from Broadcasting segment were Rs. 1,511 million for the current year as compared to Rs. 887 million in the previous year. The Broadcasting segment incurred a loss of Rs. 36 million in the current year as compared to a loss of Rs. 282 million for the previous year.

New Media

Revenues from New Media segment were Rs. 119 million for the current year as compared to Rs. 180 million in the previous year.

Revenue contribution as on 31 March, 2010

Note: Intersegment revenue contribution is not considered in the pie charts above

58

RISK FACTORS

1. UTV operates in a highly competitive industry and UTV expects that competition will continue to increase with the entry of new players into the sectors in which it operates.

2. UTV competes with other entertainment media companies to develop arrangements with popular producers, actors, writers and other artistic talent for the production of high quality television content and movies. UTV’s inability to obtain such talent to produce high quality programming on reasonable terms, or at all, could have a material adverse effect on its business, financial condition and results of operations.

3. UTV may be unsuccessful in protecting its intellectual property rights. Unauthorised use of UTV’s intellectual property may result in development of technology, products or services which compete

with UTV’s products. UTV may also be subject to third-party claims of intellectual property infringement.

4. The motion pictures sector in India is largely fragmented and UTV’s movies business faces significant competition from various national and regional competitors offering similar services.

5. UTV is facing increased competition in its television business, driven by factors such as an increase in the number of TV

channels and continuous fragmentation of TV viewership

6. This is the first time UTV has ventured into the highly competitive Games Content space and it faces significant competition in all three

platforms from various multinationals.

7. The seasonality of advertising and the schedule of UTV’s movie releases could cause its results of operations to vary between financial periods.

8. UTV has substantial indebtedness and the conditions and restrictions imposed by UTV’s financing and other agreements could adversely affect UTV’s

ability to conduct its business, its financial condition and its operations.

9. UTV requires certain approvals or licenses to conduct its business, and the failure to obtain such approvals or licenses in a timely manner or at all may adversely affect

UTV’s business and operations.


59

HR

As a Company, we appreciate the breadth and depth of our team. We believe in constantly nurturing the creative processes followed in their respective businesses and take full advantage of the emerging opportunities in their sphere. We are in full cognizance of the fact that it is due to the passion, commitment, talent and experience of our people that we are able to rise to the challenge of exceeding the ever increasing demands of our consumers.

We have been able to attract and retain the best talent from around the industry for our existing and new business initiatives and for taking us to the next level of growth.

As at March 31, 2010, we, along with our subsidiaries, had 983 full time employees, long-term professional associates and animation talent, the business wise classification of which is as under:

Motion Pictures 50

Television 41

Gaming 518

Broadcasting 200

New media 76

Corporate 98

TOTAL 983

KEY CORPORATE DEVELOPMENTS - 2009-2010

UTV announced a successful completion of merger of its AIM listed subsidiary UMP Plc along with its Mauritius subsidiary. As a result of this scheme of arrangement –

1. UTV issued 6,436,782 shares of Rs. 10 each to the erstwhile UMP shareholders which was the final step towards completion

2. Total Paid up share capital of UTV increased to 40.6 million shares

3. UTV non promoter float increased to 30% from 17% earlier

4. UMP Plc ceased to trade in AIM of London Stock exchange with effect from January 25, 2010

5. Listing of newly issued shares of UTV on Indian Stock exchanges commenced on February 08, 2010

60

62

Auditors’ Report On the Consolidated Financial Statements of UTV Software Communications Limited To the Board of Directors of UTV Software Communications Limited

1. We have audited the attached consolidated balance sheet of UTV Software Communications Limited (the “Company”) and its subsidiaries and its jointly controlled entity; hereinafter referred to as the “Group” (refer Note A(i) on Schedule 21 to the attached consolidated financial statements) as at March 31, 2010, the related consolidated Profit and Loss Account and the consolidated Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express 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 Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of twelve subsidiaries and one jointly controlled entity included in the consolidated financial statements, which constitute total assets of Rs. 9,307.47 million and net assets of Rs. 6,047.08 million as at March 31, 2010, total revenue of Rs. 1,650.35 million, net loss of Rs. 11.03 million and net cash flows amounting to Rs. 120.08 million for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion on the consolidated financial statements to the extent they have been derived from such financial statements is based solely on the report of such other auditors.

4. We report that the consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements and Accounting Standard (AS) 27 - Financial Reporting of Interests in Joint Ventures notified under sub-section 3C of Section 211of the Companies Act, 1956.

5. Without qualifying our report, we draw attention to Note C 5 of Schedule 21 of the consolidated financial statements stating that pursuant to the Scheme of Arrangement sanctioned by the Hon’ble High Court of Judicature at Bombay, the Group has transferred an amount of Rs. 7,500 million from Securities Premium Account to Business Restructuring Reserve Account. In accordance with the Scheme of Arrangement, the Board of Directors have approved the utilization of Rs. 6,397.47 million during the year out of Business Restructuring Reserve Account to write down certain assets (fixed assets, inventories, receivables and advances), shares to be issued to the minority shareholders of the amalgamating company in consideration of the amalgamation and the expenses of amalgamation, and the balance has been transferred to General Reserve. Had the Scheme of Arrangement not prescribed the treatment mentioned above, an amount of Rs. 6,107.98 million would have been debited to Profit and Loss Account for the year and profit for the year would have been lower by an equivalent amount, Securities Premium Account would have been higher by Rs. 7,500 million, and General Reserve would have been lower by Rs. 1,102.53 million.

6. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components of the Group as referred to above, and to the best of our information and according to the explanations given to us, in our opinion, the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

63

FINANCIAL SECTION

Auditors’ Report On the Consolidated Financial Statements of UTV Software Communications Limited To the Board of Directors of UTV Software Communications Limited (Contd.)

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2010;

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

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

For Price Waterhouse & Co Firm Registration Number: 007567S Chartered Accountants

Partha GhoshPlace: Mumbai PartnerDate: June 24, 2010 Membership Number F-55913

64

as at March 31, 2010

Consolidated Balance Sheet

(Rs. in Million)

Schedule No.

As at March 31, 2010


SOURCES OF FUNDSShareholders’ Funds Share Capital ................................................................... 1 406.32 341.95 Advance Against Warrants ..................................... 2 – 390.11 Reserves and Surplus ................................................ 3 7,316.64 7,722.96 13,140.45 13,872.51 Minority Interests 326.21 1,421.21 Loan Funds Secured Loans ............................................................... 4 5,540.38 2,884.19 Unsecured Loans ......................................................... 5 4,086.16 1,815.78 Deferred Tax Liabilities 268.10 6.54 [Refer Note C 6 (a) of Sch.21]TOTAL ........................................................................................... 17,943.81 20,000.23 APPLICATION OF FUNDSFixed Assets ............................................................................. 6 Gross Block ..................................................................... 4,875.73 4,595.86 Less : Accumulated Depreciation ...................... 290.89 211.62 Net Block .......................................................................... 4,584.84 4,384.24 Capital Work-In-Progress ......................................... 8.56 4,593.40 8.08 4,392.32 Investments .............................................................................. 7 200.65 284.15 Deferred Tax Assets ............................................................ 1,284.05 800.47 [Refer Note C 6 (a) of Sch.21]Current Assets, Loans and Advances Inventories ....................................................................... 8 8,538.08 10,591.30 Sundry Debtors ............................................................. 9 1,403.45 1,960.44 Cash and Bank Balances ......................................... 10 710.76 936.74 Other Current Assets ................................................. 11 2.94 2.04 Loans and Advances .................................................. 12 3,336.49 3,629.20

13,991.72 17,119.72 Less: Current Liabilities and Provisions Current Liabilities ......................................................... 13 2,004.57 2,119.51 Provisions ......................................................................... 14 121.44 476.92

2,126.01 2,596.43 Net Current Assets............................................................... 11,865.71 14,523.29 TOTAL ........................................................................................... 17,943.81 20,000.23

NOTES TO THE FINANCIAL STATEMENTS ......... 21

This is the Consolidated Balance Sheet referred to in our report of even date.

For Price Waterhouse & Co. Rajeev Wagle Rohinton ScrewvalaFirm Registration Number: 007567S Group Chief Financial Officer CMD & Chief Executive OfficerChartered Accountants

Partha Ghosh Mohd. Sajid Ali Sanjaya KulkarniPartner Company Secretary DirectorMembership Number: F-55913

Place : Mumbai Place : MumbaiDate : June 24, 2010 Date : June 24, 2010

Schedules referred to above and notes attached thereto form an integral part of the Consolidated Balance Sheet.

65

FINANCIAL SECTION

for the year ended March 31, 2010

Consolidated Profit and Loss Account

This is the Consolidated Profit and Loss Account referred to in our report of even date.




Schedules referred to above and notes attached thereto form an integral part of the Consolidated Profit and Loss Account

(Rs. in Million)Schedule

No.Year Ended

March 31, 2010Year Ended

March 31, 2009INCOME Sales and Services (net) .......................................................................... 15 6,640.53 6,065.54 Other Income ................................................................................................ 16 204.27 853.74

6,844.80 6,919.28 EXPENDITURE Direct Cost ...................................................................................................... 17 4,473.03 5,218.99 Staff Cost ......................................................................................................... 18 618.01 577.52 Other Expenses ........................................................................................... 19 1,076.16 677.01 Provision for Contingencies ................................................................. [Refer Note C 15 (a) & (b) of Sch.21)

– 421.00

6,167.20 6,894.52 PROFIT BEFORE INTEREST, DEPRECIATION AND TAX ............. 677.60 24.76 Less: Interest & Finance Charges (net) ...................................................... 20 384.46 (76.61)PROFIT BEFORE DEPRECIATION AND TAX ...................................... 293.14 101.37 Less: Depreciation ............................................................................................... 61.66 69.53 PROFIT BEFORE TAX & BEFORE EXCEPTIONAL ITEM ............... 231.48 31.84 Exceptional Item Writeoffs in accordance with Scheme [Refer Note C 5 of Sch.21] .....................................................................

(6,077.21)

Transfer from Business Restructuring Reserve account ...... 6,077.21 – – PROFIT BEFORE TAX ......................................................................................... 231.48 31.84 Less : Provision for Taxation – Current ..................................................................................................... 123.33 65.60 (Includes Wealth Tax Rs. 2.48 Million, Previous Year Rs. 2.43 Million) (included reversal pertaining to previous year) – Mat Credit (Entitlement)/Utilisation .......................................... (130.22) 23.54 – Fringe Benefit Tax ............................................................................. – 8.63 – Deferred Tax ......................................................................................... (263.36) (270.25) (531.17) (433.40)PROFIT BEFORE MINORITY INTERESTS .............................................. 501.73 465.24 Less : Minority Interests .................................................................................... (31.59) 108.96 PROFIT AFTER MINORITY INTERESTS .................................................. 533.32 356.28 Balance Profit brought forward .................................................................... 1,773.11 1,416.83

2,306.43 1,773.11 APPROPRIATIONSa) Transfer to Debenture Redemption Reserve ............................. (Refer Note 16 of Sch.21)

200.00 –

b) Balance Carried To Balance Sheet .................................................... 2,106.43 1,773.11 2,306.43 1,773.11

Earnings Per Share of Rs.10/- each [Refer Note C 9 of Sch.21)Basic .......................................................................................................................... 13.13 10.73 Diluted ......................................................................................................................... 13.07 10.73 NOTES TO THE FINANCIAL STATEMENTS ........................................ 21

66


Consolidated Cash Flow Statement

(Rs. in Million)

Particulars March 31, 2010 March 31, 2009

A. CASH FLOW FROM OPERATING ACTIVITIES:Net Profit Before Tax ................................................................................................................ 231.48 31.84

Adjustments for: Depreciation ......................................................................................................................... 61.66 69.53 Profit on Sale of Fixed Assets/Investment (Net) .............................................. (13.70) (63.51) Interest Expenses ............................................................................................................. 401.58 77.04 Assets Written off............................................................................................................. 13.01 – Provision No Longer Required Written Back ..................................................... – (20.00) Interest Income .................................................................................................................. (17.12) (153.65) Bad Debts Written off .................................................................................................... 31.78 5.79 Amortisation of Movie Copyrights .......................................................................... 5.88 238.96 Provision for Doubtful Debts ...................................................................................... 18.51 21.66 Irrecoverable loans and advances written off/Provision

for doubtful advances..................................................................................................... 19.93 10.81 Provision For Contingencies ....................................................................................... (371.00) 421.00 Advance from Customer Written Back ................................................................. (50.26) (58.05) Unrealised Foreign Exchange (Gain)/Loss .......................................................... 455.95 (465.78) Provision for Employee Retirement Benefits .................................................... 13.04 47.28 Dividend Income ............................................................................................................... (0.43) (2.67) Advance tax/TDS of earlier year written off ....................................................... 1.86 5.38 Operating Profit Before Working Capital Changes ................................................. 802.17 165.63

Adjustments for changes in Working Capital – (Increase)/Decrease in Sundry Debtors ........................................................... 427.13 (314.95) – (Increase)/Decrease in Other Receivables ..................................................... (615.49) 747.53 – Increase in Inventories .............................................................................................. (4,223.47) (6,522.98) – Increase/(Decrease) in Trade and Other Payables ..................................... (299.50) (1,450.48)

Cash Used in Operations ........................................................................................................ (3,909.16) (7,375.25)

– Taxes Paid (including Tax Deducted at Source) .......................................... (253.77) (558.94)

Net Cash Used in Operating Activities (A) ...................................................... (4,162.93) (7,934.19)

B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets ............................................................................................. (396.28) (338.73) Proceeds from Sale of Fixed Assets ...................................................................... 16.25 6.75 Proceeds from Sale of Investments ....................................................................... 10,301.31 21,951.46 Purchase of Investments ............................................................................................. (10,189.78) (22,141.74) Share Application Money To Related Company ............................................ – (1,005.30) Advances to Related Companies ............................................................................. 382.69 1,165.91 Interest Received .............................................................................................................. 16.22 42.95 Investment Made in Subsidiary Companies ...................................................... – (2,573.77) Dividend Received ............................................................................................................ 0.43 2.67 Net Cash Generated In Investing Activities (B) ..................................... 130.84 (2,889.80)

67

FINANCIAL SECTION

for the year ended March 31, 2010 (Contd.)

Consolidated Cash Flow Statement

(Rs. in Million)


C. CASH FLOW FROM FINANCING ACTIVITIES: Issue of Equity Shares.................................................................................................... – 8,050.53 Share Issue Expenses .................................................................................................... (62.37) (160.02) Advance warrant money received including Premium ................................ (0.69) 390.11 Foreign Currency Translation Reserve .................................................................. (340.93) 660.32 Proceeds from Long-term Borrowings – Receipts ............................................................................................................................. 2,795.60 833.04 – Payments .......................................................................................................................... (861.53) (1,176.51) Proceeds from Short-term Borrowings – Receipts ............................................................................................................................. 2,270.39 1,597.74 – Payment ............................................................................................................................. (188.95) (15.50) Proceeds from Cash Credit (Net) ............................................................................. 911.07 763.75 Interest paid - Capitalised ............................................................................................. (372.78) (235.59) Interest Paid/Discount on Commercial Paper ................................................... (398.37) (83.08) Dividend Paid ...................................................................................................................... (0.01) (34.17) Distribution Tax Paid ....................................................................................................... – (5.81) Minority Interests .............................................................................................................. 54.68 244.93 Net Cash Generated from Financing Activities (C) ...................................... 3,806.11 10,829.74

D. NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (225.98) 5.75

Opening Cash and Cash Equivalents .................................................................. 936.74 714.15 Cash and Cash Equivalents received pursuant to Purchase of Subsidiary – 216.84

936.74 930.99 Closing Cash and Cash Equivalents...................................................................... 710.76 936.74 Cash and cash equivalents comprise ..................................................................

Cash, Cheques & Drafts (in hand) and Remittances in Transit ........... 34.18 9.38 Balance with Scheduled Banks ............................................................................ 676.58 927.36

710.76 936.74 Notes:1. The above Cash Flow Statement has been prepared under the Indirect Method set out in Accounting Standard-3 issued by the Institute

of Chartered Accountants of India.2. Figures in brackets indicate cash outgo.3. Cash and cash equivalents includes Rs. 0.08 Million (Previous Year: Rs. 0.09 Million) (Refer Sch.13) which are not available for use by the

Company.4. Previous years figures have been regrouped wherever necessary.

This is the Consolidated Cash Flow statement referred to in our report of even date.For and on behalf of the Board of Directors




68

forming part of the Consolidated Financial Statements

Schedules

(Rs. in Million)As at March 31, 2010 As at March 31, 2009

1. SHARE CAPITAL

AUTHORISED

70,000,000 Equity Shares of Rs. 10/- each .......................................................... 700.00 450.00(Previous Year: 45,000,000 Equity Shares of Rs. 10/- each) [Refer Note C 4 (i) of Sch.21]

ISSUED, SUBSCRIBED AND PAID UP

4,06,32,250 Equity Shares of Rs. 10/- each fully paid ................................... 406.32 341.95(Previous Year: 34,195,468 Equity Shares of Rs. 10/- each fully paid)

[Refer Note C 4 (ii) of Sch.21]

TOTAL .................................................................................................................................... 406.32 341.95

Notes:

i) 6,705,882 Equity Shares of Rs. 10/- each were issued without consideration in cash as Bonus Shares by capitalization of Share Premium in the F.Y. 1995-96 to the then existing Shareholders of the Company.

ii) 4,664,824 Equity Shares of Rs. 5/- each (2,332,412 Equity Shares of Rs. 10/- each) were issued without consideration in cash to various shareholders under a share swap arrangement in the F.Y. 2000-01 as part of consolidation exercise carried out in the said year.

iii) 182,932 Equity Shares of Rs. 5/- each (91,466 Equity Shares of Rs. 10/- each) were issued to shareholders of Western Outdoor Media Technologies Limited as per the Scheme of Arrangement for demerger of its studio division to the Company in F.Y. 2003-04.

iv) During the year, the Company has issued 6,436,782 equity shares of Rs. 10 each, for consideration other than cash, to the minority shareholders of UMP Plc pursuant to the Scheme of Arrangement between the Company and its subsidiaries (Refer Note C 5 of Sch.21).

v) Out of the above issued share capital, the Holding Company - The Walt Disney Company (Southeast Asia) Pte Limited holds 20,497,994 shares as on the Balance Sheet date representing 50.45% of the issued share capital.

2. ADVANCE AGAINST WARRANTS

As per Last Balance Sheet............................................................................................ 390.11 –

Advance warrant money received including Premium ..................................................................................................................................

– 390.11

Less: Transfer to Capital Reserve Account (Refer Note C 1 of Sch.21) ..............................................................................................

(390.11) –

TOTAL .................................................................................................................................... – 390.11

69

FINANCIAL SECTION

forming part of the Consolidated Financial Statements (Contd.)

Schedules

(Rs. in Million)

As at March 31, 2010 As at March 31, 2009

3. RESERVES AND SURPLUS SECURITIES PREMIUM ACCOUNTAs per last Balance Sheet ................................................................................. 8,805.63 1,008.64 Add: Premium on shares issued on a preferential basis ................ – 7,957.01

8,805.63 8,965.65 Less: Transferred to Business Restructuring Reserve ..................... 7,500.00 –Less: Utilised for write off at Indiagames Limited ............................

[Refer Note C 5 (iii) to Sch.21] 30.77 –

Less: Shares/Debentures Issue Expenses .............................................. 31.60 160.02 1,243.26 8,805.63

CAPITAL RESERVEReserve arising on account of change in shareholding of subsidiaries ............................................................................................................... 2,451.47 2,451.47 Less: Reduction due to Merger of UTV Motion Pictures

(Mauritius) Limited & UMP Plc .......................................................... (2,429.23) – Arising on account of shares isssued by erstwhile UMP Plc ....... 2,602.97 – Less: Transferred to General Reserve as per Scheme ................... (2,602.97) – Arising from forfeiture of share warrants money received (Refer Note C 1 of Sch.21) ................................................................................ 390.11 –

412.35 2,451.47 GENERAL RESERVE As per last Balance Sheet ................................................................................. 47.50 47.50 Add: Transferred from Captial Reserve as per Scheme ................. 2,602.97 – Add: Transferred from Business Restructuring Reserve

as per Scheme ........................................................................................... 1,102.53 –

3,753.00 47.50 DEBENTURE REDEMPTION RESERVE 200.00

BUSINESS RESTURCTURING RESERVE ..............................................

Transferred from Securities Premium pursuant to Scheme of Arrangement ................................................................................... 7,500.00 – Less: Transferred to Profit and Loss account ......................................[Refer Note C 5 (i) & (ii) of Sch.21]

6,077.21 –

Less: Utilisation for issue of shares & scheme expenses in accordance with Scheme [Refer Note C 5 (i) & (ii) of Sch.21] ....... 320.26 – Less: Transferred to General Reserve as per Scheme ..................... 1,102.53 –

– – FOREIGN CURRENCY TRANSLATION RESERVE ............................ (521.00) 62.74 PROFIT & LOSS ACCOUNTAs per annexed Profit and Loss Account ................................................. 2,106.43 1,773.11 On account of merger of IT Nation Media Limited with UTV New.... Media Limited w.e.f. from April 1, 2008

(82.62) –

Addition on account of merger of UTV Motion Pictures ................(Mauritius) Limited & UMP Plc into the Company ...............................

205.22 –

TOTAL ........................................................................................................................ 7,316.64 13,140.45

70

(Rs. in Million)

Notes As at March 31, 2010 As at March 31, 2009

4. SECURED LOANS

Cash Credit From Banks ................................................... 1 2,487.96 1,576.89

Working Capital Demand Loans from Banks .................... 1 195.00 382.50

Term Loan From Banks .................................................... 1 1,836.78 890.44

Vehicle Loan From Banks ................................................. 3 0.69 2.14

Non-convertible Debentures ............................................. 2 1,000.00 –

Others ............................................................................... 3 19.95 32.22

TOTAL ............................................................................... 5,540.38 2,884.19

Notes: 1. Cash Credit, Working Capital Demand Loans and Term Loans from banks are secured by: a) First charge on freehold land, movable plant and machinery and other movable fixed assets (excluding ve-

hicles) and current assets of the Company (save and except fixed assets and current assets of the Company charged in favour of EXIM Bank of India for specific film financing to the extent of Rs. 450 Million);

b) Personal guarantee of a director of the Company; c) Pledge of 350,000 equity shares held in UTV Global Broadcasting Limited, its subsidiary & lien of fixed deposit of

Rs. 250 Million; d) First charge on all fixed assets and current assets of subsidiaries – IG Interactive Entertainment Limited and

UTV Communications (USA) LLC; e) First charge on all fixed assets and current assets of Ignition Entertainment Limited & its subsidiaries except

fixed assets and current assets charged by them in favour of other lenders; f) Corporate Guarantee given by UTV Communications (USA) LLC & IG Interactive Entertainment Limited. 2. Non-convertible Debentures are secured by charge against freehold land, entire current assets (save and except current

assets of the Company charged in favour of EXIM Bank of India for specific film financing to the extent of Rs. 450 Million), personal guarantee of a director of the Company and corporate guarantees given by UTV Communications (USA) LLC & IG Interactive Entertainment Limited. The Debentures will be redeemable in 16 equal quarterly instalments starting after one year moratorium from the date of issue.

3. Secured against the hypothecation of underlying fixed assets. 4. Of the above, amount repayable within one year are as follows: – Working Capital Demand Loans: Rs. 195.00 Million. – Term Loans: Rs. 20.56 Million. – Non Convertible Debentures Rs. 125.00 Million.

5. UNSECURED LOANSCommercial Paper

– From Banks .............................................................................. 2,500.00 650.00

– From Others ............................................................................ 1,500.00 1,000.00

Other Short Term Loans 86.16 165.78

TOTAL ........................................................................................ 4,086.16 1,815.78

Notes :In respect of Commercial Paper:1. Amount repayable within one year: Rs. 4,000 Million.2. Maximum amount outstanding during the year: Rs. 4,000 Million.


Schedules

71

FINANCIAL SECTION

6.

FIX

ED

AS

SE

TS

(R

efer

No

te B

2, B

11,

B 1

2 o

f S

ch.2

1)

(Rs.

in M

illio

n)

CO

ST

DE

PR

EC

IAT

ION

/AM

OR

TIS

AT

ION

NE

T B

LOC

K

Parti

cula

rsO

peni

ngAs

at

April

1,

2009

Cons

olid

atio

nAd

just

men

tsAd

ditio

nsD

educ

tions

Refe

r Not

e (d

) be

low

As a

tM

arch

31,

20

10

Ope

ning

As a

tAp

ril 1

, 20

09

Cons

olid

atio

nAd

just

men

tsFo

r the

Year

Ded

uctio

nRe

fer N

ote

(d) b

elow

As a

tM

arch

31,

20

10

As a

tM

arch

31,

20

10

As a

tM

arch

31,

20

09

(A)

(B)

(A-B

)In

tang

ible

Ass

ets

Com

pute

r Sof

twar

e 3

7.97

(0

.70)

17.

28

3.3

9 5

1.16

1

2.15

(0

.20)

7.8

0 2

.22

17.

53

33.

63

25.

82

Gam

e D

evel

opm

ent C

ost

27.

76

–

7.2

3 2

8.29

6

.70

6.9

1 –

4

.64

9.6

9 1

.86

4.8

4 2

0.85

G

oodw

ill o

n C

onso

lidat

ion

3,6

82.4

0 (5

9.96

) 6

01.9

5 2

72.7

2 3

,951

.67

–

–

1.9

9 –

1

.99

3,9

49.6

8 3

,682

.40

Bra

nds

44.

09

–

–

–

44.

09

4.1

3 –

4

.41

–

8.5

4 3

5.55

3

9.96

Tang

ible

Ass

ets

Leas

ehol

d Im

prov

emen

ts

95.

13

(1.2

1) 1

0.07

4

.35

99.

64

19.

23

(1.2

7) 1

8.23

2

.82

33.

37

66.

27

75.

90

Free

hold

Lan

d –

–

1

.13

–

1.1

3 –

–

–

–

–

1

.13

–

Bui

ldin

g (R

efer

Not

e b

belo

w)

295

.39

–

–

–

295

.39

4.3

5 –

4

.81

–

9.1

6 2

86.2

3 2

91.0

4 Pl

ant &

Mac

hine

ry

85.

31

–

0.3

3 1

8.17

6

7.47

5

2.59

–

3

.62

9.3

7 4

6.84

2

0.63

3

2.72

Fu

rnitu

re &

Fix

ture

s 2

02.3

6 (6

.94)

18.

60

10.

10

203

.92

63.

57

(6.5

5) 5

4.15

1

.89

109

.28

94.

64

138

.79

Com

pute

rs

74.

43

(3.5

5) 1

6.06

8

.19

78.

75

32.

26

(1.5

0) 1

3.33

5

.04

39.

05

39.

70

42.

17

Off

ice

Equi

pmen

ts

34.

41

(0.7

8) 2

9.34

1

.71

61.

26

9.8

0 (0

.92)

7.9

0 0

.45

16.

33

44.

93

24.

61

Mot

or V

ehic

les

(Ref

er N

ote

a be

low

) 1

6.61

(0

.08)

–

1.9

8 1

4.55

6

.63

(0.0

8) 1

.51

1.1

2 6

.94

7.6

1 9

.98

GR

AN

D T

OTA

L 4

,595

.86

(73.

22)

702

.00

348

.90

4,8

75.7

3 2

11.6

2 (1

0.52

) 1

22.3

9 3

2.60

2

90.8

9 4

,584

.84

4,3

84.2

4

Cap

ital W

ork

in P

rogr

ess,

at c

ost (

incl

udin

g C

apita

l Adv

ance

s) 8

.56

8.0

8

TOTA

L 4

,593

.40

4,3

92.3

2

Prev

ious

Yea

r 1

,192

.91

(63.

35)

3,5

64.7

4 9

8.44

4

,595

.86

129

.40

(3.6

9) 1

00.2

5 1

4.34

2

11.6

2 4

,384

.24

1,0

63.5

1

Not

es:

a)

The

Net

Boo

k va

lue

of M

otor

Veh

icle

s in

clud

es v

alue

of v

ehic

les

acqu

ired

unde

r loa

n fr

om b

anks

am

ount

ing

to R

s. 0

.69

Mill

ion

[Pre

viou

s Ye

ar: R

s. 0

.97

Mill

ion]

.b)

B

uild

ing

is h

ypot

heca

ted

to S

tand

ard

Cha

rter

ed B

ank

for t

he te

rm lo

an ta

ken

for t

he a

cqui

sitio

n of

the

said

bui

ldin

g.c)

G

ame

Dev

elop

men

t Cos

ts in

clud

es g

ame

cost

ing

Rs.

3.6

1 M

illio

n (P

revi

ous

Year

: Rs.

16.

32 M

illio

n) w

hich

are

und

er d

evel

opm

ent p

hase

.d)

R

s. 7

.30

Mill

ion

has

been

writ

ten

off (

net o

ff a

ccum

ulat

ed d

epre

ciat

ion)

as

per t

he s

chem

e of

arr

ange

men

t (R

efer

not

e C

5 (b

)(i) o

f Sch

.21)

.e)

D

epre

ciat

ion

inve

ntor

ised

on

gam

ing

proj

ects

dur

ing

the

year

agg

rega

tes

to R

s. 6

0.73

Mill

ion

(Pre

viou

s Ye

ar: R

s. 3

0.72

Mill

ion)

.f)

Goo

dwill

aris

ing

on C

onso

lidat

ion

is te

sted

for i

mpa

irmen

t at e

ach

year

end

.


Schedules

72

(Rs. in Million)Nos. as atMarch 31,

2010

Nos. as atMarch 31,

2009

Face Value As atMarch 31,

2010

As atMarch 31,

2009

7. INVESTMENTS (Refer Note B 3 of Sch.21)

Long-term, Non-trade (fully paid) Equity Shares of Companies Unquoted: United Teleshopping and Marketing

Company Limited .....................................600,000 600,000 Rs. 10 – –

Homland Network Corporation ................ 352,000 352,000 0.001 USD –* –*

Preference Shares of Companies Unquoted: Homland Network Corporation ................ 125,000 125,000 0.001 USD 0.01 0.01

Long-term, Trade (fully paid) Equity Shares of Companies Quoted: Radaan Mediaworks India Limited ........... 62,500 62,500 Rs. 2 0.50 0.50

Current Investment, Non-trade (fully paid) a) Equity Shares of Companies Subsidiary Companies (Unquoted) Indiagames Limited .................................. 19,429 19,429 Rs. 10 0.14 0.14

b) Mutual/Liquid Funds (Unquoted) i) Principal Cash Mgmt Fund Liquid Option .....................................

– 13,828,943 Rs. 10 – 190.00

ii) LIC MF Liquid Plus Fund-growth ........ – 7,962,122 Rs. 10 – 93.50 iii) SBI Mutual Fund Magnum Instacash

Fund .................................................... 3,915,082 – Rs. 10 80.00 –

iv) Taurus Liquid Fund - Super Institu-tional – Growth .................................... 119,834 – Rs. 1,000 120.00 –

TOTAL .................................................................... 200.65 284.15

* Amount less than Rs. 10,000.

(Rs. in Million)Cost Market value Cost Market value

March 31, 2010

March 31, 2010

March 31, 2009

March 31, 2009

Aggregate Value of Quoted Investments ............... 0.50 0.19 0.50 0.18 Aggregate Value of Unquoted Investments ........... 200.15 – 283.65 –

TOTAL .... ................................................................ 200.65 284.15


Schedules

73

FINANCIAL SECTION

7. INVESTMENTS (Contd.)

Name of the Fund

March-10Purchase

of UnitsNo. of units

March-10Redemption

of UnitsNo. of units

March-09Purchase of

UnitsNo. of units

March-09 Redemption of

Units No. of units

IDFC Liquidity Manager Fund .................................................................... – – 3,049,618 3,049,618 IDFC Cash Fund - Super Inst Plan C -Gr ..................................................... – – 29,361,082 29,361,082 IDFC Money Manager Fund-Treasury Plan-Super Inst Plan C-Growth ...... 27,857,695 27,857,695 33,601,469 33,601,469 IDFC Money Manager Fund - Treasury Plan - Inst Plan B - Growth .......... 13,967,932 13,967,932 3,670,398 3,670,398 Religare Ultra Short Term Fund- Institu. Growth ....................................... – – 53,797,185 53,797,185 Religare India FMP 1 month Sr IX- Growth ................................................ – – 15,000,000 15,000,000 Religare India Monthly Interval Fund Plan A .............................................. – – 55,000,000 55,000,000 Religare India Liquid Fund ......................................................................... – – 4,384,849 4,384,849 HDFC CMF-Treasury Advantage Plan-Wholesale Gr ................................. 8,301,899 8,301,899 28,096,833 28,096,833 HDFC Liquid Fund-Premium Plan - Growth ............................................... 9,053,862 9,053,862 – – Birla Sun Life Savings Fund ....................................................................... 22,169,204 22,169,204 52,103,154 52,103,154 Birla Sun Life Short Term Fund - Inst. Gr ................................................... – – 19,867,287 19,867,287 Birla Sun Life CASH Plus Instl. Gr. ............................................................. – – 41,100,489 41,100,489 LICMF Income Plus Fund- Gr Plan ............................................................. – – 110,165,592 110,165,592 LICMF Liquid Fund- Gr Plan ....................................................................... 5,505,747 5,505,747 203,674,194 203,674,194 LICMF Income Plus Fund - Growth Plan .................................................... 34,712,053 34,712,053 – – DWS Money Plus Fund- Instl. Plan Gr. ...................................................... – – 44,087,434 44,087,434 Templeton India Short Bond Fund Super Instl. Plan ................................. – – 48,150,538 48,150,538 Templeton India Treasury Management Account ..................................... – – 401,364 401,364 Templeton Floating Rate Income Fund S.T.P. Intl Op ............................... – – 19,914,175 19,914,175 Tata Dynamic Bond Fund Option B ........................................................... – – 112,900,798 112,900,798 Tata Liquid Super High Inv. Fund Appr ...................................................... – – 31,600 31,600 Tata Floater Fund - Growth ........................................................................ 35,960,864 35,960,864 17,886,017 17,886,017 TATA Treasury Manager SHIP Growth ...................................................... 12,592 12,592 – – Reliance Liquid Fund - Treasury Plan- Intl Opn- Gr Op- Gr pl .................... 43,647,352 43,647,352 2,416,710 2,416,710 Reliance Interval Fund ................................................................................ – – 63,214,550 63,214,550 Reliance Liquidity Fund - Gr Option ........................................................... 44,658,753 44,658,753 100,383,659 100,383,659 Reliance Medium Term Fund Retail Plan- Gr Plan-Gr Opt ......................... 11,107,462 11,107,462 59,100,885 59,100,885 Reliance Money Manager Fund Institutional Option- Gr Plan ................... 950,236 950,236 202,744 202,744 KOTAK Flexi Debt Fund - Daily Dividend ................................................... – – 99,527,246 99,793,282 Kotak Liquid (Institutional Premium) Gr ..................................................... – – 2,885,204 2,885,204 Kotak Floater Long Term - Gr ..................................................................... 36,958,241 36,958,241 29,157,991 29,157,991 UTI Money Market Fund - Gr Plan ............................................................. – – 21,273,375 21,273,375 UTI Liquid Cash Plan Intl. - Gr Option ........................................................ 170,917 170,917 211,977 211,977 UTI Treasury Advantage Fund - Intl Plan (Growth Option) ......................... 209,704 209,704 86,157 86,157 HSBC Floating Rate Fund- Long Term Plan-Ints Opn. - Gr ........................ – – 19,024,717 19,024,717 HSBC Ultra Short Term Bond Fund- Ints. Plus - Gr .................................... – – 21,300,190 21,300,190 Fidelity Cash Fund (Institutional) - Growth ................................................. 12,409,198 12,409,198 3,866,544 3,866,544 Fidelity Ultra Short Term Debt Fund (Super Instl) Growth ......................... – – 16,078,319 16,078,319 Fidelity Cash Fund (Institutional) - Growth - .............................................. 13,160,088 13,160,088 – – SBI-SHF - Ultra Short ERM Fund -Inst. Plan - Growth ................................ 4,260,795 4,260,795 – – Sundaram - BNP Money Fund-Super Inst. - Growth .................................. 6,772,677 6,772,677 – – Sundaram Ultra ST Fund Super Inst. Div. Rein Daily ................................. 5,001,162 5,004,935 – – ICICI Prudential Flexible Income Plan Premium - Daily Dividend .............. 47,288,031 47,319,990 – – ICICI Prudential Institutional Plan - Super Institutional Growth ................. 75,113,073 75,113,073 – – ICICI Prudential Flexible Income Plan Premiun - Growth ........................... 29,899,997 29,899,997 – – Principal Cash Management Fund -Liquid Option Inst. Prem Plan -Growth (PNB) 31,801,237 31,801,237 – – Taurus Short Term Bond Fund-Super Insti Growth Plan ........................... 24,808,179 24,808,179 – – DSP Blackrock Money Manager Fund-Institutional Plan - Growth ............ 120,942 120,942 – – Principal Ultra Short Term Fund - Growth Plan Pinicipal Liquid Plus Fund 43,210,357 43,210,357 – – TOTAL ........................................................................................................ 589,090,249 589,125,981 1,334,974,344 1,335,240,380


Schedules

74

(Rs. in Million)


8. INVENTORIES (Refer Note B4 of Sch.21)(As certified by the Management, at lower of cost or net realisable value)Raw Stock- Tapes and Films/DVDs .................................. 4.30 8.06 Unamortised cost of Completed/Acquired– Animation Programmes ............................................ – 62.77 – Movie Copyrights ...................................................... 1,756.84 3,657.36 – Commissioned Licence Programmes ....................... 174.75 231.01 – Licensed Content ...................................................... 27.51 48.32 – Gaming Programmes ................................................ 54.23 20.23 Unutilised Free Commercial Time .................................... 52.42 54.54 Projects in Progress ..........................................................– Television Programmes ........................................... 12.07 14.12 – Games ....................................................................... 3,246.56 1,620.70 Movies Under Production ................................................. 3,209.40 4,874.18 TOTAL .............................................................................. 8,538.08 10,591.30

9. SUNDRY DEBTORS (Unsecured & considered good unless otherwise stated)i. Over Six months Billed – considered good ............................................... 67.85 365.76 – considered doubtful .......................................... 59.52 42.26

127.37 408.02 Less: Provision for doubtful debts ................................... 59.52 67.85 42.26 365.76

ii. Other Debts - considered good Billed .......................................................................... 1,305.19 1,541.75 Unbilled ..................................................................... 30.41 1,335.60 52.93 1,594.68

TOTAL ........................................................................... 1,403.45 1,960.44

10. CASH AND BANK BALANCESi. Cash and cheques on hand ...................................... 34.18 9.38 [Includes cheques on hand Rs. 32.55 Million,

Previous Year Rs. 8.06 Million]ii. Balance with Banks – Current Account ................................................ 394.39 854.84 – Fixed Deposit Account ...................................... 282.05 72.38 – Others ............................................................... 0.14 0.14

TOTAL ........................................................................... 710.76 936.74

11. OTHER CURRENT ASSETSInterest Receivable on Fixed Deposits and Others .......... 2.94 2.04 TOTAL ........................................................................... 2.94 2.04


Schedules

75

FINANCIAL SECTION

(Rs. in Million)


12. LOANS AND ADVANCES

(Unsecured & considered good unless otherwise stated)

Advances recoverable in cash or in kind or for value to be received

– Advance to UTV Employees Welfare Trust ............... 2.12 2.12

– Advance to Suppliers

– considered good ............................................... 226.06 576.92

– considered doubtful .......................................... 62.24 65.74

288.30 642.66

Less: Provision for Doubtful Advances ............................ 62.24 226.06 65.74 576.92

– Others........................................................................ 880.02 833.92

(Includes Rs. 0.07 Million [Previous Year: Rs. 0.07 Million] due from the directors of the Company, Maximum amount outstanding during the year Rs. 0.74 Million [Previous Year: Rs. 1.28 Million] )

MAT Credit Entitlement .................................................... 283.32 11.03

Share Application Money [Refer Note C 13 of Sch.21] .... 1,200.00 1,005.30

Other Advances ................................................................ 1.50 384.19

Advance Income Tax (net of provision) ............................ 643.85 651.02

[Provision for Income Tax Current Year Rs. 120.85 Million, (Previous Year: Rs. 63.57 Million)]

Other Deposits .................................................................. 99.62 164.70

TOTAL ........................................................................... 3,336.49 3,629.20

13. CURRENT LIABILITIESSundry Creditors for Capital Good, Materials & Expenses– Micro & Small Enterprises ......................................... – – – Others 953.45 1,325.08 Advance from Customers ................................................. 137.53 147.01 Advance Billings ................................................................ 22.58 17.12 Unpaid Dividend* .............................................................. 0.08 0.09 Interest Accrued But Not Due on Loans ........................... 3.94 7.15 Other Liabilities and Accruals ........................................... 886.99 623.06 TOTAL ........................................................................... 2,004.57 2,119.51

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

14. PROVISIONS

Provision for Wealth Tax (net of advances) ...................... 3.40 0.92

Provision for Employees Retirement Benefits (net) ......... 43.04 30.00

Provision for Contingencies[Refer Note C 15 (a) & (b) to Sch.21) ................................ 75.00 446.00

TOTAL ............................................................................... 121.44 476.92


Schedules

76


Schedules

(Rs. in Million)

Year Ended March 31, 2010 Year Ended March 31, 2009

15. SALES & SERVICES (NET)(Refer Note B 8 of Sch.21)

Sales and Service Revenues (net) ..................................... 6,640.53 6,065.54 TOTAL ............................................................................... 6,640.53 6,065.54

16. OTHER INCOMEProvisions No Longer Required Written Back .................. 133.79 20.00 Advance from Customer Written Back ............................. – 58.05 Dividend from Current and Non Trade Investments ......... 0.43 2.67 Profit on Sale of Investments............................................ 28.02 92.81 Gain on Foreign Exchange Fluctuation (Net) .................... – 574.77 Income from Shared Services ........................................... – 47.95 Miscellaneous Income ...................................................... 42.03 57.49 TOTAL ............................................................................... 204.27 853.74

17. DIRECT COSTTelecast Fees 492.52 473.70 Cast and Technicians’ Fees and Commission ................. 96.11 358.87 Equipment Hire, Sets, Costumes and Venue Hire ........... 59.14 116.83 Footage Expenses/Other Acquisition Cost ...................... 1,463.26 1,396.17 Consumption of Rawstock of Video Tapes and Films .... 137.35 134.56 Post Production Charges ................................................. 7.42 14.26 Travelling Expenses ......................................................... 9.15 14.83 Advertisement & Publicity ................................................ 475.09 482.52 Cost of Games Sold ......................................................... 645.49 914.88 Amortisation of Movie Copyrights ................................... 5.88 238.96 Distribution Cost .............................................................. 658.64 428.39 Programming Cost ........................................................... 228.11 460.80 Miscellaneous Expenses ................................................. 247.29 238.76

4,525.45 5,273.53 Less:Amounts inventorised towards Free Commercial Time .. 52.42 54.54 TOTAL ............................................................................... 4,473.03 5,218.99

18. STAFF COSTSalaries, Wages and Bonus .............................................. 531.64 501.19

Contribution to Gratuity, Provident & Pension Funds ....... 66.26 57.22

Staff Welfare ..................................................................... 20.11 19.11

TOTAL ............................................................................... 618.01 577.52

77

FINANCIAL SECTION


Schedules

(Rs. in Million)

Year Ended March 31, 2010 Year Ended March 31, 2009

19. OTHER EXPENSESRent - Premises ................................................................. 117.58 105.28 Repairs and Maintenance– Plant and Machinery ................................................. 0.18 0.18 – Others........................................................................ 50.61 50.79 53.22 53.40 Rates & Taxes .................................................................... 9.02 8.19 Insurance ........................................................................... 14.30 12.57 Electricity Charges ............................................................ 17.94 15.62 Travelling & Conveyance Expenses................................... 53.29 54.56 Communication & Postage Expenses ............................... 40.16 31.90 Provision for Doubtful Debts ............................................ 18.51 21.66 Bad Debts Written Off ...................................................... 31.78 5.79 Irrecoverable loans and advances written off/Provision for doubtful advances ............................................................. 19.93 7.95 Advertisement & Business Promotion Expenses ............. 145.99 120.42 Loss on Sale on Fixed Assets (Net) .................................. 1.31 29.00 Loss on Foreign Exchange Fluctuation (Net) .................... 204.94 – Directors’ Sitting Fees ....................................................... 2.90 0.44 Professional Fees .............................................................. 82.92 23.72 Marketing Expenses ......................................................... 189.15 132.75 Fixed Assets Written off ................................................... 13.01 – Miscellaneous Expenses ................................................. 62.64 53.76

TOTAL ............................................................................... 1,076.16 677.01

20. INTEREST & FINANCE CHARGES (Net)Interest on Loan from Banks– Fixed Loans ............................................................... 21.27 34.33 – Others ....................................................................... 222.62 37.63 Interest on Others ............................................................. 1.54 245.43 5.08 77.04 Discount on commercial paper amortised ....................... 58.99 – Interest on Non-convertible debentures ........................... 97.16 – Less: Interest Income On Advances to Related parties/ Fixed Deposits and Others ....................................... 17.12 153.65 [Tax Deducted at Source Rs. 0.49 MillionPrevious Year: Rs. 2.15 Million]TOTAL ............................................................................... 384.46 (76.61)

78

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A Background

UTV Software Communications Limited was incorporated under the laws of India on June 22, 1990.

i) The Company has the following subsidiaries/joint ventures:

Subsidiary/Joint Ventures Date of Incorporation Place of Incorporation

Proportion of effective ownership as on March 31

2010 2009

UTV Communications (USA) LLC April 26, 2004 United States of America 100% 100%

IG Interactive Entertainment Limited, UK September 6, 2004 United Kingdom 100% 100%

Ignition Entertainment Limited, UK [subsidiary of IG Interactive Entertainment Limited - Refer Note (i) below] September 26, 2001 United Kingdom 89.58% 70%

Ignition Entertainment Limited, USA (100% subsidiary of Ignition Entertainment Limited, UK) May 22, 2006 United States of America 89.58% 70%

Ignition London Limited(formerly Digi Guys Limited) (100% subsidiary of Ignition Entertainment Limited, UK) July 19, 2001 United Kingdom 89.58% 70%

Indiagames Limited [Refer Note (ii) below] February 1, 2000 India 60.40% 60.42%

UTV Global Broadcasting Limited [Refer Note (iii) below] June 6, 2007 India 85% 75%

Genx Entertainment Limited (100% subsidiary of UTV Global Broadcasting Limited) February 19, 2007 India 85% 75%

UTV Entertainment Television Limited(100% subsidiary of UTV Global Broadcasting Limited) April 28, 2007 India 85% 75%

UTV Games Limited September 5, 2008 Mauritius 100% 100%

True Games Interactive Inc. December 28, 2007 United States of America 80% 80%

First Future Agri & Developers Limited April 7, 2008 India 100% 100%

UTV New Media Limited September 20, 2007 India 100% 100%

UTV TV Content Limited [Refer Note (iv) below] July 9, 2007 India 100% 100%

R B Entertainment Limited May 6, 2008 India 60% 60%

UTV Teletalkies Limited (subsidiary of UTV TV Content Limited w.e.f. July 3, 2009) July 3, 2009 India 51% –

Smriti Irani Television Limited(Joint Venture with Ms. Smriti Irani) December 6, 2007 India 50% 50%

(i) During the year, IG Interactive Entertainment has partially converted the loan given to Ignition Entertainment Limited, UK, thereby increasing the holding to 89.58% from 70% of the issued equity share capital of Ignition Entertainment Limited.

(ii) During the year, the Company has acquired the equity capital in Indiagames Limited held by its wholly-owned subsidiary IG Interactive Limited for a consideration of Rs. 259.19 Mio. Accordingly, the Company holds 60.40% equity capital in Indiagames Limited out of which 1.78% is held for the benefit of the management shareholders, which is of temporary nature and as such is not considered for consolidation as per Accounting Standard-21 on ‘Consolidated Financial Statements’.

(iii) During the year, the Company has acquired additional 10% equity shares in its subsidiary UTV Global Broadcasting Limited held by a promoter group company for a consideration of Rs. 329.70 Mio. Accordingly, the Company holds 85% equity share capital of UTV Global Broadcasting Limited as on the Balance Sheet date.

(iv) On July 3, 2009 , UTV TV Content Limited, a subsidiary of the Company, has acquired 51% holding in UTV Teletalkies Limited, making it a step down subsidiary of the Company.

Schedule 21

79

FINANCIAL SECTION

(v) During the year, UTV Games Limited has paid True Games Interactive, a step down subsidiary, US Dollars 4.0 million as further consideration for stake acquired in the previous year, as per the Shareholders’ & Share Subscription agreement.

B. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation of Consolidated Financial Statements:

The consolidated financial statement have been prepared and presented under the historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

The Consolidated Financial statements relate to UTV Software Communications Limited (‘the Company’), its subsidiary companies and joint venture Companies (together refered to as ‘the Group’) and 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 same manner as the Company’s separate financial statements.

The Consolidated Financial Statements have been prepared on the following basis:

a In respect of subsidiary companies, the financial statements have been consolidated on a line-by-line basis by adding together the book values of like item of assets, liabilities, incomes and expenses, after fully eliminating intra-group balances and unrealised profits/losses on intra-group transactions as per Accounting Standard 21 - “Consolidated Financial Statements”. In accordance with the Standard, the losses applicable to the minority, to the extent, if it exceeds, the minority’s interest in the Equity of the subsidiary, has been adjusted against the majority interest.

b In respect of joint venture companies, the financial statements have been consolidated as per Accounting Standard 27 - “Financial Reporting of Interests in Joint Ventures.”

c The excess of cost to the Company of its investment in the subsidiary company over the Company’s share of net assets of the subsidiary company is recognised in the financial statements as goodwill, which is tested for impairment at each balance sheet date. The excess of Company’s share of net assets of the subsidiary company over the cost of acquisition is treated as capital reserve.

d The results of operations of a subsidiary are included in the Consolidated Financial Statements from the date on which the parent-subsidiary relationship comes into existence. The results of operation of a subsidiary with which the parent-subsidiary relationship ceases to exist are included in the consolidated statement of profit and loss until the date of cessation of the relationship. The difference between the proceeds from the disposal of investment in a subsidiary and the carrying amount of its assets less liabilities as on the date of disposal are recognised as profit or loss on disposal of investment in the subsidiary.

e The translations of financial statements into Indian Rupees relating to non-integral foreign operations have been carried out using the following procedures:

– assets and liabilities have been translated at closing exchange rates at the year end; and

– income and expenses have been translated at an average of monthly exchange rates.

The resultant translation exchange gain/(loss) has been disclosed as Foreign Currency Translation Reserve under Reserves and Surplus.

f The Notes and Significant Accounting Policies to the Consolidated Financial Statements are intended to serve as a guide for better understanding of the Group’s position. In this respect, the Group has disclosed such notes and policies, which represent the requisite disclosure.

2. Fixed Assets and Depreciation:

(i) Fixed assets are stated at cost of acquisition less accumulated depreciation. The group capitalises all costs relating to the acquisition and installation of fixed assets.

(ii) Depreciation is provided based on management estimate of useful lives of the fixed assets, on the straight line method prorata to the period of use or at the rates prescribed in Schedule XIV of the Companies Act, 1956, whichever is higher. The management has estimated the useful life of Plant & Machinery to be 12 years (lower

Notes to the Consolidated Financial Statements (Contd.)

Schedule 21

80

useful life than that prescribed by Schedule XIV of the Companies Act, 1956). However, it was not practicable to use uniform accounting policies for depreciation in the case of following subsidiaries:

Asset Head Depreciation Rates

IG Interactive Entertainment

Limited - Group/True Games Interactive

UTV Communications

(USA) LLC

UTV Global Broadcasting

Limited & Subsidiaries

Indiagames Limited

Furniture & Fixtures 20% - 33% 20.00% – 20.00%

Computers/Softwares 33.33% 20.00% – 33.33%

Office Equipment 20% - 33% – – 20.00%

Motors Vehicles 25.00% – – 20.00%

Plant & Machinery 4.75% – 4.75% –

Gross Value of Fixed Assets (Rs. in Million) - March 31, 2010* 198.29 1.05 285.83 41.98

% of Total Consolidated Gross Block of Fixed Assets - March 31, 2010* 4.07% 0.02% 5.86% 0.86%

Gross Value of Fixed Assets (Rs. in Million) - Mar 31, 2009 179.45 1.03 31.54 49.04

% of Total Consolidated Gross Block of Fixed Assets - Mar 31, 2009 3.90% 0.02% 0.69% 1.07%

* The impact on depreciation due to difference in accounting policy is not material.

(iii) Fixed Assets individually costing less than Rs. 5,000 or less are fully depreciated in the year of acquisition.

(iv) Leasehold Improvements are amortised over the period of lease in India and on a straight line basis over a period of 5 years in case of Ignition Entertainment Limited, UK, a step-down subsidiary of the Company.

(v) Intangible Assets are recorded at acquisition cost and in case of assets acquired on merger at their carrying values. Websites/Brands are recognised as Intangible Asset if it is expected that such assets will generate future economic benefits and amortised over their useful life not exceeding four/ten years or estimated useful life whichever is lower.

(vi) Costs involved in the production of a game which requires a production period of more than one month are capitalised as Game Development Cost. Game Development Cost is amortised, once the game is completed, depending on the anticipated term of the game accruing revenue. Games completed are amortised over a period of 6 to 9 months.

3. Investments:

(i) Long-term investments are stated at cost, except where there is a diminution in value other than temporary, in which case requisite provision is made to write down the carrying value to recognise such decline.

(ii) Current investments are stated at cost or fair value, whichever is lower.

4. Inventories:

(i) The Group amortises 60% of the cost of movie rights acquired or produced by it, on first theatrical release of the movie. The said amortisation pertaining to Domestic Theatrical Rights, International Theatrical Rights, Television Rights, Music Rights, Video Rights and others is made proportionately based on management estimate of revenues from each of these rights. In case the aforesaid rights are not exploited along with or prior to the first theatrical release, proportionate cost of the said right is carried forward to be written off as and when such right is commercially exploited or at the end of one year from the date of first theatrical release, whichever occurs earlier. Balance 40% is amortised over the balance license period or based on management estimate of future revenue potential, as the case may be.


Schedule 21

81

FINANCIAL SECTION

(ii) Acquired rights pertaining to movies, animation & other content, are amortised on the exploitation of such rights based on the management estimates of revenue potential. In the case of its broadcasting business, the group amortises the cost of commissioned programs over three years based on management estimates of the revenue potential over the period. The cost of licensed/acquired programs is amortised over the license period or within three years from the date of commencement of license period/acquisition, whichever is earlier.

(iii) Projects in progress and Movies under Production are stated at cost. Cost comprises of material cost, cost of services, other expenses and advances paid. Costs get accumulated till the first theatrical release of the movie.

(iv) Pilot episodes are stated at cost. Pilots are written off at the end of 3 years from the year of production of respective pilot, in case the same is not developed into a serial.

(v) Raw Stock, Digital Video Discs/Compact Discs stock, Unutilised Free Commercial Time (FCT) and finished stock of games are stated at lower of cost or net realisable value. Costs attributable to the development and production of computer games software are carried forward as work-in-progress and released to the profit and loss account when the project realises anticipated revenues.

(vi) The borrowing cost directly attributable to a movie/game is capitalised as part of the cost of movie/game. In case of general borrowings, borrowing cost eligible for capitalisation for movies/games is determined by applying a weighted average capitalisation rate to the expenditure on that movie/game.

(vii) The group evaluates the realisable value and/or revenue potential of inventory on an annual basis based on market conditions and future demand and appropriate write down is made in cases where accelerated write down is warranted.

5. Current Taxation:

Provision for Current tax (including Wealth Tax) and Fringe benefit tax has been made in accordance with the Income tax and Wealth tax laws prevailing for the relevant year in the countries in which the subsidiaries of the group are domiciled.

6. Deferred Taxation:

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

7. Foreign Currency Transactions:

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities as at the Balance sheet date are translated at the rate of exchange prevailing at the date of the Balance sheet. Non-monetary foreign currency items are carried at cost. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and Loss Account. Premium or discount in respect of forward contract is accountted over the period of the contract.

8. Revenue Recognition:

(i) Revenues on commissioned television programmes, animation programmes and dubbing are recognised on delivery. The amount recognised is the predetermined price, the collection of which is reasonably assured.

(ii) Revenues from sale of airtime (net of agency commission) are recognised when the related advertisements or commercials appears before the pubic, i.e., on telecast.

(iii) Revenues from licensing and distribution of television programmes, games and movies are recognised in accordance with the licensing and distribution agreement or on physical delivery of the programmes/movies/games, whichever is later. Home Video sales are recognised as per underlying agreements based on delivery.


Schedule 21

82

(iv) Revenue arising from content distribution/mobile games downloads/online games is recognised on receipt of the download reports or revenue receipts reports in accordance with the agreements entered. Event sponsorship revenue is recognised on completing the execution of the activity.

(v) Advertisement sales revenue (net of agency commission) is recognised when the related advertisement or commercial appears before the public. Subscription income from the distribution of channels is recognised on a prudent basis in accordance with the right to receive the subscription as per the terms of the agreements. Income from exploitation of Interactive rights is recognised in accordance with the terms of the agreement with the service provider and/or intermediary.

(vi) Dividend is recognised when the right to receive the dividend is unconditionally established at the Balance Sheet date.

9. Retirement Benefits:

(i) Long-term Employee Benefits:

In case of Defined Contribution plans, the group’s contributions to these plans are charged to the Profit and Loss Account as incurred. Liability for Defined Benefit plans is provided on the basis of valuations, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. The obligations are measured as the present value of estimated future cashflows discounted at rates reflecting the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. The expected rate of return of plan assets is taken at the rate of return on Government securities. Plan assets (where funded) are measured at fair value as at the Balance Sheet date. The liability for leave encashment is provided on the basis of valuation, as at Balance Sheet date, carried out by an independent actuary.

ii) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised in the Profit and Loss Account in the year in which they arise.

10. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of a qualifying asset are capitalised as a part of the cost of the asset. Other borrowing costs are recognised as an expense in the year in which they are incurred.

11. Lease:

Finance Leases

Assets acquired under finance lease are recognised as assets with corresponding liabilities in the Balance Sheet at the inception of the lease at amounts equal to lower of the fair value of the leased asset or at the present value of the minimum lease payments. These leased assets are depreciated in line with the group’s policy on depreciation of fixed assets. The interest is allocated to periods during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Operating Leases

Lease payments for operating leases are recognised as expense on a straight-line basis over the lease term. Initial direct costs are recognised immediately as an expense.

12. Impairment of Assets:

The group assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If such recoverable amount of the asset 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 is recognised in the Profit & Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.


Schedule 21

83

FINANCIAL SECTION

13. Employee Stock Option Schemes (ESOP):

The group accounts for compensation expense under the Employee Stock Option Schemes using the intrinsic value method as permitted by the Guidance Note on “Accounting for Employee Share-based Payments” issued by the Institute of Chartered Accountants of India. The difference between the market price and the exercise price as at the date of the grant is treated as compensation expense and charged over the vesting period.

14. Earnings Per Share:

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted at the beginning of the period, unless issued at a later date.

15. Provisions for Contingencies and Contingent Liabilities:

The group recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a 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 of outflow of resources is remote, no provision or disclosure is made.

16. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the periods in which the results are known/materialise.

C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. CAPITAL RESERVE:

The Company had allotted 4,532,000 warrants each convertible into equivalent number of equity shares to Unilazer Exports and Management Consultants Limited (‘Unilazer’), on a preferential basis on May 6, 2008, with an option to convert it into equity shares of the Company of nominal value of Rs. 10 each at a price of Rs. 860.79 (including a premium of Rs. 850.79 per share) within a period of 18 months from the date of issue. The Company had received Rs. 390.11 million being 10% of the total amount of the warrants on allotment. The aforesaid warrants have lapsed and 10% of the total amount paid by Unilazer on allotment of warrant is forfeited and transferred to capital reserve.

(Rs. in Million)

March 31, 2010 March 31, 2009

2 Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) 9.41 230.35

3 Contingent liabilities not provided for: Nature Description(a) Claims against the group not

acknowledged as debtsNotice for Interest claim by a broadcaster during 2000-2001 towards delayed payment made by the company in earlier years. The interest claim by the broadcaster is disputed by the company. 34.40 34.40


Schedule 21

84

(Rs. in Million)

March 31, 2010 March 31, 2009

(b) Appeals filed in respect of disputed demands:

Income Tax appeal before Commissioner/Deputy Commissioner of Income Tax for the Assessment Years 2000-01/2004-05/2005-06/2007-08. 10.80 35.80

(c) Bank Guarantees/Corporate Guarantees/Outstanding Letter of Credit for which the group has given counter guarantees

Bank guarantee issued in favour of a broadcaster for accreditation/Counter Guarantees/Corporate Guarantee issued in favour of companies. 2,858.28 593.00

(d) Bank Guarantees issued favouring various Government Authorities

The Brihanmumbai Mahanagarpalika, Mumbai 0.66 1.39

Asst. Commissioner of Customs 1.65 2.31 4.36 5.75 (e) Legal cases and claims filed

against the groupPertains to litigation/disputes with parties. The group has filed legal cases against the parties and no outflow is foreseen. 36.05 38.36

(f) Value Added Tax (VAT)/Sales Tax

Pertains to VAT/Sales tax levied on sale/lease of copyrights under Maharashtra VAT Act, 2002 w.e.f. April 1, 2005. This is disputed by the whole film fraternity as there is no ground for levying VAT on film distribution activity. The contingent liability is for the period April 1, 2005 to March 31, 2010. 89.14 60.22

(g) Service Tax Pertains to Reverse charge liability on Minimum Guarantees paid outside India by a subsidiary during Sep-2004 to Sep-2007. 6.28 –

Note: Future cash outflows in respect of (b),(e) & (f) above are determinable only on receipt of judgements/decisions pending at various forums/authorities.

4. Share Capital

(i) The Board of Directors, vide resolution dated October 9, 2009, approved increase of Authorised Share Captial from Rs. 450 Million to Rs. 700 Million which has been approved by the shareholders of the Company on November 12, 2009 through postal ballot.

(ii) On January 25, 2010, pursuant to the Scheme of Arrangement between the Company and its subsidiaries - UMP Plc and UTV Motion Pictures (Mauritius) Limited (refer Note C 5 to Sch.21), the Company has issued 6,436,782 equity shares of Rs. 10 each to the minority shareholders of UMP Plc, at a swap ratio of 1 equity share of the Company for every 3.75 shares of UMP Plc.

(iii) Employee Stock Option Scheme - 2007:

Pursuant to the resolution passed by the Board of Directors on July 27, 2007 and members of the Company at the Annual General Meeting held on September 25, 2007, the Company had introduced Employee Stock Option Scheme (“the scheme”) for permanent employees and directors of the Company & of its subsidiaries, as may be decided by the Compensation Committee/Board.

The scheme provides that the total number of options granted there under will be 1,000,000. Each option, on exercise, is convertible into one equity share of the company having face value of Rs. 10. The options have been granted at an exercise price which is higher than the market price as on the date of the grant. Accordingly, the Company has not recognised any expense on account of grant of stock options.


Schedule 21

85

FINANCIAL SECTION

The details of the activity under the scheme during the year is as follows:

ParticularsYear Ended


March 31, 2009

Option Outstanding at the beginning of the year 482,500 530,000

Options Granted during the year 652,500 60,000

Options Exercised during the year – –

Options Lapsed during the year (142,500) (107,500)

Options Outstanding at the year end 992,500 482,500

Employee Stock Option Scheme - 2009:

Pursuant to the resolution passed by the Board of Directors on July 10, 2009 and members of the Company at the Annual General Meeting held on September 4, 2009, the Company had introduced Employee Stock Option Scheme 2009 (“the 2009 scheme”) for permanent employees and directors of the Company & of its subsidiaries, as may be decided by the Compensation Committee/Board.

The 2009 scheme provides that the total number of options granted there under will be 1,000,000. Each option, on exercise, is convertible into one equity share of the company having face value of Rs. 10. The options have been granted at an exercise price which is higher than the market price as on the date of the grant. Accordingly, the Company has not recognised any expense on account of grant of stock options.

The details of the activity under the 2009 scheme during the year is as follows:


March 31, 2010

Option Outstanding at the beginning of the year –

Options Granted during the year 57,500

Options Exercised during the year –

Options Lapsed during the year –

Options Outstanding at the year end 57,500

(iv) UTV Global Broadcasting Limited, a subsidiary of the Company, had introduced Employee Stock Option Scheme - 2008 for its employees. The scheme provides that the total number of options granted there under the scheme will be 100,000. Each option, on exercise, is convertible into one equity share of the Company having face value of Rs. 10/- each. The options have been granted at an exercise price of Rs. 10/- each, which is higher than the value of the underlying share determined by an independent valuer as on the date of the grant. Accordingly, no expense has been recognised on account of grant of stock options.




March 31, 2009Option Outstanding at the beginning of the year 43,500 70,500 Options Granted during the year 20,000 – Options Exercised during the year (100) – Options Lapsed during the year (11,400) (27,000)


5. Scheme of Arrangement:

(i) Scheme of Arrangement between the Company and its subsidiaries - UMP Plc and UTV Motion Pictures Mauritius Limited.

The Board of Directors of the Company at its meeting held on July 20, 2009 considered a proposal to consolidate the business of its subsidiaries UMP Plc (“UMP”) and UTV Motion Pictures (Mauritius) Limited (“UTV Mauritius”) into the Company. Pursuant to the Scheme of Arrangement (‘the Scheme’) under Section 391 to 394 (read with


Schedule 21

86

Section 78 and Section 100 to 103) and other applicable provisions of the Companies Act, 1956, sanctioned by the Honorable Bombay High Court on January 8, 2010, the entire assets and business of UMP Plc and UTV Motion Pictures (Mauritius) Limited have been transferred and vested in the Company with effect from the appointed date viz April 1, 2007. The above order has been filed with the Registrar of Companies, Maharashtra on January 25, 2010 and accordingly, the order has become effective from that date.

The general nature of business of UMP and UTV Mauritius is film production, distribution, syndication business, animation business and the accounting for amalgamation is as per ‘Pooling of Interest Method’ prescribed in AS-14 ‘Accounting for Amalgamation’, issued by The Institute of Chartered Accountants of India.

In accordance with the Scheme:

(a) (i) All the assets and liabilities of UMP & UTV Mauritius are recorded at book values appearing in their books immediately preceeding the appointed date. The inter company balances between UMP, UTV Mauritius and the Company have been eliminated from the appointed date.

(ii) The share capital and securities premium in respect of shares held by minority shareholders has been accounted as Capital Reserve to reflect the nature of the transaction upon amalgamation. Subsequently, the same has been transferred to General Reserve in accordance with the accounting treatment prescribed by the scheme which is in deviation to AS-14 issued by ICAI.

(iii) The profit or loss (after reflecting the financial position on consistent accounting policies) for the accounting years beginning the appointed date have been added to the opening balance of accumulated profit & loss account.

(iv) The Company has transferred a sum of Rs. 7,500 Mio from the Securities Premium Account to Business Restructuring Reserve Account (BRR).

(b) (i) The Company has written down the carrying amounts of certain assets in the profit and loss account and an equivalent amount has been drawn from Business Restructuring Reserve account and credited to the profit and loss account, as follows:

Particulars (Rs. in Million)Fixed Assets (net of accumulated depreciation) 7.30 Inventory 4,199.78 Sundry Debtors 84.97 Advance to Suppliers 134.70 Others 150.46 Total (A) 4,577.21

(ii) On January 25, 2010, pursuant to the Scheme of Arrangement between the Company and its subsidiaries - UMP Plc and UTV Motion Pictures (Mauritius) Limited, the Company has issued 6,436,782 equity shares of Rs. 10 each to the minority shareholders of UMP Plc, at a swap ratio of 1 equity share of the Company for every 3.75 shares of UMP Plc. The face value of the share issued has been adjusted against the Business Restructuring Reserve in accordance with the Scheme.

Shares issued (B) 64.37

(iii) Expenses relating to the Scheme adjusted against Business Restructuring Reserve (C) 255.89

Total (A+B+C) 4,897.47

(ii) Scheme of Arrangement - UTV Entertainment Television Limited & Genx Entertainment Limited:

The Board of Directors of the subsidiary companies UTV Entertainment Television Limited and Genx Entertainment Limited had approved a scheme of arrangement in respective companies under Sections 391 to 394 read with section 78 and 100 to 103 of the Companies Act 1956 (“the Schemes”) on February 15, 2010 which was filed with the Hon’ble High Court of Judicature at Bombay and was awarded the approval vide order dated June 9, 2010. On approval, a separate reserve account titled as Business Reorganisation Reserve (“BRR”) has been created by transferring balance standing to the credit of Securities Premium Account of the companies for adjustment of certain


Schedule 21

87

FINANCIAL SECTION

expenses as prescribed therein. Accordingly, Rs. 1,500.00 millions has been transferred to BRR. The companies have written down the carrying amounts of inventories in the profit and loss account and an equivalent amount has been drawn from Business Reorganisation Reserve account and credited to the profit and loss account, as follows:

Particulars (Rs. in Million)Programming Inventory 1,499.80 Expenses connected with the Schemes 0.20 Total 1,500.00

In accordance with the respective Schemes and as per the legal opinion obtained, the effect of accounting prescribed by the Schemes has been adopted for the purposes of the consolidated financial statements of the Group. Accordingly, Rs. 1,500 million has been drawn from the Business Restructuring Reserve to set off the write down of assets in the books of the respective subsidiaries.

(iii) Scheme of Arrangement - Indiagames Limited

A Scheme of Arrangement (`the Scheme’) at Indiagames, a subsidiary of the Company, under Section 391 to 394 read with Section 78 and 100 to 103 of the Companies Act, 1956 was sanctioned by the Hon`ble High Court of Judicature at Mumbai on June 9, 2010. The scheme become effective from 16th June, 2010 (‘Effective Date’) (with April 1, 2009 as the appointed date) on filing the certificate copy of High Court Order with the Registrar of Companies. Pursuant to the scheme, the Company has written off the unamortised capitalised game development cost of Rs. 18.60 million and unamortised prepaid licenses of Rs. 33.88 million against balance available in the Securities Premium Account with retrospective effect from April 1, 2009. The Group’s share of such write off amount to Rs. 30.77 million.

Note: The above write downs in (i), (ii) & (iii) above have been debited to Business Restructuring Reserve gross of any tax impact.

(iv) Had the above Schemes not prescribed aforesaid treatment, the impact would have been as under:

i) In the Profit & Loss Account(Rs. in Miliion)

ParticularsFor the Year ended

March 31, 2010Increase/(Decrease)

Direct Costs 5,719.44 Other Expenses 377.63 Depreciation 10.91 Profit Before Tax (6,107.98)Profit After Tax (6,107.98)

ii) In the Balance Sheet

Particulars As at March 31,2010Increase/(Decrease)

Securities Premium Account 7,530.77 General Reserve (1,102.53)

(v) The Scheme of arrangement for amalgamation of IT Nation Media Ltd (ITNML), a wholly owned subsidiary in the technology domain, with UTV New Media Limited (UNML), under Section 391 to 394 (read with Section 78 and Section 100 to 103) and other applicable provisions of the Companies Act, 1956, has been sanctioned by the Honorable High Court of Bombay on July 10, 2009 from the appointed date being April 1, 2008. The sanctioned scheme has been filed with the Registrar of Companies, Maharashtra on August 14, 2009 hence the scheme becomes effective from that date.

In accordance with the scheme: i. All assets and liabilities of ITNML transferred and vested in UNML at fair values w.e.f. appointed date and the

amalgamation has been accounted for under the ‘Purchase Method’ as prescribed by Accounting Standard (AS-14) Accounting for Amalgamation, issued by the Institute of Chartered Accountants of India.

ii. The incidence of adopting uniform Accounting Policies, if any, is quantified and adjusted in the Profit & Loss account of the UNML.


Schedule 21

88

iii. The investment in the equity shares of ITNML appearing in the books of accounts of UNML has been cancelled.

iv. Inter-company balances between UNML and ITNML have been cancelled.

Goodwill arising on Amalgamation has been written off on appointed date, on prudent basis. Effect of such write off of Rs.65.08 mio has been adjusted against retained earnings.

6 (a) Components of Deferred Tax Assets and Liabilities arising are:

(Rs. in Million)

ParticularsAs at

March 31, 2010As at

March 31, 2009Deferred Tax Assets – Provision for Doubtful Debts 15.73 10.39 – Provision for Doubtful Advances 20.68 22.35 – Business Losses & Unabsorbed Depreciation 1,223.25 731.51 – Provision for Retirement Benefits 5.73 4.71 – Timing Difference between books and tax depreciation 16.25 15.83 – Expense/Interest Allowable only on Payment/Receipt 2.23 15.33 – Others 0.18 0.35

1,284.05 800.47 Deferred Tax Liabilities – Inventories 264.31 6.54 – Others 3.79 –

268.10 6.54 Net Deferred Tax Asset 1,015.95 793.93

(b) Considering long-term corporate strategies, future profitability and virtual certainty, Deferred Tax Asset (net) of Rs. 1,015.95 Million has been recognised as on March 31, 2010 and the management is of the opinion that in the long run, the carry forward losses would be fully absorbed.

7 (a) Related Party Disclosures as required by Accounting Standard AS-18 ”Related Parties Disclosures” issued by the Institute of Chartered Accountants of India are given below :

(i) Shareholder in UTV Software Communications Limited (Parent Company) Unilazer Exports & Management Consultants Limited Unilazer (Hong Kong) Limited United Tele-Shopping & Marketing Company Limited The Walt Disney Company (South east Asia) Pte Limited (TWDC)* * Pursuant to Shareholders’ agreement between TWDC and the founder promoter group, TWDC does not

have ‘control’ as defined by AS-18 over the Company. (ii) Related parties where common control exists: UTV News Limited Unilazer Holdings Limited Television News and Entertainment (I) Limited Vijay Broadcasting Private Limited Unilazer Media Limited

(iii) Key Management Personnel: Executive Directors Rohinton Screwvala Deven Khote


Schedule 21

89

FINANCIAL SECTION

(b) (i) Disclosure in respect of transactions with parties referred to in item (a) (i) & (ii) above:

(Rs. in Million)Shareholders Common Control Entities

Year ended March 31, 2010




Sales and Services– UTV News Limited 10.93 19.17

Share of Subscription income– UTV News Limited 30.38 10.75

Advance Warrants Money Received– Unilazer Exports & Management Consultants Limited – 390.11

Purchase of Equity Shares of UTV Global Broadcasting Limited from:– Unilazer Exports & Management Consultants Limited 329.70 –

Finance (Equity contributions in cash or in kind)– Equity Shares Application Money in UTV News Limited 181.60 1,005.30 – Refund of Equity Shares Application Money by UTV

News Limited 1,186.90 –

– Equity Shares Application Money in Unilazer Media Limited 1,200.00 –

Interest Charged to– UTV Global Broadcasting Limited – 110.40

Guarantees and Collaterals Corporate Guarantee taken from:– Unilazer Exports & Management Consultants Limited 727.08 – Corporate Guarantee given on behalf of:– UTV News Limited 727.08 30.57

Expenses Paid on behalf of– UTV News Limited 2.75 24.90 – Unilazer Exports & Management Consultants Limited 0.31 –

Expenses Reimbursed to– UTV News Limited – 0.01

Advisory fees charged to– UTV News Limited – 27.40

Advances Given – UTV News Limited 214.57 –– Unilazer Exports & Management Consultants Limited – 329.70

Advances Repaid– UTV News Limited 256.81 22.84 – Unilazer Exports & Management Consultants Limited 0.31 7.00

Outstanding Balance Receivable– UTV News Limited 22.50 67.02

(ii) Disclosure in respect of transactions with persons referred to in item (a) (iii) above:

(Rs. in Million)

Remuneration:Year ended

March 31, 2010Year ended

March 31, 2009

– Rohinton Screwvala 10.77 9.06 – Deven Khote 3.67 3.72


Schedule 21

90

8. Leases:

a) Finance Lease: Disclosure on Finance Leases as required by Accounting Standard-19 is as follows:

(Rs. in Million)

ParticularsYear ended


March 31, 2009Minimum Lease Payments PayableWithin One year 13.04 15.96 Within One to five years 9.15 16.25

Present Value of Lease payments Within One year 12.65 15.48 Within One to five years 8.47 15.03

b) Operating Lease:

The group’s significant leasing arrangements are mainly in respect of office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under “Other Expenses” in Schedule 19.

These leasing arrangements are in most cases renewable by mutual consent. The group has placed a refundable deposit of Rs. 58.71 Mio (Previous year: Rs. 51.76 Mio) in respect of these leasing arrangements. Future lease rentals payable are as follows:

(Rs. in Million)



March 31, 2009Not Later than one year 164.27 144.18 Later than one year but not later than five years 315.51 337.92 Later than five years 52.45 89.94

9. Earnings Per Share:

DescriptionYear ended


March 31, 2009Profit After Tax & Minority Interest (Rs. in Million) 533.32 356.28 Weighted average number of shares for basic earnings per share (nos.)– Equity Shares of Rs. 10 each fully paid up 40,632,250 33,196,160 Weighted average number of shares for diluted earnings per share (nos.)– Equity Shares of Rs. 10 each fully paid up 40,794,232 33,196,160 Earning Per share (Rs.)– Basic 13.13 10.73 – Diluted 13.07 10.73

Reconciliation of basic and diluted shares used in computing earnings per share:

in Nos. in Nos.

Number of shares considered as basic weighted average shares outstanding 40,632,250 33,196,160 Add: Effect of dilutive issues of stock options 161,982 – Number of shares considered as weighted average shares and potential shares outstanding 40,794,232 33,196,160

10. Segment Reporting - Segment Identification, Reportable Segments and definition of each reportable segment:


Schedule 21

91

FINANCIAL SECTION

(i) Primary/Secondary Segment Reporting Format:

(a) The risk/return profile of the group’s business is determined predominantly by the nature of its products and services. Accordingly, the business segments constitute the primary segments for dislcosure of segment information.

(b) In respect of secondary segment information, the group has identified its geographical segments as (i) domestic and (ii) overseas. The secondary segment information has been disclosed accordingly.

(ii) Segment Identification:

Business segments have been identified on the basis of the nature of the products/services, the risk/return profile of individual businesses, the organisational structure and the internal reporting system of the group.

(iii) Reportable Segments:

Reportable segments have been identified as per the criteria prescribed in Accounting Standard-17 - ‘Segment Reporting’ as specified in the Companies (Accounting Standards) Rules, 2006.

(iv) Segment Composition:

(a) Television segment comprises television content, airtime sales and dubbing services;

(b) Movies segment comprises the film production, distribution and syndication business;

(c) Games Content segment comprises the online (including MMORPG), consol and mobile gaming businesses;

(d) New Media segment comprises the web and mobile business of the group with focus on technology (techtree.com, cxotoday.com), entertainment ([email protected]) and Mobile Value Added Services.

(e) Broadcasting segment comprises the television broadcast business of the group which includes the channels - UTV Bindass, UTV Action, UTV World Movies and UTV Movies.

(v) Revenue and expenses have been accounted on the basis of their relationship to the operating activities of the segment. Incomes and expenditures which are related to the group as a whole and are not allocable to segments on a reasonable basis have been allocated under “Unallocable Income and Expenditure”. Assets and Liabilities, which relate to the group as a whole, and are not allocable to segments on a reasonable basis, have been included under “Unallocable Assets and Liabilities.”

(vi) Inter-segment Transfers - The group accounts for intersegment sales and transfers at cost.

(Rs. in Million)

Particulars TELEVISION MOVIES GAMES CONTENT NEW MEDIA BROADCASTINGINTER SEGMENT ADJUSTMENT

TOTAL

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

REVENUEExternal Revenue 1,013.30 1,316.80 3,154.37 2,762.09 950.95 1,104.83 119.07 180.26 1,511.02 886.82 (108.18) (185.26) 6,640.53 6,065.54 RESULTSegment Result 33.85 54.41 950.95 537.83 (74.20) (289.44) (73.70) (45.32) (36.30) (281.74) – – 800.60 (24.26)Less:Interest & Finance Charges

(384.46) 76.61

Unallocable Other Expenditure

(217.30) (171.22)

Add :

Unallocable Other Income

32.64 150.71

Profit/(Loss) Before Taxation

231.48 31.84


Schedule 21

92

(Rs. in Million)

Particulars TELEVISION MOVIES GAMES CONTENT NEW MEDIA BROADCASTINGINTER SEGMENT ADJUSTMENT

TOTAL

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2010

Year ended March

31, 2009

OTHER INFORMATION

Segment Assets 467.23 609.28 5,317.10 10,072.87 5,506.01 3,920.45 306.26 434.19 4,999.33 4,212.77 – – 16,595.93 19,249.56

Unallocable Assets 3,473.89 3,347.10

Total Assets 467.23 609.28 5,317.10 10,072.87 5,506.01 3,920.45 306.26 434.19 4,999.33 4,212.77 – – 20,069.82 22,596.66

Segment Liabilities 145.20 225.95 495.73 993.01 462.13 576.78 58.41 76.00 753.67 579.16 – – 1,915.14 2,450.90

Unallocable Liabilities 10,431.72 6,273.25

Total Liabilities 145.20 225.95 495.73 993.01 462.13 576.78 58.41 76.00 753.67 579.16 – – 12,346.86 8,724.15

Depreciation

Segment Depreciation 4.61 4.94 5.27 15.36 12.99 18.26 10.17 6.94 15.89 14.76 – – 48.93 60.26

Unallocable Depreciation

12.73 9.27

Total Depreciation 4.61 4.94 5.27 15.36 12.99 18.26 10.17 6.94 15.89 14.76 – – 61.66 69.53

Non Cash Expenses other than Depreciation

Segment Non Cash Expenditure

9.60 7.55 23.80 259.63 1.96 6.59 3.51 – 20.39 1.91 – – 59.26 275.68

Unallocable Non Cash Expenditure

44.76 53.29

Total Non Cash Expenses other than Depreciation

9.60 7.55 23.80 259.63 1.96 6.59 3.51 – 20.39 1.91 – – 104.02 328.97

GEOGRAPHICAL SEGMENT

Revenue

India 999.09 1,289.47 2,084.89 1,982.27 346.02 403.64 114.76 173.21 1,436.40 877.04 (108.18) (185.26) 4,872.97 4,540.37

Overseas 14.21 27.33 1,069.48 779.82 604.93 701.19 4.31 7.05 74.62 9.78 – – 1,767.56 1,525.17

Assets

India

Segment Assets 467.23 609.28 4,388.75 1,926.54 542.97 648.91 306.26 434.19 4,999.33 4,212.77 – – 10,704.54 7,831.69

Unallocable Assets – in India

3,473.89 3,347.10

– Overseas – – 928.35 8,146.33 4,963.04 3,271.54 – – – – – – 5,891.39 11,417.87

11. In accordance with the group’s accounting policy, Rs. 378.14 Mio (Previous Year: Rs. 235.59 Mio) is interest inventorised on movie/gaming projects during the year.


Schedule 21

93

FINANCIAL SECTION

12. Employee Benefits

The disclosures as required as per the revised AS 15 are as under:

1. Brief description of the Plans

The group provides long-term benefits in the nature of Provident fund & Gratuity to its employees. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through appropriate authorities/insurers. The group’s defined contribution plans are provident fund, social security, employee state insurance and employees’ pension scheme (under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952) since the group has no further obligation beyond making the contributions. The group’s defined benefit plans include gratuity benefit to its employees which is funded through the Life Insurance Corporation of India in case of the parent company and Indiagames Limited and non-funded in case of other subsidiaries, where applicable. The employees of the group are also entitled to leave encashment as per parent/individual company policies.

2. The group has recognised the following amounts in the Profit and Loss Account for the year:

(Rs. in Million)Year ended


March 31, 2009Employers’ contribution to Provident Fund/Social Security *66.08 57.55 Employers’ contribution to Employees State Insurance 0.02 0.67 (* includes amounts inventorised in respect of Ignition London Limited) 66.10 58.22 Included in contribution to Gratuity, Provident and Pension Funds (Refer Schedule-18)

In accordance with the Accounting Standard (AS-15) (Revised 2005), actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:



(a) Discount Rate (per annum) 7.25% - 9% 6.95% - 8%(b) Rate of increase in Compensation Levels 5% - 9% 5% - 9%(c) Rate of Return on Funded Plan Assets 8% 7.5% - 8%

The following tables summarise the components of net benefit expenses recognised in the profit and loss account and funded/non-funded status and amounts recognised in the balance sheet for the gratuity benefit plan:

(Rs. in Million)Year Ended

March 31, 2010 Year Ended

March 31, 2009 Gratuity

(Funded plan)Gratuity (Non- funded plan)

Gratuity (Funded plan)

Gratuity (Non- funded plan)

A. Changes in Defined Benefit Obligation(a) Opening Defined Benefit Obligation 20.27 6.18 12.58 4.91 (b) Interest Cost 1.75 0.65 1.19 0.59 (c) Current Service Cost 4.06 2.11 3.31 2.50 (d) Past Service Cost 0.95 – – –(e) Benefits Paid (1.46) (0.17) (0.94) – (f) Actuarial (Gain)/Loss (1.19) (2.18) 4.13 (1.82)(g) Closing Defined Benefit Obligation 24.37 6.59 20.27 6.18


Schedule 21

94







B. Changes in the Fair value of Plan Assets

(a) Opening Fair Value of Plan Assets 16.03 – 11.69 –

(b) Expected Return on Plan Assets 1.35 – 1.07 –

(c) Contribution during the year by employer 1.73 – 2.24 –

(d) Benefits Paid (1.46) – 1.51 –

(e) Actuarial Loss 0.08 – (0.48) –

(f) Closing Fair Value of Plan Assets 17.72 – 16.03 –

C. Reconciliation of the Present Value of Defined Benefit Obligation and the Fair Value of Assets

(a) Present Value of Funded Obligation as at year end

24.37 6.59 20.27 6.18

(b) Fair Value of Plan Assets as at year end 17.72 – 16.03 –

(c) Funded (Asset)/Liability recognised in the Balance Sheet (Included in Provisions - Schedule 14) 6.65 6.59 4.24 6.18

D. Amount recognised in the Balance Sheet

(a) Present Value of Obligation as at year end 24.37 6.59 20.27 6.18

(b) Fair Value of Plan Assets as at year end 17.72 – 16.03 –

(c) Net (Asset)/Liability recognised as on March 31, 2010

6.65 6.59 4.24 6.18

E. Expenses recognised in the Profit and Loss Account

(a) Current Service Cost 4.06 2.11 3.31 2.50

(b) Past Service Cost 0.95 – – –

(c) Interest Cost 1.75 0.65 1.19 0.59

(d) Expected Return on Plan Assets (1.35) – (1.07) –

(e) Net actuarial Loss (1.27) (2.18) 3.95 (1.82)

Total Expenses recognised in the Profit and Loss Account

4.14 0.57 7.38 1.27

(Included in Contribution to Gratuity, Provident and Pension Funds - Schedule-18)

F. Actual return on Plan Assets

(a) Expected Return on Plan Assets 1.35 – 1.07 –

(b) Actuarial loss on Plan Assets 0.08 – (0.48) –

(c) Actual Return on Plan Assets 1.43 – 0.59 –


Schedule 21

95

FINANCIAL SECTION







G. Percentage of each Category of Plan Assets to total Fair Value of Plan Assets as at March 31, 2010

Insurer Managed Funds 100% NIL 100% NIL

H. Experience Adjustment

On Plan Liabilities (1.53) (2.13) (1.44) –

On Plan Assets 0.08 – (1.02) –

I. Expected Employers contribution for the next year 3.01 NA 2.69 NIL

J. The liability for leave encashment (non-funded) as at year end is Rs. 29.71 Mio (Previous Year: Rs. 19.58 Mio)

13. Share Application money includes Rs. 1,200.00 million given to Unilazer Media Limited (UML) in view of the proposed investment in the UML. Subsequent to the balance sheet date, the Company has received refund of the said amount from Unilazer Media Limited and invested an equivalent amount in Unilazer Holdings Limited, a promoter group Company which will be the ultimate holding company of the Business News initiative of the group. Subsequent to the Balance Sheet date, Unilazer Holdings Limited has refunded Rs. 800 million out of the above. The moneys advanced will be converted to equity shares when deemed fit by the Board of the respective companies.

14. Income from Shared services are recovery of expenses incurred on behalf of related companies in the previous year, which include personnel and administrative expenses in accordance with the service agreements entered into with the related companies.

15. (a) The group is in the production and distribution of movies and games content which is a significant part of its consolidated revenues. In view of the worldwide economic recession and on account of onerous nature of contracts in respect of certain movies/games wherein there is a probable loss on account of additional costs to be incurred by the group under such contracts in the nature of additional print, logistics and marketing costs for movies and price protection for games, the group had made a contingency provision of Rs. 421 Mio in respect of two subsidiaries UTV Communications (USA) LLC and Ignition Entertainment Limited to meet the conditions under the onerous contracts in the previous year.

The group expected that the provision will be utilised as and when such additional spends contemplated under the onerous contracts were made in the subsequent years.

Disclosure of movement in provision and its usage as required by AS-29 is as given below:

(Rs. in Million)



March 31, 2009

(a) Carrying amount at the beginning of the year 421.00 –

(b) Additional provisions made during the year – 421.00

(c) Amounts used during the year (287.47) –

(d) Unused amounts reversed during the year (83.53) –

(e) The carrying amount at the end of the year 50.00 421.00


Schedule 21

96


Schedule 21

(b) Genx Entertainment Limited, a step down subsidiary of the Company, has, in earlier years, made a provision for probable liability arising out of pending dispute with Custom Authorities on applicability of duty on licence fees. The timing of the outflow with regard to the said matter depends on the exhaustion of remedies available to the subsidiary under the law and hence the subsidiary is not able to ascertain the timing of the outflow.

(Rs. in Million)Disclosure of movement in provision as required by AS-29 Year ended


March 31, 2009(a) Carrying amount at the beginning of the year 25.00 25.00

(b) Additional provisions made during year – –

(c) Amounts used during the year – –

(d) Unused amounts reversed during the year – –

(e) Carrying amount at the end of the year 25.00 25.00

16. As required by Companies Act, 1956 and Listing Agreement for Debentures, a transfer of Rs. 200 Mio has been made to Debenture Redemption Reserve from the profits earned during the year.

17. The previous year’s figures have been regrouped, wherever considered necessary and are not comparable with the current year amounts as the current year’s figure include the impact of merger of UTV Motion Pictures (Mauritius) Limited and UMP Plc. Previous years’ figures have not been reinstated to reflect the impact of the restrospective merger.

For and on behalf of the Board of Directors




Signatures to Schedules 1 to 21 which form an integral part of the Consolidated Financial Statements.

97

FINANCIAL SECTION

1. We have audited the attached Balance Sheet of UTV Software Communications Limited (the “Company”) as at March 31, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express 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 Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

(a) Without qualifying our report, we draw attention to Note 23 of Schedule 21 of the financial statements stating that pursuant to the Scheme of Arrangement sanctioned by the Hon’ble High Court of Judicature at Bombay, the Company has transferred an amount of Rs. 7,500 million from Securities Premium Account to Business Restructuring Reserve Account. The Board of Directors have approved the utilization of Rs. 4,897.47 million during the year out of Business Restructuring Reserve to write down certain assets (fixed assets, inventories, receivables and advances), shares to be issued to the minority shareholders of the amalgamating company in consideration of the amalgamation and the expenses of amalgamation. Had the Scheme of Arrangement not prescribed the treatment mentioned above, an amount of Rs. 4,577.21 million would have been debited to Profit and Loss Account for the year and profit for the year would have been lower by an equivalent amount, Securities Premium Account would have been higher by Rs. 7,500 million, and General Reserve would have been lower by Rs. 1,102.53 million.

(b) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(c) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(d) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(f) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2010;

(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.



To the Members of UTV Software Communications Limited

Auditors’ Report

98

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

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

2. (a) The inventory of raw stock of tapes and films has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. 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.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except dues in respect of sales-tax, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable, with the appropriate authorities. The extent of the arrears of statutory dues outstanding as at March 31, 2010, for a period of more than six months from the date they became payable are as follows:

Name of the statute Nature of dues Amount (Rs. in Million)

Period to which the amount relates

Due date Date of Payment

Maharashtra Value Added Tax Act, 2002

Sales Tax 96.96 April 2005 to March 2010

April 2005 to March 2010

–

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

10. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

Referred to in paragraph 3 of the Auditors’ Report of even date to the members of UTV Software Communications Limited on the financial statements for the year ended March 31, 2010

Annexure to Auditors’ Report

99

FINANCIAL SECTION

Referred to in paragraph 3 of the Auditors’ Report of even date to the members of UTV Software Communications Limited on the financial statements for the year ended March 31, 2010 (Contd.)

Annexure to Auditors’ Report

11. 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 holders as at the balance sheet date.

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

13. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in Shares, Securities, Debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

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

19. The Company has created security or charge in respect of debentures issued and outstanding at the year-end.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.



100


Balance Sheet

(Rs. in Million)

Schedule No. As at March 31, 2010 As at March 31, 2009

SOURCES OF FUNDSShareholders’ Funds Share Capital ................................................................... 1 406.32 341.95 Advance Against Warrants ..................................... 2 – 390.11 Reserves and Surplus ................................................ 3 9,537.37 9,943.69 9,832.93 10,564.99 Loan Funds Secured Loans ............................................................... 4 3,893.41 1,816.50 Unsecured Loans ......................................................... 5 4,000.00 1,650.00 Deferred Tax Liabilities 264.31 6.54 (Refer Note 8 (a) of Sch.21)TOTAL ......................................................................................... 18,101.41 14,038.03

APPLICATION OF FUNDSFixed Assets ............................................................................. 6 Gross Block ..................................................................... 279.40 313.02 Less: Accumulated Depreciation ........................ 74.52 74.77 Net Block .......................................................................... 204.88 238.25 Capital Work In Progress ......................................... – 204.88 0.18 238.43 Investments .............................................................................. 7 5,526.85 4,826.70 Deferred Tax Assets ........................................................... 514.31 67.84 (Refer Note 8 (a) of Sch.21)Current Assets, Loans and Advances Inventories ....................................................................... 8 4,317.12 1,527.40 Sundry Debtors ............................................................. 9 366.06 551.81 Cash and Bank Balances ......................................... 10 345.01 637.62 Other Current Assets ................................................. 11 2.94 1.60 Loans and Advances .................................................. 12 7,591.56 7,390.43

12,622.69 10,108.86 Less: Current Liabilities and Provisions Current Liabilities ...................................................... 13 750.85 1,191.55 Provisions ...................................................................... 14 16.47 12.25

767.32 1,203.80 Net Current Assets............................................................... 11,855.37 8,905.06 TOTAL ........................................................................................... 18,101.41 14,038.03

NOTES TO THE FINANCIAL STATEMENTS 21

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




Schedules referred to above and notes attached thereto form an integral part of the Balance Sheet.

101

FINANCIAL SECTION


Profit and Loss Account

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




Schedules referred to above and notes attached thereto form an integral part of the Profit and Loss Account

(Rs. in Million)Schedule

No.Year Ended March 31,

2010Year Ended March 31,

2009INCOME Sales & Services (Net) .................................................................................... 15 3,265.20 2,511.87 Other Income .................................................................................................... 16 91.37 362.65

3,356.57 2,874.52 EXPENDITURE Direct Cost ......................................................................................................... 17 2,350.09 2,395.80 Staff Cost ........................................................................................................... 18 209.11 207.51 Other Expenses ............................................................................................... 19 225.39 154.38

2,784.59 2,757.69

PROFIT BEFORE INTEREST, DEPRECIATION AND TAX .......................... 571.98 116.83 Less: Interest & Finance Charges (Net) .............................................................. 20 165.34 (283.38)

PROFIT BEFORE DEPRECIATION AND TAX ................................................. 406.64 400.21 Less: Depreciation ..................................................................................................... 6 19.06 29.11

PROFIT BEFORE TAX & EXCEPTIONAL ITEM .............................................. 387.58 371.10

Exceptional ItemWrite-offs in accordance with Scheme ..............................................................[Refer Note 23 (b) of Sch.21]

(4,577.21)

Transfer from Business Restructuring Reserve account .............................. 4,577.21 –

PROFIT BEFORE TAX ............................................................................................. 387.58 371.10 Less: Provision for Taxation – Current ............................................................................................................ 62.52 42.34 [Refer Note 8 (b) of Sch.21] (Includes Wealth Tax Rs. 1.00 Mio, Previous Year: Rs. 0.86 Mio) (included reversal pertaining to previous year) – Mat Credit (Entitlement)/Utilisation ...................................................... (71.46) 23.54 – Fringe Benefit Tax ....................................................................................... – 5.01 – Deferred Tax ................................................................................................. (191.99) (200.93) 42.03 112.92

PROFIT AFTER TAX ................................................................................................ 588.51 258.18 Balance Profit brought forward ............................................................................. 1,004.09 745.91 NET PROFIT AVAILABLE FOR APPROPRIATION ........................................ 1,592.60 1,004.09

APPROPRIATIONSa) Transfer to Debenture Redemption Reserve ........................................ (Refer Note 28 of Sch.21)

200.00 –

b) Balance Carried To Balance Sheet ............................................................ 1,392.60 1,004.09 1,592.60 1,004.09

Earnings Per Share of Rs. 10 each [Refer Note 1 (n) & 18 (i) of Sch.21]Basic ........................................................................................................................... 14.48 7.78 Diluted ........................................................................................................................... 14.43 7.78

NOTES TO THE FINANCIAL STATEMENTS 21

102


Cash Flow Statement

(Rs. in Million)


A CASH FLOW FROM OPERATING ACTIVITIES:Profit Before Tax........................................................................................................................... 387.58 371.10

Adjustments for:Depreciation ................................................................................................................................... 19.06 29.11 Interest Expenses/Discount Written off .......................................................................... 348.47 142.91 Interest Income ............................................................................................................................. (183.12) (426.29)Profit on Sale of Fixed Assets/Investment (Net) ......................................................... (27.27) (63.63)Assets Written off ....................................................................................................................... 12.90 –Bad Debts Written off .............................................................................................................. 10.03 –Amortisation of Movie Copyrights ..................................................................................... 5.88 6.65 Provision for Doubtful Debts ................................................................................................. 14.52 13.41 Irrecoverable loans & advances written off/Provisionfor Doubtful Advances ..............................................................................................................

14.60 4.08

Provision no longer required written back ..................................................................... (15.29) (20.00)Advance from Customer written back ............................................................................. – (56.71)Unrealised Foreign Exchange (Gain)/Loss ..................................................................... 0.22 (5.24)Provision for Employee Retirement Benefits ............................................................... 3.23 8.17 Dividend Income .......................................................................................................................... (0.43) (2.67)Advance tax/TDS of earlier years written off ................................................................ 1.86 5.38 Operating Profit Before Working Capital Changes .............................................. 592.24 6.27

Adjustments for Changes in Working Capital:

(Increase)/Decrease in Sundry Debtors ................................................................ 334.65 431.58 (Increase)/Decrease in Other Receivables .......................................................... 118.40 (4,143.13) (Increase)/Decrease in Inventories .......................................................................... (1,890.87) (1,228.88) (Decrease)/Increase in Trade and Other Payables ......................................... (356.64) (146.51)

Cash Generated by/(Used) In Operations ................................................................. (1,202.22) (5,080.67)

Taxes Paid (including Tax Deducted at Source) ......................................................... (400.48) (206.05)

Net Cash Generated by/(Used) in Operating Activities (A) ........................... (1,602.70) (5,286.72)

B CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets ........................................................................................................ (6.62) (32.06)Proceeds from Sale of Fixed Assets ................................................................................. 0.29 6.47 Proceeds from Sale of Investments .................................................................................. 10,301.31 21,951.71 Investment in Subsidiaries/Mutual Funds ...................................................................... (11,138.28) (25,905.38)Share Application Money to subsidiaries/related companies ............................ (1,628.51) (738.99)Advances to Related Companies ........................................................................................ 29.78 1,520.29 Interest Received ......................................................................................................................... 6.95 11.20 Dividend Received ...................................................................................................................... 0.43 2.67

Net Cash used in Investing Activities (B) ................................................................... (2,434.65) (3,184.09)

103

FINANCIAL SECTION

as at March 31, 2010 (Contd.)

Cash Flow Statement

(Rs. in Million)


C CASH FLOW FROM FINANCING ACTIVITIES:Issue of Equity Shares ............................................................................................................. – 8,050.53 Share Issue Expenses ............................................................................................................... (31.60) (160.02)Advance warrant money received including Premium ........................................... – 390.11 Proceeds from Long Term Borrowings – Receipts ............................................................................................................................ 1,169.27 296.13 – Payments ........................................................................................................................... (315.24) (1,176.51)Proceeds from Short term Borrowings – Receipts .............................................................................................................................. 2,350.00 1,650.00 – Payment ............................................................................................................................. (187.50) (15.50)Proceeds from Cash Credit (Net) ........................................................................................ 1,410.38 264.44 Interest Capitalised ..................................................................................................................... (317.29) (37.23)Interest Paid/Discount on Commercial Paper .............................................................. (351.68) (136.87)Dividend Paid ................................................................................................................................. (0.01) (34.17)Distribution Tax Paid .................................................................................................................. – (5.81)Net Cash Generated From Financing Activities (C) ............................................. 3,726.33 9,085.10

D Net Increase/(Decrease) in Cash and Cash equivalents (A+B+C) ............ (311.02) 614.29 Opening Cash and Cash Equivalents 637.62 23.33 Add: Cash Taken Over From UMP Plc and

UTV Motion Pictures (Mauritius) Limited ........................................................... 18.41 –Closing Cash and Cash Equivalents ............................................................................. 345.01 637.62 Cash and Cash Equivalents Comprise Cash, Cheques & Drafts (in hand) ........................................................................... 33.62 8.81 Balance with Scheduled Banks ................................................................................. 311.39 628.81

345.01 637.62

Notes:1. The above Cash Flow Statement has been prepared under the Indirect Method set out in Accounting Standard- 3 issued

by the Institute of Chartered Accountants of India.2. Figures in brackets indicate cash outgo.3. Cash and cash equivalents include unclaimed dividend Rs. 0.08 Mio (PY Rs. 0.09 Mio) (Refer Sch.13) which are not

available for use by the Company.

This is the Cash flow statement referred to in our report of even date.

For and on behalf of the Board of Directors




104

forming part of the Financial Statements

Schedules

(Rs. in Million)


1 SHARE CAPITAL

AUTHORISED

70,000,000 Equity Shares of Rs. 10/- each ........................................................ 700.00 450.00

(Previous Year 45,000,000 Equity Shares of Rs. 10/- each)

(Refer Note 4 (i) of Sch.21)

ISSUED, SUBSCRIBED & PAID UP

4,06,32,250 Equity Shares of Rs. 10/- each fully paid .................................. 406.32 341.95

(Previous Year 34,195,468 Equity Shares of Rs. 10/- each fully paid)

(Refer Note 23 b(ii) of Sch.21)

TOTAL .................................................................................................................................... 406.32 341.95

Notes:

i) 6,705,882 Equity Shares of Rs. 10/- each were issued without consideration in cash as Bonus Shares by capitalisation of Share Premium in the F.Y. 1995-96 to the then existing Shareholders of the Company.

ii) 4,664,824 Equity Shares of Rs. 5/- each (2,332,412 Equity Shares of Rs. 10/- each) were issued without consideration in cash to various shareholders under a share swap arrangement in the F.Y. 2000-01 as part of consolidation exercise carried out in the said year.

iii) 182,932 Equity Shares of Rs. 5/- each (91,466 Equity Shares of Rs. 10/- each) were issued to shareholders of Western Outdoor Media Technologies Limited as per the Scheme of Arrangement for demerger of its studio division to the Company in F.Y. 2003-04.

iv) During the year, the Company has issued 6,436,782 equity shares of Rs. 10 each, for consideration other than cash, to the minority shareholders of UMP Plc pursuant to the Scheme of Arrangement between the Company and its subsidiaries (Refer Note 23 of Sch.21).

v) Out of the above issued share capital, the Holding Company - The Walt Disney Company (Southeast Asia) Pte. Limited holds 20,497,994 shares as on the Balance Sheet date representing 50.45% of the issued share capital.

2 ADVANCE AGAINST WARRANTS

As per Last Balance Sheet............................................................................................ 390.11 –

Advance warrant money received including Premium ..................................................................................................................................

– 390.11

Less: Transfer to Capital Reserve Account (Refer Note 4 (iv) of Sch.21) .. (390.11) –

TOTAL .................................................................................................................................... – 390.11

105

FINANCIAL SECTION

forming part of the Financial Statements (Contd.)

Schedules

(Rs. in Million)


3 RESERVES AND SURPLUS

SECURITIES PREMIUM ACCOUNT

As per last Balance Sheet ................................................................................. 8,781.07 984.08

Add: Premium on shares issued on a preferential basis ................ 7,957.01

8,781.07 8,941.09

Less: Transferred to Business Restructuring Reserve ..................... 7,500.00 –

Less: Shares/Debentures Issue Expenses .............................................. 31.60 160.02

1,249.47 8,781.07

CAPITAL RESERVE

Reserve arising on account of shares isssued by erstwhile UMP Plc. [Refer Note 23 (a) (ii) of Sch.21] ......................... 2,602.97 –

Less: Transferred to General Reserve as per Scheme ..................... (2,602.97) –

Arising from forfeiture of advance against Share warrants ........... 390.11 –

390.11 –

BUSINESS RESTRUCTURING RESERVE

Amount transferred from Securities Premium as per Scheme.... 7,500.00 –

Less: Transferred to Profit and Loss account(Refer Note 23 of Sch.21) .................................................................................. 4,577.21 –

Less: Utilisation for issue of shares & scheme expenses in accordance with Scheme (Refer Note 23 of Sch.21) ....................... 320.26 –

Less: Transferred to General Reserve as per Scheme 1,102.53 –

1,500.00 –

GENERAL RESERVE

As per last Balance Sheet ................................................................................ 47.77 47.77

Add: Transferred from Capital Reserve as per Scheme ................. 2,602.97 –

Add: Transferred from Business Restructuring Reserve as per Scheme ....................................................................................................... 1,102.53

3,753.27 47.77

DEBENTURE REDEMPTION RESERVE 200.00 –

PROFIT & LOSS ACCOUNT

As per annexed Profit and Loss Account ................................................. 1,392.60 1,004.09

Addition on account of merger of UTV Motion Pictures (Mauritius) Limited & UMP Plc into the Company .............................. 1,051.92 –

TOTAL ........................................................................................................................ 9,537.37 9,832.93

106

(Rs. in Million)

Notes As at March 31, 2010 As at March 31, 2009

4 SECURED LOANS

Cash Credit From Banks .................................................. 1 2,487.96 1,077.58

Working Capital Demand Loan From Banks .................... 1 195.00 382.50

Term Loan From Banks .................................................... 1 210.45 355.45

Non Convertible Debentures ........................................... 2 1,000.00 –

Vehicle Loan From Banks ................................................ – 0.97

TOTAL .............................................................................. 3,893.41 1,816.50

Notes:1. Cash Credit, Working Capital Demand Loans and Term Loans from banks are secured by: a) First charge on freehold land, movable plant and machinery and other movable fixed assets (excluding vehicles) and

current assets of the Company (save and except fixed assets and current assets of the Company charged in favour of EXIM Bank of India for specific film financing to the extent of Rs. 450 million);

b) Personal guarantee of a director of the Company; c) Pledge of 350,000 equity shares held in UTV Global Broadcasting Limited, its subsidiary & lien of fixed deposit of

Rs. 250 million; d) First charge on all fixed assets and current assets of subsidiaries – IG Interactive Entertainment Limited and UTV

Communications (USA) LLC; e) First charge on all fixed assets and current assets of Ignition Entertainment Limited & its subsidiaries except fixed

assets and current assets charged by them in favor of other lenders; f) Corporate Guarantee given by UTV Communications (USA) LLC & IG Interactive Entertainment Limited.2. Non Convertible Debentures are secured by charge against freehold land, entire current assets (save and except current

assets of the Company charged in favour of EXIM Bank of India for specific film financing to the extent of Rs. 450 million), personal guarantee of a director of the Company and corporate guarantees given by UTV Communications (USA) LLC & IG Interactive Entertainment Limited. The Debentures will be redeemable in 16 equal quarterly instalments starting after one year moratorium from the date of issue.

3. Of the above, amount repayable within one year are as follows: – Working Capital Demand Loans: Rs. 195.00 Mio. – Term Loans: Rs. 20.56 Mio. – Non Convetible Debentures Rs. 125.00 Mio.

5 UNSECURED LOANS(Short-term)Commercial Paper

– From Banks ............................................................................. 2,500.00 650.00

– From Others ........................................................................... 1,500.00 1,000.00

TOTAL ........................................................................................ 4,000.00 1,650.00

Notes:1. Amount repayable within one year: Rs. 4,000 Million2. Maximum amount outstanding during the year: Rs. 4,000 Million


Schedules

107

FINANCIAL SECTION

6.

FIX

ED

AS

SE

TS

(R

efer

No

te 1

(b),

1(j

), 1

(k)

& 1

(l)

of

Sch

.21)

(R

s. in

Mill

ion)

CO

ST

DE

PR

EC

IAT

ION

/ A

MO

RT

ISA

TIO

NN

ET

BLO

CK

Par

ticul

ars

Ope

ning

As

at

Apr

il 1,

20

09

Add

ition

sD

edu-

ctio

nsR

efer

Not

e (c

) bel

ow

As

atM

arch

31,

20

10(A

)

Ope

ning

As

at

Apr

il 1,

20

09

For

the

Per

iod

Ded

u-ct

ions

Ref

er N

ote

(c) b

elow

As

atM

arch

31,

20

10(B

)

As

atM

arch

31,

20

10(A

-B)

As

atM

arch

31,

20

09

Inta

ngib

le A

sset

sC

ompu

ter

Sof

twar

e 1

3.25

0

.11

1.6

5 1

1.71

7

.46

1.3

5 1

.62

7.1

9 4

.52

5.7

9

Tan

gib

le A

sset

sLe

aseh

old

Impr

ovem

ents

1

1.28

3

.23

4.3

5 1

0.16

4

.71

3.6

3 2

.82

5.5

2 4

.64

6.5

7 B

uild

ing

(Ref

er N

ote

a be

low

) 1

41.6

9 –

– 1

41.6

9 4

.25

2.3

1 –

6.5

6 1

35.1

3 1

37.4

4 Fr

eeho

ld L

and

– 0

.70

– 0

.70

– –

– –

0.7

0 –

Pla

nt &

Mac

hine

ry

54.

23

0.1

1 1

8.17

3

6.17

3

3.07

3

.02

9.3

7 2

6.72

9

.45

21.

16

Furn

iture

& F

ixtu

res

33.

70

0.4

0 9

.82

24.

28

2.8

4 1

.98

1.6

1 3

.21

21.

07

30.

86

Com

pute

rs

31.

51

1.4

7 3

.14

29.

84

15.

40

5.0

1 2

.52

17.

89

11.

95

16.

11

Off

ice

Equ

ipm

ents

1

4.01

0

.91

1.4

3 1

3.49

1

.93

0.6

6 0

.25

2.3

4 1

1.15

1

2.08

M

otor

Veh

icle

s 1

3.35

–

1.9

9 1

1.36

5

.11

1.1

0 1

.12

5.0

9 6

.27

8.2

4 (R

efer

Not

e b

belo

w)

Gra

nd T

ota

l 3

13.0

2 6

.93

40.

55

279

.40

74.

77

19.

06

19.

31

74.

52

204

.88

238

.25

Cap

ital W

ork

in P

rogr

ess,

at

cos

t (in

clud

ing

Cap

ital

Adv

ance

s)

– 0

.18

To

tal

204

.88

238

.43

Pre

viou

s Ye

ar

351

.60

48.

88

87.

46

313

.02

78.

89

29.

11

33.

23

74.

77

238

.25

272

.71

No

tes:

a)

Bui

ldin

g is

hyp

othe

cate

d to

Sta

ndar

d C

hart

ered

Ban

k fo

r th

e te

rm lo

an t

aken

for

the

acq

uisi

tion

of t

he s

aid

build

ing.

b)

The

Net

Boo

k va

lue

of M

otor

Veh

icle

s in

clud

es v

alue

of

vehi

cles

acq

uire

d un

der

loan

fro

m b

anks

am

ount

ing

to R

s. N

il [P

revi

ous

Yea

r –

Rs.

0.9

7 M

illio

n].

c)

Rs.

7.3

0 M

illio

n ha

s be

en w

ritte

n of

f (n

et o

ff a

ccum

ulat

ed d

epre

ciat

ion)

as

per

sche

me

of A

rran

gem

ent.

(Ref

er n

ote

23 b

(i) o

f S

ch.2

1)


Schedules

108

7. INVESTMENTS(Rs. in Million)

Nos. as atMarch 31,

2010

Nos. as atMarch 31,

2009

Face Value

As atMarch 31,

2010

As atMarch 31,

2009Long Term, Non Trade (fully paid)Equity Shares of Companiesa) Subsidiary Companies (Unquoted) (i) UTV Communications (USA) LLC ........... 5,000 5,000 10 USD 2.27 2.27 (ii) IG Interactive Entertainment Limited ..... 10,000 10,000 1 GBP 0.85 0.85 (iii) UTV Motion Pictures (Mauritius) Limited [Refer Note 23 of Sch.21]

200,000 0.05 USD – 0.46

(iv) UTV New Media Limited ........................ 4,500,000 4,500,000 Rs. 10 45.00 45.00 (v) UTV TV Content Limited ......................... 50,000 50,000 Rs. 10 0.50 0.50 (vi) First Future Agri & Developers Limited .. 16,000,000 16,000,000 Rs. 10 160.00 160.00 (vii) UTV Global Broadcasting Limited ......... [Refer Note 5 (i) of Sch.21]

1,700,000 1,500,000 Rs. 10 2,729.70 2,400.00

(viii) UTV Games Limited ................................ [Refer Note 5 (iii) of Sch.21]

12,000,000 8,000,000 1 USD 570.27 381.15

(IX) Indiagames Limited ............................... [Refer Note 5 (ii) of Sch.21]

659,415 19,429 Rs. 10 259.33 0.14

b) Subsidiary Companies (Quoted) UMP PLC [Refer Note 23 of Sch.21) ............... – 80,000,000 0.05 USD – 164.40 c) Joint Venture Companies (Unquoted) Smriti Irani Television Limited ......................... 25,000 25,000 Rs. 10 0.25 0.25 d) Others (Unquoted) (i) United Teleshopping and Marketing .....

Company Limited 600,000 600,000 Rs. 10 – –

(ii) Homland Network Corporation .............. 352,000 352,000 0.001 USD – * – *

Preference Shares of Companiesa) Subsidiary Companies (Unquoted) (i) IG Interactive Entertainment Limited ..... 17,123,895 17,123,895 1 GBP 1,387.67 1,387.67 (ii) UTV Games Limited ................................ [Refer Note 5 (iii) of Sch.21]

3,650,000 – 1 USD 170.50 –

b) Others (Unquoted) Homland Network Corporation ....................... 125,000 125,000 0.001 USD 0.01 0.01

Long Term, Trade (fully paid)Equity Shares of CompaniesQuoted: Radaan Mediaworks India Limited ................. 62,500 62,500 Rs. 2 0.50 0.50

Current Investment, Non Trade (fully paid)Mutual/Liquid Funds (unquoted)(i) Principal Cash Management Fund Liquid Option – 13,828,943 Rs. 10 – 190.00 (ii) LIC Mutual Fund Liquid Plus Fund - Growth ... – 7,962,122 Rs. 10 – 93.50 (iii) SBI Mutual Fund Magnum Instacash Fund .... 3,915,082 – Rs. 10 80.00 – (iv) Taurus Liquid Fund-Super Institutional - Growth 119,834 – Rs. 1000 120.00 –

TOTAL ..................................................................... 5,526.85 4,826.70

* Amount less than Rs. 10,000(Rs. in Million)

Cost Market value Cost Market value March 31,

2010March 31,

2010March 31,

2009March 31,

2009Aggregate Value of Quoted Investments ............... 0.50 0.19 164.90 3,668.58 Aggregate Value of Unquoted Investments ........... 5,526.35 – 4,661.80 –

Total ........................................................................ 5,526.85 4,826.70 –


Schedules

109

FINANCIAL SECTION

7. INVESTMENTS (Contd.)

Name of the Fund

March-10Purchase of

UnitsNo. of units

March-10Redemption of

UnitsNo. of units

March-09Purchase of

UnitsNo. of units

March-09Redemption of

UnitsNo. of units

IDFC Liquidity Manager Fund ................................................................................ – – 3,049,618 3,049,618 IDFC Cash Fund - Super Inst Plan C - Gr ............................................................... – – 29,361,082 29,361,082 IDFC Money Manager Fund-Treasury Plan-Super Inst Plan C- Growth .............. 27,857,695 27,857,695 33,601,469 33,601,469 IDFC Money Manager Fund - Treasury Plan - Inst Plan B - Growth .................... 13,967,932 13,967,932 3,670,398 3,670,398 Religare Ultra Short Term Fund - Institu. Growth ................................................. – – 53,797,185 53,797,185 Religare India FMP 1 month Sr IX - Growth .......................................................... – – 15,000,000 15,000,000 Religare India Monthly Interval Fund Plan A ......................................................... – – 55,000,000 55,000,000 Religare India Liquid Fund ..................................................................................... – – 4,384,849 4,384,849 HDFC CMF-Treasury Advantage Plan - Wholesale Gr ......................................... 8,301,899 8,301,899 28,096,833 28,096,833 HDFC Liquid Fund-Premium Plan - ....................................................................... 9,053,862 9,053,862 – – Birla Sun Life Savings Fund ................................................................................... 22,169,204 22,169,204 52,103,154 52,103,154 Birla Sun Life Short Term Fund - Inst. Gr .............................................................. – – 19,867,287 19,867,287 Birla Sun Life CASH Plus Instl. Gr.......................................................................... – – 41,100,489 41,100,489 LICMF Income Plus Fund - Gr Plan ....................................................................... – – 110,165,592 110,165,592 LICMF Liquid Fund- Gr Plan ................................................................................... 5,505,747 5,505,747 203,674,194 203,674,194 LICMF Income Plus Fund - Growth Plan .............................................................. 34,712,053 34,712,053 – – DWS Money Plus Fund- Instl. Plan Gr. ................................................................. – – 44,087,434 44,087,434 Templeton India Short Bond Fund Super Instl. Plan ............................................ – – 48,150,538 48,150,538 Templeton India Treasury Management Account ............................................... – – 401,364 401,364 Templeton Floating Rate Income Fund S.T.P Intl Op .......................................... – – 19,914,175 19,914,175 Tata Dynamic Bond Fund Option B ...................................................................... – – 112,900,798 112,900,798 Tata Liquid Super High Inv. Fund Appr ................................................................. – – 31,600 31,600 Tata Floater Fund - Growth .................................................................................... 35,960,864 35,960,864 17,886,017 17,886,017 TATA Treasury Manager SHIP Growth ................................................................. 12,592 12,592 – – Reliance Liquid Fund - Treasury Plan - Intl Opn - Gr Op - Gr pl ............................ 43,647,352 43,647,352 2,416,710 2,416,710 Reliance Interval Fund ............................................................................................ – – 63,214,550 63,214,550 Reliance Liquidity Fund - Gr Option ...................................................................... 44,658,753 44,658,753 100,383,659 100,383,659 Reliance Medium Term Fund Retail Plan - Gr Plan - Gr Opt ................................ 11,107,462 11,107,462 59,100,885 59,100,885 Reliance Money Manager Fund Institutional Option - Gr Plan ............................ 950,236 950,236 202,744 202,744 KOTAK Flexi Debt Fund - Daily Divid ..................................................................... – – 99,527,246 99,793,282 Kotak Liquid (Institutional Premium) Gr ................................................................ – – 2,885,204 2,885,204 Kotak Floater Long Term - Gr ................................................................................ 36,958,241 36,958,241 29,157,991 29,157,991 UTI Money Market Fund - Gr Plan ......................................................................... – – 21,273,375 21,273,375 UTI Liquid Cash Plan Intl- Gr Option...................................................................... 170,917 170,917 211,977 211,977 UTI Treasury Advantage Fund - Intl Plan (Growth Option) ................................... 209,704 209,704 86,157 86,157 HSBC Floating Rate Fund- Long Term Plan - Ints Opn - Gr ................................. – – 19,024,717 19,024,717 HSBC Ultra Short Term Bond Fund- Ints.Plus - Gr ............................................... – – 21,300,190 21,300,190 Fidelity Cash Fund (Institutional) - Growth ............................................................ 12,409,198 12,409,198 3,866,544 3,866,544 Fidelity Ultra Short Term Debt Fund (Super Instl) Growth ................................... – – 16,078,319 16,078,319 Fidelity Cash Fund (Institutional) - Growth ........................................................... 13,160,088 13,160,088 – – SBI-SHF - Ultra Short Term Fund - Inst Plan - Growth .......................................... 4,260,795 4,260,795 – – Sundaram -BNP Money Fund-Super Inst. - Growth ............................................. 6,772,677 6,772,677 – – Sundaram Ultra ST Fund Super Inst. Div Rein Daily ............................................ 5,001,162 5,004,935 – – ICICI Prudential Flexible Income Plan Premium - Daily Dividend ........................ 47,288,031 47,319,990 – – ICICI Prudential Institutional Plan - Super Institutional Growth ............................ 75,113,073 75,113,073 – – ICICI Prudential Flexible Income Plan Premiun - Growth ..................................... 29,899,997 29,899,997 – – Principal Cash Management Fund - Liquid Option Inst,. Prem Plan - Growth (PNB) 31,801,237 31,801,237 – – Taurus Short Term Bond Fund-Super Insti Growth Plan ..................................... 24,808,179 24,808,179 – – DSP Blackrock Money Manager Fund-Institutional Plan - Growth ...................... 120,942 120,942 – – Principal Ultra Short Term Fund - Growth Plan Pinicipal Liquid Plus Fund ......... 43,210,357 43,210,357 – –

Total....................................................................................................................... 589,090,249 589,125,981 1,334,974,343 1,335,240,379


Schedules

110

(Rs. in Million)


8 INVENTORIES (Refer Note 1(d) of Sch.21)(As certified by the Management, atlower of cost or net realisable value)Raw Stock- Tapes and Films ............................................. 0.23 0.46 Unamortised cost of Completed/Acquired– Animation Programmes ................................................ – 62.77 – Movie Copyrights .......................................................... 1,050.03 105.04 Unutilised Free Commercial Time .................................... 52.42 54.54 Projects in Progress .......................................................... 9.88 13.96 Movies Under Production ................................................ 3,204.56 1,290.63

TOTAL ............................................................................... 4,317.12 1,527.40

9 SUNDRY DEBTORS (Unsecured & considered good, unless otherwise stated)(Refer Note 6 (i) of Sch.21)i. Over Six months Billed – considered good ............................................... 25.12 63.72 – considered doubtful .......................................... 43.51 29.79

68.63 93.51 Less: Provision for doubtful debts ................................... 43.51 25.12 29.79 63.72

ii. Other Debts - considered good Billed .......................................................................... 338.57 487.90 Unbilled ..................................................................... 2.37 340.94 0.19 488.09

TOTAL ............................................................................... 366.06 551.81

10 CASH AND BANK BALANCESi. Cash and Cheques on hand .......................................... 33.62 8.81 [Includes cheques on hand Rs. 32.55 Million, Previous Year Rs. 8.06 Million]ii. Balance with Scheduled Banks – Current Account ............................................... 57.27 617.84 – Fixed Deposit Account ..................................... 253.98 10.83 – Others ............................................................... 0.14 0.14 TOTAL ........................................................................... 345.01 637.62

11 OTHER CURRENT ASSETSInterest Receivable on Fixed Deposits and Others .......... 2.94 1.60

TOTAL ........................................................................... 2.94 1.60


Schedules

111

FINANCIAL SECTION

(Rs. in Million)


12 LOANS AND ADVANCES(Unsecured & considered good, unless otherwise stated)Advances recoverable in cash or in kind or for value to be received – Advance to UTV Employees Welfare Trust .............. 2.12 2.12 – Advances to Suppliers – considered good .............................................. 162.75 523.77 – considered doubtful ......................................... 62.24 65.74

224.99 589.51 Less: Provision for Doubtful Advances ........................... 62.24 162.75 65.74 523.77 Others ........................................................................... 127.01 197.11 (Includes Rs. 0.07 Mio [Previous Year Rs. 0.07 Mio] due from the directors of the Company, Maximum amount outstanding during the year Rs. 0.74 Mio [Previous Year Rs. 1.28 Mio])MAT Credit Entitlements .................................................. 224.40 11.03 Share Application Money .................................................. 3,009.13 1,380.62 Advances – To Subsidiary Companies (Refer Note 7 of Sch.21) 3,578.77 4,583.79 – To Others .................................................................. 2.97 3,581.74 398.82 4,982.61 Advance Income Tax (net of provision) ............................ 460.65 265.46 [Provision for Tax Current Year Rs. 61.52 Mio (Previous Year Rs. 41.48 Mio)]Other Deposits ................................................................. 23.76 27.71

TOTAL ............................................................................... 7,591.56 7,390.43

13 CURRENT LIABILITIESSundry Creditors for Capital Goods, Materials & Expenses Micro and Small Enterprises

(Refer Note 16 of Sch.21) ......................................... – – Amount Payable to Subsidiaries

(Refer Note 6 (ii) of Sch.21) ...................................... 19.50 512.34 Others........................................................................ 279.46 386.27 Advance from Customers ................................................ 111.76 30.04 Advance Billings ............................................................... 1.33 – Unpaid Dividend* ............................................................. 0.08 0.09 Interest Accrued But Not Due on Loans .......................... 3.94 7.15 Other Liabilities and Accruals .......................................... 334.78 255.66

TOTAL ........................................................................... 750.85 1,191.55

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

14 PROVISIONSProvision for Wealth Tax (net of advances) 1.92 0.92 Provision for Employees Retirement Benefits (net) (Refer note 1(i) & 21 of Sch.21) ........................................ 14.55 11.33

TOTAL 16.47 12.25


Schedules

112


Schedules



March 31, 200915 SALES & SERVICES (NET)

(Refer Note1 (h) of Sch.21)Sales and Service Revenues (net) ..................................... 3,265.20 2,511.87

TOTAL ............................................................................... 3,265.20 2,511.87

16 OTHER INCOMEDividend from Current and Non Trade Investments ........ 0.43 2.67 Advance from Customer Written Back – 56.71 Provision No Longer Required Written Back .................... 15.29 20.00 Income from Shared Services (Refer Note 25 of Sch.21) 44.11 150.61 Miscellaneous Income ...................................................... 3.52 31.18 Profit on Sale of Investments............................................ 28.02 92.81 Gain on Foreign Exchange Fluctuation (Net) .................... – 8.67 TOTAL ............................................................................... 91.37 362.65

17 DIRECT COSTTelecast Fees ................................................................... 421.95 433.08 Cast and Technicians’ Fees and Commission ................. 91.63 252.06 Equipment Hire, Sets, Costumes and Venue Hire ........... 41.85 111.52 Footage Expenses/Other Acquisition Cost ...................... 1,147.90 1,023.48 Consumption of Rawstock of Video Tapes and Films .... 91.31 79.61 Post Production Charges ................................................. 2.68 2.82 Professional Fees ............................................................. 41.45 40.73 Travelling Expenses ......................................................... 9.04 14.35 Advertisement and Publicity ............................................ 433.32 406.87 Amortisation of Movie Copyrights ................................... 5.88 6.65 Miscellaneous Expenses ................................................. 115.50 79.17

2,402.51 2,450.34 Less: Amounts inventorised towards Free Commercial Time ................................................................................. 52.42 54.54

TOTAL ............................................................................... 2,350.09 2,395.80

113

FINANCIAL SECTION


Schedules



March 31, 200918 STAFF COST

Salaries, Wages and Bonus ............................................. 195.86 189.85 Contribution to Gratuity, Provident & Pension Funds ....... 7.79 11.47 Staff Welfare ..................................................................... 5.46 6.19

TOTAL ............................................................................... 209.11 207.51

19 OTHER EXPENSESRent - Premises ................................................................ 26.07 29.56 Repairs and Maintenance– Plant and Machinery ................................................ 0.18 0.18 – Others ....................................................................... 10.49 10.67 7.51 7.69 Professional fees .............................................................. 45.57 14.14 Rates & Taxes ................................................................... 0.49 0.35 Insurance .......................................................................... 3.52 3.74 Electricity Charges ........................................................... 3.91 4.32 Travelling & Conveyance Expenses .................................. 17.43 12.51 Communication & Postage Expenses .............................. 10.96 9.48 Provision for Doubtful Debts ........................................... 14.52 13.41 Bad Debts Written Off ..................................................... 10.03 – Irrecoverable loans and advances written off/Provision for doubtful advances ...................................................... 14.60 1.22 Advertisement & Business Promotion Expenses ............ 10.95 7.23 Loss on Sale of Fixed Assets (Net) .................................. 0.75 28.88 Loss on Foreign Exchange Fluctuation (Net) ................... 13.61 – Directors’ Sitting Fees ...................................................... 0.50 0.44 Fixed Assets Written off .................................................. 12.90 – Miscellaneous Expenses (Refer Note 13 of Sch.21) ....... 28.91 21.41

TOTAL ............................................................................... 225.39 154.38

20 INTEREST & FINANCE CHARGES (Net)Interest on Loan from Banks– Fixed Loans .............................................................. 5.96 71.37 – Others ....................................................................... 185.49 41.02 Interest on Others ............................................................ 0.86 192.31 4.44 116.83 Interest on Non Convertible Debentures ......................... 97.16 – Discount on Commercial Paper amortised ...................... 58.99 26.08 Less: Interest Income:On Advances to Subsidiaries ........................................... 174.83 303.97 On Advances to Related Companies/Fixed Deposits and Others ....................................................................... 8.29 122.32 [Tax Deducted at Source Rs. 0.49 MioPrevious Year - Rs. 2.15 Mio]

TOTAL ............................................................................... 165.34 (283.38)

114

1 Significant Accounting Policies:

a) Basis of Accounting:

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

b) Fixed Assets and Depreciation:

(i) Fixed assets are stated at cost of acquisition less accumulated depreciation. The Company capitalises all costs relating to the acquisition and installation of fixed assets.

(ii) Depreciation is provided based on management estimate of useful lives of the fixed assets, on the straight line method prorata to the period of use or at the rates prescribed in Schedule XIV of the Companies Act, 1956, whichever is higher. The management has estimated the useful life of Plant & Machinery to be 12 years (lower useful life than that prescribed by Schedule XIV of the Companies Act, 1956).

(iii) Fixed Assets individually costing Rs. 5,000 or less are fully depreciated in the year of acquisition.

(iv) Leasehold Improvements are amortised over the period of lease.

c) Investments:

(i) Long term investments (including joint ventures) are stated at cost, except where there is a diminution in value other than temporary, in which case requisite provision is made to write down the carrying value to recognise such decline.

(ii) Current investments are stated at cost or fair value, whichever is lower.

d) Inventories:

(i) The Company amortises 60% of the cost of movie rights acquired or produced by it, on first theatrical release of the movie. The said amortisation pertaining to Domestic Theatrical Rights, International Theatrical Rights, Television Rights, Music Rights, Video Rights and others is made proportionately based on Management estimate of revenues from each of these rights. In case the aforesaid rights are not exploited along with or prior to the first theatrical release, proportionate cost of the said right is carried forward to be written off as and when such right is commercially exploited or at the end of one year from the date of first theatrical release, whichever occurs earlier. Balance 40% is amortised over the balance license period or based on management estimate of future revenue potential, as the case may be.

(ii) Acquired rights pertaining to movies, animation & other content, are amortised on the exploitation of such rights based on the management estimates of revenue potential.

(iii) Projects in progress and Movies under Production are stated at cost. Cost comprises of material cost, cost of services, other expenses and advances paid. Costs get accumulated till the first theatrical release of the movie.

(iv) Pilot episodes are stated at cost. Pilots are written off at the end of 3 years from the year of production of respective pilot, in case the same is not developed into a serial.

(v) Raw Stock, Digital Video Discs/Compact Discs stock and unutilised Free Commercial Time are stated at lower of cost or net realisable value.

(vi) The borrowing cost directly attributable to a movie is capitalised as part of the cost of movie. In case of general borrowings, borrowing cost eligible for capitalisation for movie projects is determined by applying a weighted average capitalisation rate to the expenditure on that movie.

(vii) The Company evaluates the realisable value and/or revenue potential of inventory on an annual basis based on market conditions and future demand and appropriate write down is made in cases where accelerated write down is warranted.

e) Current Taxation:

Provision for Current tax (including Wealth Tax) and Fringe benefit tax has been made in accordance with the Income tax and Wealth tax laws prevailing for the year.

Schedule 21NOTES TO THE FINANCIAL STATEMENTS

115

FINANCIAL SECTION

f) Deferred Taxation:

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

g) Foreign Currency Transactions:

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities as at the Balance sheet date are translated at the rate of exchange prevailing at the date of the Balance sheet. Non-monetary foreign currency items are carried at cost. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and Loss Account. Premium or discount in respect of forward contract is accountted over the period of the contract.

h) Revenue Recognition:

(i) Revenues on commissioned television programmes, animation programmes and dubbing are recognised on delivery. The amount recognised is the predetermined price, the collection of which is reasonably assured.

(ii) Revenues from sale of airtime (net of agency commission) are recognised when the related advertisements or commercials appears before the public, i.e. on telecast.

(iii) Revenues from licensing and distribution of television programmes and movies are recognised in accordance with the licensing and distribution agreement or on physical delivery of the programmes/movies, whichever is later. Home Video sales are recognised as per underlying agreements based on delivery.

(iv) Dividend is recognised when the right to receive the dividend is unconditionally established at the Balance Sheet date.

i) Retirement Benefits:

(i) Long Term Employee Benefits:

In case of Defined Contribution plans, the Company’s contributions to these plans are charged to the Profit and Loss Account as incurred. Liability for Defined Benefit plans is provided on the basis of valuations, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. The obligations are measured as the present value of estimated future cashflows discounted at rates reflecting the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. The expected rate of return of plan assets is taken at the rate of return on Government securities. Plan assets are measured at fair value as at the Balance Sheet date. The liability for leave encashment is provided on the basis of valuation, as at Balance Sheet date, carried out by an independent actuary.

(ii) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised in the Profit and Loss Account in the year in which they arise.

j) Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of a qualifying asset are capitalised as a part of the cost of the asset. Other borrowing costs are recognised as an expense in the year in which they are incurred.

k) Lease:

Finance Leases

Assets acquired under finance lease are recognised as assets with corresponding liabilities in the Balance Sheet at the inception of the lease at amounts equal to lower of the fair value of the leased asset or at the present value of the minimum lease payments. These leased assets are depreciated in line with the Company’s policy on depreciation of fixed assets. The interest is allocated to periods during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Notes to the Financial Statements (Contd.)

Schedule 21

116

Operating Leases

Lease payments for operating leases are recognised as expense on a straight-line basis over the lease term. Initial direct costs are recognised immediately as an expense.

l) Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset 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 is recognised in the Profit & Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

m) Employee Stock Option Schemes (ESOP):

The Company accounts for compensation expense under the Employee Stock Option Schemes using the intrinsic value method as permitted by the Guidance Note on “Accounting for Employee Share-based Payments” issued by the Institute of Chartered Accountants of India. The difference between the market price and the exercise price as at the date of the grant is treated as compensation expense and charged over the vesting period.

n) Earnings Per Share:

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted at the beginning of the period, unless issued at a later date.

o) Provisions and Contingent Liabilities:

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a 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 of outflow of resources is remote, no provision or disclosure is made.

p) Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the periods in which the results are known/materialise.

(Rs. in Million)As at March 31,

2010As at March 31,

2009

2 Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) – 0.30

3 Contingent liabilities not provided for:

Nature Description

(a) Claims against the Company not acknowledged as debts

Notice for Interest claim by a broadcaster during 2000-01 towards delayed payment made by the company in earlier years. The interest claim by the broadcaster is disputed by the Company. 34.40 34.40


Schedule 21

117

FINANCIAL SECTION

(Rs. in Million)As at March 31,

2010As at March 31,

2009

(b) Appeals filed in respect of disputed income tax demands

Income Tax appeal before Commissioner/Deputy Commissioner of Income Tax for the Assessment Years 2000-01/2005-06/2007-08. 10.22 10.22

(c) Bank guarantees/Corporate Guarantees/Outstanding Letter of Credit for which the Company has given counter guarantees

Bank guarantee issued in favour of a broadcaster for accreditation/Counter Guarantees/Corporate Guarantee issued in favour of subsidiaries/associate companies. 2,856.98 593.00

(d) Bank Guarantees issued favoring various Government Authorities

The Brihanmumbai Mahanagarpalika, Mumbai. 0.66 1.39

Asst. Commissioner of Customs. 1.65 2.31 4.36 5.75

(e) Legal cases and claims filed against the Company

Pertains to litigation/disputes with parties. The Company has filed legal cases against the parties and no outflow is foreseen. 36.05 38.36

(f) Value Added Tax (VAT)/Sales Tax Pertains to Value Added Tax/Sales tax levied on sale/lease of copyrights under Maharashtra VAT Act, 2002 w.e.f April 1, 2005. This is disputed by the whole film fraternity as there is no ground for levying VAT on film distribution activity. The contingent liability is for the period April 1, 2005 to March 31, 2010. 89.14 60.22

Note: Future cash outflow in respect of (b), (e) & (f) above are determinable only on receipt of judgments/decisions pending at various forum/authorities.

4 Share Capital:

i) The Board of Directors, vide resolution dated October 9, 2009, approved increase of Authorised Share Captial from Rs. 450 Mio to Rs.700 Mio which has been approved by the shareholders of the Company on November 12, 2009 through postal ballot.

ii) On January 25, 2010, pursuant to the Scheme of Arrangement between the Company and its subsidiaries – UMP Plc and UTV Motion Pictures (Mauritius) Limited (Refer Note 23 to Sch.21), the Company has issued 6,436,782 equity shares of Rs. 10 each to the minority shareholders of UMP Plc, at a swap ratio of 1 equity share of the Company for every 3.75 shares of UMP Plc.

iii) Employee Stock Option Scheme – 2007:

Pursuant to the resolution passed by the Board of Directors on July 27, 2007 and members of the Company at the Annual General Meeting held on September 25, 2007, the Company had introduced Employee Stock Option Scheme (“the scheme”) for permanent employees and directors of the Company & of its subsidiaries, as may be decided by the Compensation Committee/Board.

The scheme provides that the total number of options granted there under will be 1,000,000. Each option, on exercise, is convertible into one equity share of the company having face value of Rs. 10. The options have been granted at an exercise price which is higher than the market price as on the date of the grant. Accordingly, the Company has not recognised any expense on account of grant of stock options.


Schedule 21

118




March 31, 2009

Option Outstanding at the beginning of the year 482,500 530,000

Options Granted during the year 652,500 60,000

Options Exercised during the year – –

Options Lapsed during the year (142,500) (107,500)


Employee Stock Option Scheme – 2009:

Pursuant to the resolution passed by the Board of Directors on July 10, 2009 and members of the Company at the Annual General Meeting held on September 4, 2009, the Company had introduced Employee Stock Option Scheme 2009 (“the 2009 scheme”) for permanent employees and directors of the Company & of its subsidiaries, as may be decided by the Compensation Committee/Board.

The 2009 scheme provides that the total number of options granted there under will be 1,000,000. Each option, on exercise, is convertible into one equity share of the company having face value of Rs. 10. The options have been granted at an exercise price which is higher than the market price as on the date of the grant. Accordingly, the Company has not recognised any expense on account of grant of stock options.

The details of the activity under the 2009 scheme during the year is as follows:


March 31, 2010

Option Outstanding at the beginning of the year –

Options Granted during the year 57,500

Options Exercised during the year –

Options Lapsed during the year –

Options Outstanding at the year end 57,500

iv) The Company had allotted 4,532,000 warrants each convertible into equivalent number of equity shares to Unilazer Exports and Management Consultants Limited (‘Unilazer’), on a preferential basis on May 6, 2008, with an option to convert it into equity shares of the Company of nominal value of Rs. 10 each at a price of Rs. 860.79 (including a premium of Rs. 850.79 per share) within a period of 18 months from the date of issue. The Company had received Rs. 390.11 Mio being 10% of the total amount of the warrants on allotment. The aforesaid warrants have lapsed and 10% of the total amount paid by Unilaser on allotment of warrant is forfeited and transferred to capital reserve.

5 Investments:

i) During the year, the Company has acquired additional 10% equity shares in its subsidiary UTV Global Broadcasting Limited for a consideration of Rs. 329.70 Mio. Accordingly, the Company holds 85% equity share capital of UTV Global Broadcasting Limited as on the Balance Sheet date.

ii) During the year, the Company has acquired the equity capital in Indiagames Limited held by its wholly owned subsidiary IG Interactive Limited for a consideration of Rs. 259.19 Mio. Accordingly, the Company holds 60.40% equity capital in Indiagames Limited out of which 1.78% is held for the benefit of the management shareholders.

iii) During the year, the Company has subscribed to 4,000,000 additional equity shares of USD 1 each in its wholly owned subsidiary UTV Games Limited. The Company has also subscribed to 3,650,000 preference shares of USD 1 each in UTV Games Limited during the year.


Schedule 21

119

FINANCIAL SECTION

6 (i) Debtors include amounts: (Rs. in Million)

Due from Subsidiaries: Maximum Outstanding

during the year



UTV Motion Pictures (Mauritius) Limited(merged with the Company – Refer Note 23 of Sch.21)

– – 12.34

UTV Communications (USA) LLC 13.26 13.26 –

Genx Entertainment Limited 90.85 5.19 8.76

Indiagames Limited 0.59 0.59 –

IG Interactive Entertainment Limited 3.37 0.39 –

UTV Entertainment Television Limited 0.96 0.15 –

RB Entertainment Limited 0.13 0.07 –

Total 19.65 21.10

6 (ii) Creditors include amounts:

Payable to Subsidiaries:

UTV Entertainment Television Limited 92.22 – 92.22

UTV Tele Talkies Limited 19.50 19.50 –

UTV Motion Pictures (Mauritius) Limited(merged with the Company – Refer Note 23 of Sch.21)

– 420.12

Total 19.50 512.34

7 Advances/Other Receivables from Subsidiaries are as follows:

UTV Communications (USA) LLC* 630.76 630.76 1,609.68

UTV Motion Pictures (Mauritius) Limited*(Merged with the Company – refer Note 23 of Sch.21)

– – 1,667.01

IG Interactive Entertainment Limited* 219.56 219.56 327.15

UTV Global Broadcasting Limited* 2,893.98 2,653.26 589.15

UTV Entertainment Television Limited# 4.55 2.42 2.06

Genx Entertainment Limited# 18.61 3.34 9.42

RB Entertainment Limited# 0.08 – 0.08

UTV New Media Limited# 384.19 0.91 371.35

First Future Agri & Developers Limited# 13.96 13.96 5.21

UTV TV Content Limited# 53.04 53.04 2.34

UTV Games Limited# 1.52 1.52 0.34

Total 3,578.77 4,583.79

* The amounts advanced to the subsidiaries are repayable on demand along with interest.# Repayable on demand. The above parties are also companies in respect of which information is required to be disclosed under the listing

agreements with Stock Exchanges.


Schedule 21

120

8 (a) Components of Deferred Tax Assets and Liability are:(Rs. in Million)

ParticularsAs at

March 31, 2010As at

March 31, 2009Deferred Tax Assets – Provision for Doubtful Debts 14.45 10.13 – Provision for Doubtful Advances 20.68 22.35 – Business Losses & Unabsorbed Depreciation 452.97 – – Provision for Retirement Benefits 4.84 3.85 – Timing Difference between books and tax depreciation 18.96 15.83 – Expense/Interest Allowable only on Payment/Receipt 2.23 15.33 – Others 0.18 0.35

514.31 67.84 Deferred Tax Liability – Inventories 264.31 6.54

264.31 6.54 Net Deferred Tax Asset 250.00 61.30

(b) Provision for Current Tax of Rs. 61.52 Mio (Previous Year – Rs. 41.48 Mio) represents tax computed according to the minimum alternate tax provisions (u/s 115JB) of The Income Tax Act, 1961.

(c) Considering long term corporate strategies, future profitability and virtual certainty, Deferred tax asset (net) of Rs. 250 Mio has been recognised as on the Balance Sheet date and the management is of the opinion that in the long run, the carry forward loss would be fully realised.

(Rs. in Million)



9 Remuneration to Directors:i) Managerial Remuneration: (a) Salaries 10.12 10.12 (b) Perquisites & Allowances 4.32 2.66

Total 14.44 12.78

Note: The above figures excludes provision for gratuity and leave encashment, since the same is provided on an actuarial basis for the Company as a whole.

ii) Calculation of net profit under Section 198/349 of the Companies Act, 1956: Profit before tax 387.58 371.10 Add: Managerial remuneration 14.44 12.78 Director’s Sitting Fees 0.50 0.44 Provision for doubtful debts 14.52 13.41 Provision for doubtful advances (0.35) 1.22 Fixed assets written off 12.90 – Less: Profit/(Loss) on sale of fixed assets (0.75) (28.88) Net Profit under Section 198/349 of the Companies Act, 1956 430.34 427.83 Remuneration Payable to Managing Director/Whole-time Director: At 10% of Net Profit – Restricted to Rs. 43.03 Million [Previous Year

Rs. 42.78 Million] 43.03 42.78


Schedule 21

121

FINANCIAL SECTION



March 31, 200910 Value of imports calculated on CIF basis:

Capital Goods – 6.98

11 Expenditure in foreign currency on account of: (a) Travelling 3.64 1.32 (b) Footage Costs 82.45 2.93 (c) Professional Fees 107.89 –(d) Others 19.42 0.28

12 Earning in foreign currency:(a) Exports calculated on FOB basis 201.17 227.65 (b) Interest 20.93 279.97 (c) Income from Shared Services 17.67 67.22 (d) Miscellaneous Income – 29.00

13 Miscellaneous Expenses include: Auditors’ remuneration in respect of : (a) Audit Fees 4.20 3.50 (b) Reimbursement of Out of Pocket Expenses 0.07 0.08 (c) Certification Fees/other services* 0.11 5.25 * Excludes fees paid for proposed placement of securities to Qualified Institutional Buyer’s Rs. 3 Mio and Scheme of Arrangement between the Company and its subsidiaries Rs. 2 Mio.

14 (a) Related Party Disclosures as required by Accounting Standard – 18” Related Parties Disclosures” issued by the Institute of Chartered Accountants of India are given below:

(i) Shareholders in the Company: Unilazer Exports & Management Consultants Limited Unilazer (Hong Kong) Limited The Walt Disney Company (Southeast Asia) Pte Limited (TWDC) *

* Pursuant to Shareholders’ agreement between TWDC and the founder promoter group, TWDC does not have ‘control’ as defined by AS-18 over the Company.

(ii) Subsidiaries of the Company: UTV Communications (USA) LLC IG Interactive Entertainment Limited Indiagames Limited Ignition Entertainment Limited, UK Ignition London Limited (Formerly known as Digi Guys Limited) Ignition Entertainment Limited, USA UTV Games Limited True Games Interactive, Inc UTV Global Broadcasting Limited Genx Entertainment Limited UTV Entertainment Television Limited UTV New Media Limited


Schedule 21

122

UTV TV Content Limited RB Entertainment Limited First Future Agri & Developers Limited UTV Tele Talkies Limited (subsidiary of UTV TV Content Limited w.e.f. July 3, 2009)

(iii) Joint Ventures of the Company: Smriti Irani Television Limited

(iv) Other Related Parties where common control exists: UTV News Limited United Tele-Shopping & Marketing Company Limited Unilazer Holdings Limited Television News and Entertainment (I) Limited Vijay Broadcasting Private Limited Unilazer Media Limited

(v) Key Management Personnel:

Executive Directors Rohinton Screwvala Deven Khote

(b) (i) Disclosure in respect of transactions with parties referred to in item (a) (i), (ii), (iii) & (iv) above:

(Rs. in Million)

Shareholders Subsidiary Companies Common Control Entities

Joint Venture Companies

Year ended March 31,

2010


2009


2010


2009


2010


2009


2010


2009Sales and Services – UTV Communications (USA) LLC 29.51 – – IG Interactive Entertainment

Limited 6.84 – – UTV Motion Pictures (Mauritius)

Limited – 196.84 – Genx Entertainment Limited 97.39 146.46 – UTV Entertainment Television

Limited 4.30 60.51 – UTV New Media Limited 3.06 0.07 – Indiagames Limited 2.86 – RB Entertainment Limited 0.30 – Windmill Entertainment Limited

(Divested w.e.f. January 31, 2009) – 0.19 Rights Purchased – UTV Entertainment Television

Limited – 100.00 – UTV Tele Talkies Limited 18.28 – Producers’ Share Payable/Paid – UTV Motion Pictures (Mauritius)

Limited – 316.80 Purchase of Equity Shares of UTV Global Broadcasting Limited from:Unilazer Exports & Management Consultants Limited[Refer Note 5(i) of Sch.21] 329.70 – – –


Schedule 21

123

FINANCIAL SECTION

(Rs. in Million)




2010


2009


2010


2009


2010


2009


2010


2009

Advance Warrants Money Received – Unilazer Exports & Management

Consultants Limited(Refer Note 4 (iv) of Sch.21) – 390.11

Finance (Equity contributions in cash or in kind) – Preference Shares in IG Interactive

Entertainment Limited – 571.29 – Conversion of Share application

money to Preference Shares in IG Interactive Entertainment Limited – 206.19

– Share application money in IG Interactive Entertainment Limited 2,046.63 –

– Refund of Share application money in IG Interactive Entertainment Limited 1,035.69 –

– Equity Shares Application Money to UTV News Limited – 181.60 1,005.30

– Refund of Equity Shares Application Money by UTV News Limited (Refer Note 26 to Sch.21) – 1,186.90 –

– Equity Shares Application Money in Unilazer Media Limited(Refer Note 26 to Sch.21) – 1,200.00 –

– Equity Shares in UTV Global Broadcasting Limited – 2,400.00

– Equity Shares in UTV New Media Limited – 45.00

– Share Application Money to UTV New Media Limited 56.44 –

– Refund of Share Application Mon-ey by UTV New Media Limited 7.19 –

– Equity Shares in First Future Agri & Developers Limited – 160.00

– Equity Shares in UTV Games Limited 189.12 381.15

– Preference Shares in UTV Games Limited 170.50 –

– Share Application Money in UTV Games Limited 6.21 –

Interest Charged to – UTV Global Broadcasting Limited 153.90 134.39 – UTV Communications (USA) LLC – 149.18 – IG Interactive Entertainment Limited 20.93 13.25 – UTV Motion Pictures (Mauritius)

Limited – 117.54


Schedule 21

124

(Rs. in Million)




2010


2009


2010


2009


2010


2009


2010


2009

Guarantees and Collaterals Corporate Guarantee given on behalf of: – IG Interactive Entertainment

Limited – 534.98 – Ignition Entertainment Limited 1,579.90 – – UTV Global Broadcasting Limited 500.00 – – Indiagames Limited 40.00 – – UTV News Limited 727.08 30.57

Corporate Guarantee taken from: – Unilazer Exports & Management Consultants Limited 727.08 – – Ignition Entertainment Limited 677.10 – – IG Interactive Entertainment

Limited – 70.00 – UTV Communications (USA) LLC – 20.00 (Refer Notes to Schedule 4 in

respect of guarantees given by subsidiaries favoring the Company)

– UTV Motion Pictures (Mauritius) Limited – 20.00

Expenses Paid on behalf of – UTV Communications (USA) LLC 24.02 61.25 – IG Interactive Entertainment

Limited 66.92 65.84 – UTV Motion Pictures (Mauritius)

Limited – 124.20 – UMP Plc – 0.08 – Indiagames Limited – 0.02 – RB Entertainment Limited – 0.08 – UTV Global Broadcasting Limited 7.42 5.16 – Genx Entertainment Limited 16.59 20.02 – UTV News Limited 2.42 24.90 – UTV Games Limited 1.19 0.34 – UTV Entertainment Television

Limited 9.68 10.17 – UTV New Media Limited 18.21 29.18 – First Future Agri & Developers

Limited 0.14 – – Unilazer Exports & Management Consultants Limited 0.31 – Expenses Reimbursed to – UTV Motion Pictures (Mauritius)

Limited – 355.77 – UTV Global Broadcasting Limited 11.03 –

Advisory fees charged – UTV News Limited – 27.40


Schedule 21

125

FINANCIAL SECTION

(Rs. in Million)




2010


2009


2010


2009


2010


2009


2010


2009

Advances from Customers – Genx Entertainment Limited – 175.00

Advances Given – UTV Communications (USA) LLC – 1,408.68 – UTV Motion Pictures (Mauritius)

Limited – 1,541.06 – IG Interactive Entertainment

Limited 277.19 216.96 – UTV News Limited 0.07 – – Genx Entertainment Limited 9.36 – – UTV Global Broadcasting Limited 2,894.10 296.39 – UTV New Media Limited – 411.89 – UTV TV Content Limited 50.71 2.34 – First Future Agri & Developers Pvt.

Limited 8.61 5.21 – Windmill Entertainment Limited – 4.21 – Smriti Irani Television Limited – 29.80 – Unilazer Exports & Management Consultants Limited – 329.70

Advances Repaid – UTV Communications (USA) LLC 1,024.71 21.64 – IG Interactive Entertainment

Limited 489.57 – – Genx Entertainment Limited 32.02 1.37 – UTV Global Broadcasting Limited 980.30 1,213.10 – UTV News Limited 42.31 22.84 – UTV Entertainment Television

Limited 9.32 – – UTV New Media Limited 21.26 0.34 – RB Entertainment Limited 0.08 – – Windmill Entertainment Limited – 5.55 – Smriti Irani Television Limited 11.73 11.00

Advances Written Off – Windmill Entertainment Limited – 2.86 – Smriti Irani Television Limited 14.60 –Outstanding Balance Payable – UTV Entertainment Television

Limited – 90.15 – UTV Tele Talkies Limited 19.50 – Receivable – UTV Communications (USA) LLC 644.02 1,609.69 – IG Interactive Entertainment Limited 219.96 327.15 – UTV Motion Pictures (Mauritius)

Limited – 1,259.23


Schedule 21

126

(Rs. in Million)




2010


2009


2010


2009


2010


2009


2010


2009 – Indiagames Limited 0.59 – – Genx Entertainment Limited 8.53 18.17 – UTV Global Broadcasting Limited 2,653.24 589.15 – UTV News Limited 0.04 48.82 – UTV Games Limited 1.52 0.34 – UTV Entertainment Television

Limited 2.57 – – UTV New Media Limited 0.91 371.35 – UTV TV Content Limited 53.04 2.34 – First Future Agri & Developers Pvt.

Limited 13.96 5.21 – RB Entertainment Limited 0.07 0.08 – Smriti Irani Television Limited 2.93 29.26 – Unilazer Exports & Management Consultants Limited – 329.70

Note: Transaction with subsidiaries – UTV Motion Pictures (Mauritius) Limited and UMP Plc have not been disclosed in the current period due to their merger with the Company from a retrospective date (Refer Note 23 of Sch.21). Accordingly, transaction of other related companies with these subsidiaires during the year has been disclosed as those with the Company.

b) ii) Disclosure in respect of transactions with persons referred to in item (a) (v) above:

Remuneration: 2009-10 2008-09 – Rohinton Screwvala 10.77 9.06 – Deven Khote 3.67 3.72

15 The Company is engaged in the production/making of media software, which requires various types, qualities and quantities of raw materials and inputs in different denominations. Due to the multiplicity and complexity of items, it is not practicable to maintain the quantitative record/continuous stock register, as the process of making program software is not amenable to it. Hence quantitative details are not maintained by the company as is the practice generally followed by companies in the Industry. Physical stock is taken at the end of the year.

16 The Company has not received any information from the “suppliers” regarding their status under the Micro Small and Medium Enterprises Development Act, 2006 & hence disclosures, if any, relating to the amounts as at year end together with interest paid/payable as required under the said Act have not been given.

17 Leases:

(a) There are no finance leases outstanding as on the Balance Sheet date.

(b) Operating Lease:

The Company’s significant leasing arrangements are mainly in respect of office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under “Other Expenses” in Schedule 19.


Schedule 21

127

FINANCIAL SECTION

These leasing arrangements are for a period not exceeding 5 years and are in most cases renewable by mutual consent, on mutually agreeable terms. The Company has placed a refundable deposit of Rs. 21.72 Million [Previous Year Rs. 25.63 Million] in respect of these leasing arrangements. Future lease rentals payable are as follows:

(Rs. in Million)

Particulars Year ended March 31, 2010


Not Later than one year 26.42 27.96

Later than one year but not later than five years 0.25 19.82

18 i) Earnings Per Share:


2010


2009

Profit after tax (Rs. in Million) 588.51 258.18

Weighted average number of shares for basic earnings per share (nos.)

– Equity Shares of Rs. 10/- each fully paid up 40,632,250 33,196,160

Weighted average number of shares for diluted earnings per share (nos.)

– Equity Shares of Rs. 10/- each fully paid up 40,794,232 33,196,160

Earning Per share (Rs)

Basic 14.48 7.78

Diluted 14.43 7.78

Reconciliation of basic and diluted shares used in computing earnings per share: (In Nos.)


2010


2009

Number of shares considered as basic weighted average shares outstanding 40,632,250 33,196,160

Add: Effect of dilutive issues of stock options 161,982 –

Number of shares considered as weighted average shares and potential shares outstanding 40,794,232 33,196,160

18 ii) Information on Ratios as required to be disclosed by Debentures Listing Agreement:

As on March 31, 2010

(a) Debt Service Coverage Ratio[Earnings before Interest and Tax/(Net Interest + Principal Repayment–Term Loans)] 1.51

(b) Interest Service Coverage Ratio(Earnings before Interest and Tax/Net Interest Expense) 3.34

19 Segment Reporting – Segment Identification, Reportable Segments and definition of each reportable segment:

(i) Primary/Secondary Segment Reporting Format:

(a) The risk/return profile of the Company’s business is determined predominantly by the nature of its products and services. Accordingly, the business segments constitute the primary segments for dislcosure of segment information.


Schedule 21

128

(b) In respect of secondary segment information, the Company has identified its geographical segments as (i) domestic and (ii) overseas. The secondary segment information has been disclosed accordingly.

(ii) Segment Identification: Business segments have been identified on the basis of the nature of the products/services, the risk/return profile of individual businesses, the organisational structure and the internal reporting system of the Company.

(iii) Reportable Segments: Reportable segments have been identified as per the criteria prescribed in Accounting Standard 17 – ‘Segment Reporting’ as specified in the Companies (Accounting Standards) Rules, 2006.

(iv) Segment Composition:

(a) Television Segment comprises television content, airtime sales and dubbing services;

(b) Movies segment comprises the film production, distribution and syndication business;

(v) Revenue and expenses have been accounted on the basis of their relationship to the operating activities of the segment. Incomes and expenditures which are related to the Company as a whole and are not allocable to segments on a reasonable basis have been allocated under “Unallocable Income and Expenditure”. Assets and Liabilities, which relate to the Company as a whole, and are not allocable to segments on a reasonable basis, have been included under “Unallocable Assets and Liabilities”.

(vi) Inter-segment Transfers – The Company accounts for intersegment sales and transfers at cost.

(Rs. in Million)Particulars Television Movies Inter Segment Adjustment Total

March 31, 2010

March 31, 2009

March 31, 2010

March 31, 2009

March 31, 2010

March 31, 2009

March 31, 2010

March 31, 2009

REVENUEExternal Revenue 993.35 1,284.50 2,271.85 1,229.16 – (1.79) 3,265.20 2,511.87

RESULTSegment Result 39.94 58.61 694.02 (23.51) – – 733.96 35.10 Less:Interest & Finance Charges (165.34) 283.38 Unallocable Other Expenditure (257.76) (200.06)Add:Unallocable Other Income 76.72 252.68 Profit Before Taxation 387.58 371.10

OTHER INFORMATIONSegment Assets 439.49 603.46 4,402.99 1,938.88 – – 4,842.48 2,542.34 Unallocable Assets 14,026.25 12,699.49 Total Assets 439.49 603.46 4,402.99 1,938.88 – – 18,868.73 15,241.83

Segment Liabilities 156.26 222.50 401.72 837.36 – – 557.98 1,059.86 Unallocable Liabilities 8,367.06 3,616.98 Total Liabilities 156.26 222.50 401.72 837.36 – – 8,925.04 4,676.84

Depreciation Segment Depreciation 4.61 4.93 4.85 15.03 – – 9.46 19.96 Unallocable Depreciation 9.60 9.15 Total Depreciation 4.61 4.93 4.85 15.03 – – 19.06 29.11


Schedule 21

129

FINANCIAL SECTION

(Rs. in Million)Particulars Television Movies Inter Segment Adjustment Total

March 31, 2010

March 31, 2009

March 31, 2010

March 31, 2009

March 31, 2010

March 31, 2009

March 31, 2010

March 31, 2009

Non Cash Expenses other than DepreciationSegment Non Cash Expenditure 11.50 4.69 23.31 15.96 – – 34.81 20.65 Unallocable Non Cash Expenditure 33.44 17.04 Total Non Cash Expenses other than Depreciation

11.50 4.69 23.31 15.96 – – 68.25 37.69

GEOGRAPHICAL SEGMENTRevenueDomestic 979.14 1,257.17 2,084.89 1,028.84 – (1.79) 3,064.03 2,284.22 Overseas 14.21 27.33 186.96 200.32 – – 201.17 227.65

AssetsDomesticSegment Assets 439.49 603.46 4,402.99 1,938.88 – – 4,842.48 2,542.34 Unallocable Assets - in India 14,026.25 12,699.49 Overseas – –

20 In accordance with the Company’s accounting policy, Rs. 317.29 Mio [Previous Year Rs. 37.23 Mio] is interest inventorised on movie projects during the year.

21 Employee Benefits

The disclosures as required as per the revised AS 15 are as under:

1 Brief description of the Plans:

The Company provides long-term benefits in the nature of Provident fund & Gratuity to its employees. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through appropriate authorities/insurers. The Company’s defined contribution plans are provident fund, employee state insurance and employees’ pension scheme (under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company’s defined benefit plans include gratuity benefit to its employees which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment as per the Company’s policy.

2 The Company has recognised the following amounts in the Profit and Loss Account for the year:

(Rs. in Million)



Employers’ Contribution to Provident Fund 7.13 6.66

Employers’ Contribution to Employees State Insurance 0.02 0.03

7.15 6.69

Included in Contribution to Gratuity, Provident and Pension Funds (Refer Schedule 18)

3 In accordance with the Accounting Standard 15 (Revised 2005), actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:

Current Year Previous Year (a) Discount Rate (per annum) 8.00% 7.75%(b) Rate of increase in Compensation Levels 6.00% 6.00%(c) Expected Rate of Return on Plan Assets (per annum) 8.00% 8.00%


Schedule 21

130

The following tables summarise the components of net benefit expenses recognised in the profit and loss account and funded status and amounts recognised in the balance sheet for the gratuity benefit plan.



March 31, 2009 A Changes in Defined Benefit Obligation

(a) Opening Defined Benefit Obligation 13.64 8.36 (b) Interest Cost 1.22 0.80 (c) Current Service Cost 2.57 1.88 (d) Benefits Paid (0.96) (0.49)(e) Actuarial Loss (1.94) 3.09 (f) Closing Defined Benefit Obligation 14.53 13.64

B Changes in the Fair value of Plan Assets(a) Opening Fair Value of Plan Assets 13.49 10.96 (b) Expected Return on Plan Assets 1.18 1.02 (c) Contribution during the year by employer 1.73 2.03 (d) Benefits Paid (0.96) (0.49)(e) Actuarial Loss 0.03 (0.03)(f) Closing Fair Value of Plan Assets 15.47 13.49

C Reconciliation of the Present Value of Defined Benefit Obligation and the Fair Value of Assets(a) Present Value of Funded Obligation as at year end 14.53 13.64 (b) Fair Value of Plan Assets as at year end 15.47 13.49 (c) Funded (Asset)/Liability recognised in the Balance Sheet

(Included in Provisions - Schedule 14) (0.94) 0.15

D Amount recognised in the Balance Sheet(a) Present Value of Obligation as at year end 14.53 13.64 (b) Fair Value of Plan Assets as at year end 15.47 13.49 (c) Net (Asset)/Liability recognised as at year end (0.94) 0.15

E Expenses recognised in the Profit and Loss Account(a) Current Service Cost 2.57 1.88 (b) Interest Cost 1.22 0.80 (c) Expected Return on Plan Assets (1.18) (1.02)(d) Net actuarial Loss (1.97) 3.12 Total Expenses recognised in the Profit and Loss Account 0.64 4.78 (Included in Contribution to Gratuity, Provident and Pension Funds - Schedule 18)

F Actual return on Plan Assets(a) Expected Return on Plan Assets 1.18 1.02 (b) Actuarial loss on Plan Assets 0.03 (0.03)(c) Actual Return on Plan Assets 1.21 0.99

G Percentage of each Category of Plan Assets to total Fair Value of Plan Assets as at March 31, 2010Insurer Managed Funds 100% 100%

H Experience AdjustmentOn Plan Liabilities (1.56) (1.44)On Plan Assets 0.03 (1.02)

I Expected Employers contribution for the next year 0.77 2.69

J The liability for leave encashment (non-funded) as at year end is Rs. 15.43 Mio (Previous Year Rs. 11.18 Mio).


Schedule 21

131

FINANCIAL SECTION

22 Interest In Joint Ventures:

The Company’s interests, as venturer, in jointly controlled entities are:

Name Incorporated inPercentage of

Ownership as at March 31, 2010

Joint venture party

Smriti Irani Television Limited (SITL) India 50% Smriti Irani

Windmill Entertainment Limited (WEL)(Divested w.e.f. January 31, 2009)

India – Sekhar Suman

The Company’s interest in the Joint Venture is reported as long-term investment (schedule 7) and stated at cost. The Company’s share of each of the assets, liabilities, income and expense, etc (without elimination of the effect of transactions between the Company and the joint venture) related to its interests in the joint ventures, based on financial information as certified by the auditors of the Joint ventures are as follows:

(Rs. in Million)As at

March 31, 2010As at March 31, 2009

SITL SITL WELI) Assets (a) Fixed Assets – 0.02 – (b) Deferred Tax Asset – – – (c) Current Assets, Loans and Advances Inventories – – – Sundry Debtors – 9.39 – Cash & Bank 0.28 1.88 – Loans and Advances 1.85 4.84 –

II) Liabilities (a) Unsecured Loan 1.47 14.63 – (b) Current Liabilities 0.29 3.08 –

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the period ended

January 31, 2009 SITL SITL WEL

(Rs. in Million) (Rs. in Million)III) Income Sales & Services 1.75 25.14 7.15 Other Income 1.96 0.51 1.43

IV) Expenses (a) Direct Cost 1.75 25.18 5.27 (b) Administrative Expenses 0.01 1.72 1.25 (c) Depreciation – – 0.01 (d) Current/Deferred tax – 0.20 –

V. Contingent Liability NIL NIL NIL

VI. Capital Commitment NIL NIL NIL


Schedule 21

132

23 Scheme of Arrangement between the Company and its subsidiaries – UMP Plc and UTV Motion Pictures (Mauritius) Limited.

The Board of Directors of the Company at its meeting held on July 20, 2009 considered a proposal to consolidate the business of its subsidiaries UMP Plc (“UMP”) and UTV Motion Pictures (Mauritius) Limited (“UTV Mauritius”) into the Company. Pursuant to the Scheme of Arrangement (‘the Scheme’) under Section 391 to 394 (read with Section 78 and Section 100 to 103) and other applicable provisions of the Companies Act, 1956, sanctioned by the Honourable Bombay High Court on January 8, 2010, the entire assets and business of UMP Plc and UTV Motion Pictures (Mauritius) Limited have been transferred and vested in the Company with effect from the appointed date viz April 1, 2007. The above order has been filed with the Registrar of Companies, Maharashtra on January 25, 2010 and accordingly, the order has become effective from that date.

The general nature of business of UMP and UTV Mauritius is film production, distribution, syndication business, animation business and the accounting for amalgamation is as per ‘Pooling of Interest Method’ prescribed in Accounting Standard-14 ‘Accounting for Amalgamation’ (AS-14), issued by The Institute of Chartered Accountants of India (ICAI).

In accordance with the Scheme:

(a) i) All the assets and liabilities of UMP & UTV Mauritius are recorded at book values appearing in their books immediately preceeding the appointed date. The inter company balances between UMP, UTV Mauritius and the Company have been eliminated from the appointed date.

ii) The share capital and securities premium in respect of shares held by minority shareholders has been accounted as Capital Reserve to reflect the nature of the transaction upon amalgamation. Subsequently, the same has been transferred to General Reserve in accordance with the accounting treatment prescribed by the scheme which is in deviation to AS-14 issued by ICAI.

iii) The profit or loss (after reflecting the financial position on consistent accounting policies) for the accounting years beginning the appointed date have been added to the opening balance of accumulated profit & loss account.

iv) The Company has transferred a sum of Rs. 7,500 Million from the Securities Premium Account to Business Restructuring Reserve Account (BRR).

(b) i) The Company has written down the carrying amounts of certain assets in the profit and loss account and an equivalent amount has been drawn from Business Restructuring Reserve account and credited to the profit and loss account, as follows:

Particulars (Rs. in Million)

Fixed Assets (net of accumulated depreciation) 7.30 Inventory 4,199.78 Sundry Debtors 84.97 Advance to Suppliers 134.70 Others 150.46

Total (A) 4,577.21

Note: The above write-downs have been debited to Business Restructuring Reserve gross of any tax impact.

ii) On January 25, 2010, pursuant to the Scheme of Arrangement between the Company and its subsidiaries – UMP Plc and UTV Motion Pictures (Mauritius) Limited, the Company has issued 6,436,782 equity shares of Rs. 10 each to the minority shareholders of UMP PLc, at a swap ratio of 1 equity share of the Company for every 3.75 shares of UMP Plc. The face value of the share issued has been adjusted against the Business Restructuring Reserve in accordance with the Scheme.

Amount utilised for shares issued 64.37

Expenses relating to the Scheme adjusted against Business Restructuring Reserve 255.89

Total (B) 320.26

Total (A+B) 4,897.47


Schedule 21

133

FINANCIAL SECTION

(c) Had the above Scheme not prescribed aforesaid treatment, the impact would have been as under:

i) In the Profit & Loss Account

(Rs. in Million)


March 31, 2010 Increase/(Decrease)

Direct Costs 4,199.78 Other Expenses 377.43 Profit Before Tax (4,577.21) Profit After Tax (4,577.21)

ii) In the Balance SheetAs at March 31, 2010 Increase/(Decrease)

Securities Premium Account 7,500.00 General Reserve (1,102.53)

24 The Company has undertaken necessary steps to comply with the Transfer Pricing regulations. The Management is of the opinion that the international transactions are at arm’s length and at present does not envisage any further tax liability. For the year ended March 31, 2010, the Company will carry out a transfer pricing study to comply with the said regulations.

25 Income from Shared services are recovery of expenses incurred on behalf of related companies, which include personnel and administrative expenses in accordance with the service agreements entered into with the related companies.

26 Share Application money includes Rs. 1,200.00 million given to Unilazer Media Limited (UML) in view of the proposed investment in the UML. Subsequent to the balance sheet date, the Company has received refund of the said amount from UML and invested an equivalent amount in Unilazer Holdings Limited, a promoter group Company which will be the ultimate holding company of the Business News initiative of the group. Subsequent to the Balance Sheet date, Unilazer Holdings Limited has refunded Rs. 800 million out of the above. The moneys advanced will be converted to equity shares when deemed fit by the Board of the respective companies.

27 Details of Dividend Remittance in Foreign Currency:

ParticularsFor the Year Ended

March 31, 2010For the Year Ended

March 31, 2009Number of Non-Resident Shareholders – 6 Number of Equity Shares Held – 15,539,667 Amount of Dividend Paid (USD in Million) – 0.35 Year to which Dividend Relates – 2007-08

28 As required by Companies Act, 1956 and Listing Agreement for Debentures, a transfer of Rs. 200 Million has been made to Debenture Redemption Reserve from the profits earned during the year.

29 The previous year’s figures have been regrouped, wherever considered necessary and are not comparable with the current year amounts as the current year’s figure include the impact of merger of UTV Motion Pictures (Mauritius) Limited and UMP Plc (Refer Note 23 of Sch.21). Previous years’ figures have not been reinstated to reflect the impact of the restrospective merger.




Signatures to Schedules 1 to 21 which form an integral part of the Financial Statements.


Schedule 21

134

Balance Sheet Abstract

ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE-VI TO THE COMPANIES ACT, 1956

a Registration Details: (Rs. in Million)

Registration No.: State Code:

Balance Sheet Date: Date Month Year

b Capital raised during the year Public Issue: Right Issue:

Bonus Issue: Private Placement:

Preferential Offer of Shares:

c Position of mobilisation and deployment of funds Total Liabilities including Shareholders Funds: Total Assets:

Sources of Funds: Paid-up Capital: Advance Against Warrants

Reserves and Surplus: Secured Loans

Unsecured Loans: Deferred Tax Liabilities

Application of Funds: Net Fixed Assets Investment:

Deferred Tax Assets Net Current Assets:

Misc. Expenditure Accumulated Losses

d Performance of the Company Turnover (Total Income) Total Expenditure:

Profit/(Loss) Before Tax Profit/(Loss) After Tax

Basic Earnings per Share in Rs. Diluted Earnings Per Share in Rs.

e Generic Names of three Principal Products/services of the Company Item Code No.

Product Description

5 6 9 8 7

3 1 0 3 2 0 1 0

1 1

N I L

N I LN I L

N I L

N I L

N I L

N A

N A

N I L

N I L

4 0 6 . 3 2

1 8 1 0 1 . 4 1

9 5 3 7 . 3 7

4 0 0 0 . 0 0

2 0 4 . 8 8

5 1 4 . 3 1

3 3 5 6 . 5 7

3 8 7 . 5 8

1 4 . 4 8

3 8 9 3 . 4 1

1 8 1 0 1 . 4 1

2 6 4 . 3 1

5 5 2 6 . 8 5

1 1 8 5 5 . 3 7

2 9 6 8 . 9 9

1 4 . 4 3

and Company’s General Business Profile

CORPORATE INFORMATION

135

NAME OF THE COMPANY:

UTV Software Communications Limited

REGISTRATION NO. OF THE COMPANY:

11-56987

DATE OF INCORPORATION:

June 22, 1990

BOARD OF DIRECTORS:

Mr. Rohinton Screwvala

CMD & Chief Executive Officer

Mr. Deven Khote

Executive Director

Mrs. Zarina Mehta

Non-Executive Director

Mr. Andy Bird


Mr. Kevin Mayer


Mr. Robert Gilby


Mr. Sanjaya Kulkarni

Independent Non-Executive Director

Mr. Suketu Shah


Mr. Darius Shroff


Mr. Narendra Ambwani


Mr. Sanjay Purohit


Mr. Prem Mehta


COMPANY SECRETARY:

Mohd. Sajid Ali

Corporate Information

AUDITORS:

Price Waterhouse & Co.

Chartered Accountants

BANKERS:

State Bank of India

State Bank of Mysore

State Bank of Indore

State Bank of Bikaner & Jaipur

Allahabad Bank

Oriental Bank of Commerce

Standard Chartered Bank

DBS

Deutsche Bank

Yes Bank

Axis Bank

HDFC

Life Insurance Corporation of India

SICOM

EXIM Bank

REGISTERED OFFICE:

1181-1182, 8th Floor, Solitaire Corporate Park,

Guruhargovindji Marg, Chakala, Andheri (E),

Mumbai - 400093.

Tel. No. 022-40981400

Fax No. 022-40981650

E-Mail: [email protected]

Website: www.utvgroup.com

REGISTRAR AND SHARE TRANSFER AGENT:

Karvy Computershare Private Limited

Plot No.17 to 24, Near Image Hospital

Vittalrao Nagar, Madhapur,

Hyderabad-500081.

Tel. No. 040 242 0815-28

Fax No. 040 2340814/23420857

136

Subsidiaries Information

UTV Entertainment Television LimitedBuilding No. 11, 7th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1800Fax: +91 22 4098 1813

UTV Global Broadcasting LimitedBuilding No. 11, 7th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1800Fax: +91 22 4098 1813

Genx Entertainment LimitedBuilding No. 11, 7th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1800Fax: +91 22 4098 1813

RB Entertainment LimitedBuilding No. 11, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1497Fax: +91 22 4098 1650

UTV TV Content Ltd.Building No. 11, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1497Fax: +91 22 4098 1650

UTV Tele Talkies Ltd.Building No. 11, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1497Fax: +91 22 4098 1650

Vikatan UTV Content ltd.Building No. 11, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1497Fax: +91 22 4098 1650

First Future Agri and Developers LimitedBuilding No. 11, 8th Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1497Fax: +91 22 4098 1650

Indiagames Limited11th Floor, Vishwaroop IT ParkSector 30 A, CIDCO, Vashi,Navi Mumbai 400 705.Tel: +91 22 6771 0700Fax: +91 22 6771 0777

UTV New Media LimitedBuilding No. 11, 1st Floor, Solitaire Corporate Park, Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093.Tel: +91 22 4098 1400Fax: +91 22 4098 1450

JAPANIgnition Entertainment Ltd.Da Vinci Shinjuku,4F. 4-3-17,Shinjuku, Shinjuku-kuTokyo, 160-0022, JapanTel: +81 (3) 5367 1670Fax: +81 (3) 5367 1671

MAURITIUSUTV Games Ltd.Les Cascades, Edith Cavell Street,Port Louis, MauritiusTel: +230 212 9800Fax: +230 212 9833

UNITED KINGDOMIG Interactive Entertainment Limited51-53 Station Road, Harrow, Middlesex, HA1 2TY UKTel: +44 020 8861 3355Fax: +44 020 8515 7055

Ignition Entertainment Limited (UK)9400 Garsington Road, Oxford Business ParkOxford, OX4 2HNTel: +44 1865 722106

Ignition London Limited (Formerly known as Digi Guys Ltd)9400 Garsington Road, Oxford Business ParkOxford, OX4 2HNTel: +44 1865 722106

INTERNATIONALUNITED STATES OF AMERICAUTV Communications (USA) LLC33, Wood Avenue South, 6th FloorIselin, NJ 08830Tel: 732-218-6032Fax: 732-626-7001

Ignition Entertainment Limited (USA)500, North Central Ave Suite 930Glendale, CA 91203Tel: (818) 508 - 5380Fax: (818) 502 - 0690

True Games Interactive1300 South Bristal StreetSanta Ana, CA 92861Tel: 001 949 825 5000

INDIA

don’t blink

Printed by

don't blink - Moneycontrol

Documents