MIRA
INFORM REPORT
|
Report Date : |
22.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ZEE ENTERTAINMENT ENTERPRISES LIMITED |
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Formerly Known As : |
ZEE TELEFILMS LIMITED |
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Registered Office : |
135, Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai - 400 018, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
25.11.1982 |
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Com. Reg. No.: |
11-28767 |
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CIN No.: [Company
Identification No.] |
L92132MH1982PLC028767 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMZ00074E |
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PAN No.: [Permanent
Account No.] |
AAACZ0243R |
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Legal Form : |
Public limited liability company. The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Supplying of software for television programmes. Subject is India’s first and largest vertically integrated media & entertainment company with its operations spread across more than 10 countries worldwide including India, the U.S.A., U. K., Europe, Africa, Caribbean, Canada, Australia, Middle East, and a few South Asian countries. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 77406632 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed owners of "ZEE TV Channel" which has been immensely successful in last 4 years. However, in the current year the company's channel faces threat from STAR TV (KBC Fame) and SONY. The company's profitability is expected to be low in future. Payments are usually correct and as per commitments.
The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
135, Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai - 400 018, Maharashtra, India |
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Tel. No.: |
91-22-2496 5609 / 11 / 16 / 2493 9011 / 6697 1234 |
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Fax No.: |
91-22-2496 4334/24931938 / 2490 0302 / 0213 |
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E-Mail : |
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Website : |
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Corporate Office : |
Chintamani Plaza, Andheri Kurla Road, Andheri [East], Mumbai – 400099, Maharashtra, India |
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Tel. No.: |
91-22-56971234 |
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Fax No.: |
91-22-56976531 |
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Branches : |
NATIONAL Ø No. 46, K. Bharathi Dasean Road, Alwarpet, Chennai – 600018, Tamil Nadu, India Tel. No. 91-44-24320616 Fax No. 91-44-24640592 Ø Manasarovar, 3rd Floor, 3-B, Camac Street, Kolkata – 700016, West Bengal, India Tel. No. 91-33-22467554 Fax No. 91-33-22463416 Ø No. 39, United Mansions, 3rd Floor, M. G. Road, Bangalore – 560001, Karnataka, India Tel. No. 91-80-5599999 Fax No. 91-80-5323526 Ø No. 5, Aashiana Bunglow, Premchand Nagar Road, Ahmedabad – 380015, Gujarat, India Tel. No. 91-79-6870060 Fax No. 91-79-6870669 Ø 6-2-929, D. B. Enclave, Raj Bhavan Road, Kharitabad, Hyderabad – 500004, Andhra Pradesh, India Tel. No. 91-40-23372323 Fax No. 91-40-23372822 Ø J – 27, South Extension, Part – 1, New Delhi – 110 049, INDIA Tel. No.: 91-11-2461 0834 Fax No. 91-11-246408836/0839 Ø Filmcity 19, Sector 1/6-A, Noida – 201 301 Uttar Pradesh, India Tel. No.: 91-120-24511064 Fax No. 91-120-25415240 Ø New Prakash Cinema Building, N. M. Joshi Marg, Delisle Road, Near Pragati Industries, Mumbai – 400013, Maharashtra, India Tel. No. 91-22-23061726/27 Fax No. 91-22-23008501 Ø B-10, Essel House, Industrial Area, Lawrence Road, New Delhi – 110035, India Tel. No. 91-11-27101145 Fax No. 91-11-27106128 Ø Chintamani Plaza, 4th Floor, Andheri – Kurla Road, Andheri [East], Mumbai – 400099, Maharashtra, India Tel. No. 91-22-28369887/88 Fax No. 91-22-28369886 Ø 5th Floor, Raddison Plaza, N H –8, New Delhi – 110037, India Tel. No. 91-11-26779343/45 / 2836 9887 / 88 Fax No. 91-11-26779340/50 / 2836 9886 INTERNATIONAL Ø 1615, W Abram St., Ste 200 C-E, Arlington, Texas- 76013, USA Tel. No.: 817-274 2933 Fax No.: 817-274 4845 Ø 7, Belvue Business Centre, Belvue Road, Northolt, Middlesex UB5 5QQ, London, United Kingdom Tel. No.: 44-208 839 4000 Fax No. 44-208 8458603 Ø 272, Oak Avenue, Ground Floor, Atrium Terraces, Randburg 2194, South Africa Tel. No.: 27-11 7810450 Fax No. 27 – 11 7813347 Ø Mr. Deepak Jain, Asia Today Limited, 1201, Asia Standard Tower, 59-65, Queen’s Road, Central Hong-Kong Tel. No.: [852] 2868 9060 Fax No. [852] 2801 4346 Ø Mr. Vijay Parab, Expand Fast Holding Limited, 500, Rifle Range Road, 01-09 Bukit Timah Satellite, Earth Station, Singapore – 588-397 Tel. No. [656] 4669331 Fax No. [656] 4668837 Ø Ware House No. A3-36, P.O. Box 8009, SAIF Zone, Sharjah, United Arab Emirates Tel. No.: [971] 65570771 Fax No. [971] 65572397 Ø Suite 302, 781, Pacific Highway, Chatswood, NSW 2067, Australia Tel. No.: 612 9419 8522 |
DIRECTORS
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Name : |
Mr. Subhash
Chandra |
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Designation : |
Chairman &
Managing Director |
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Name : |
Mrs. Laxmi
Narayan Goel |
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Designation : |
Whole Time
Director |
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Name : |
Mr. Punit Goenka |
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Designation : |
Whole Time
Director |
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Name : |
Mr. Ashok Kurien |
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Designation : |
Director |
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Name : |
Mr. B. K. Syngal |
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Designation : |
Director |
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Name : |
Mr. D. P.
Naganand |
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Designation : |
Director |
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Name : |
Mr. Nemi Chand
Jain |
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Designation : |
Director |
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Name : |
Mr. Rajan Jetley |
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Designation : |
Director |
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Name : |
Mr. M Y Khan |
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Designation : |
Director |
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Name : |
Mr. Gulam Noon |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. M
Lakshminarayanan |
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Designation : |
Company Sectary |
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Name : |
Mr. Pradeep Guha |
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Designation : |
CEO |
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Name : |
Mr. Abhijit
Saxena |
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Designation : |
Zee TV |
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Name : |
Mr. Ajay Kumar |
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Designation : |
Zee Telugu |
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Name : |
Mr. Amitabh Kumar |
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Designation : |
Technology |
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Name : |
Mr. Arun Khaitan |
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Designation : |
Education |
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Name : |
Mr. Ashish Kaul |
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Designation : |
Corporate Brand
Development |
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Name : |
Mr. Bharat Ranga |
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Designation : |
Zee Cinema and
PAC |
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Name : |
Mr. Himanshu Mody |
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Designation : |
Zee Sports |
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Name : |
Mr. Hitesh Vakil |
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Designation : |
Finance |
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Name : |
Mr. Indranil
Chakravarti |
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Designation : |
Zee Cafe, Zee
Studio and Zee Trendz |
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Name : |
Mr. Irswin
Balvani |
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Designation : |
Zee Muzic |
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Name : |
Mr. Jawahar Goel |
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Designation : |
SitiCable and
Dish TV |
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Name : |
Mrs. Laxmi Narain
Goel |
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Designation : |
Zee News and Zee
Business |
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Name : |
Mr. Nitin Vaidya |
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Designation : |
Zee Marathi, Zee
Bangla, Zee Gujarati and Zee Smile |
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Name : |
Mr. Rabindra
Narayan |
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Designation : |
Zee Punjabi |
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Name : |
Mr. Sanghamitra
Ghosh |
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Designation : |
Human Resources |
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Name : |
Mr. Sanjay Jagtap |
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Designation : |
Legal |
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Name : |
Mr. Siddharth
Jain |
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Designation : |
Distribution |
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Name : |
Mr. Yogesh RadhaKrishnan |
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Designation : |
Middle East
Operations |
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Name : |
Mrs. Sita L N
Swamy |
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Designation : |
Marketing |
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Name : |
Mr. Sanjay
Agrawal |
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Designation : |
Finance |
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Name : |
Mr. Neil
Chakravarti |
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Designation : |
Zee Café, Zee Studio
and Zee Trendz |
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Name : |
Mr. Joy
Chakraborthy |
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Designation : |
Advertising Sales
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MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoter Shareholding as on March 31, 2007 |
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Delgrada Limited |
82033402 |
18.92% |
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Jayneer Capital Private Limited |
52346704 |
12.07% |
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Lazarus Investment Limited |
11500000 |
2.65% |
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Prajatma Trading Company Private Limited |
7574500 |
1.75% |
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Essel Infra Projects Limited |
6400000 |
1.48% |
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Premier Finance And Trading Company Limited |
6176000 |
1.42% |
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Ganjam Trading Company Private Limited |
6016500 |
1.39% |
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Briggs Trading Company Limited |
4451262 |
1.03% |
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Churu Trading Company Private Limited |
3576000 |
0.82% |
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Ambience Advertising Private Limited |
2275000 |
0.52% |
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Mr. Ashok Kurien |
2042000 |
0.47% |
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Mrs. Laxmi Goel |
1750000 |
0.40% |
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Mrs. Sushila Goel |
680000 |
0.16% |
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Veena Investment Private Limited |
431000 |
0.10% |
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Mrs. Sushila Devi |
250000 |
0.06% |
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Total
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187502368 |
43.24% |
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Top
Ten Public Shareholding as on 31st March 2007 |
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Life Insurance Corporation Of India |
21427720 |
4.94% |
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Fid Funds (Mauritius) Limited |
21244025 |
4.90% |
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Oppenheimer Funds Inc. A / C Oppenheimer
Globalfund |
19016242 |
4.39% |
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Icici Prudential Life Insurance Company
Limited |
9261573 |
2.14% |
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T Rowe Price Emerging Markets Stock Funds |
9062212 |
2.09% |
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Templeton Mutual Fund A/C Franklin India
Bluechip Fund |
8213855 |
1.89% |
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HDFC Trustee Company Limited – HDFC
Prudence Fund |
7588771 |
1.75% |
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Lloyd George Investment Management
(Bermuda) Limited A/C L G India Fund Limited |
7324696 |
1.69% |
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Merrill Lynch Capital Markets Espana S.A ,
S V |
6414600 |
1.48% |
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Sbi Mutual Fund Magnum Childrens Benefits
Plan |
6241820 |
1.44% |
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Total |
115795514 |
26.71% |
BUSINESS DETAILS
|
Line of Business : |
Supplying of software for television programmes. Subject is India’s first and largest vertically integrated media & entertainment company with its operations spread across more than 10 countries worldwide including India, the U.S.A., U. K., Europe, Africa, Caribbean, Canada, Australia, Middle East, and a few South Asian countries. |
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Products : |
Product Description - Item Code (ITC Code) Recorded Video Cassettes – 85249001 |
GENERAL
INFORMATION
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No. of Employees : |
1500 |
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Bankers : |
Ø Standard
Chartered Bank Ø Jammu &
Kashmir Bank Ø BNP Paribas Ø IDBI Bank Limited Ø ING Vyasa Bank
Limited Ø Axis Bank Ø ICICI Bank
Limited Ø HDFC Bank Limited |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
MGB and Company Chartered Accountant |
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Subsidiaries : |
Ø
E-Connect Limited Ø
Programme Asia Trading Company Limited Ø
El Zee Television Limited Ø
Dakshin Media Limited Ø
Kaveri Entertainment Limited Ø
Siti Cable Network Limited Ø
Zee Interactive Multimedia Limited Ø
Zee Interactive Learning Systems Limited Ø
Asia T.V. Limited, United States of America Ø
Zee TV USA, Inc. Ø
Asia TV (USA) Limited Ø
Asia TV (Africa) Limited Ø
Zee TV South Africa (Proprietary) Limited Ø
Software Suppliers International Limited Ø
Zee Multimedia Worldwide Limited, Mauritius Ø Zee Multimedia
Worldwide Limited, BVI |
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Associates : |
Ø Siticable
Network Limited* Subsidiary 236,562 Ø Zee Turner
Limited, Subsidiary 14,060 Ø Zee Network
Employees Welfare Trust Others Ø Padmalaya
Telefilms Limited Ø Zee Sports
Limited Ø Asia TV Limited Ø Asia Today
Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
500000000 |
Equity shares |
Rs. 1/- each |
Rs.500.000 millions |
|
2500000 |
Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs.250.000 millions |
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Total |
Rs.750.000millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
433566765 |
Equity shares |
Rs. 1/- each |
Rs.433.567
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
433.567 |
412.549 |
412.505 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
18918.091 |
15036.917 |
20955.000 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
19351.658 |
15449.466 |
21367.505 |
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LOAN FUNDS |
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1] Secured Loans |
1806.634 |
346.147 |
832.915 |
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2] Unsecured Loans |
733.881 |
4495.918 |
4388.000 |
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TOTAL BORROWING |
2540.515 |
4842.065 |
5220.915 |
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DEFERRED TAX LIABILITIES |
11.682 |
0.000 |
0.000 |
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TOTAL |
21903.855 |
20291.531 |
26588.420 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
932.116 |
1075.370 |
1680.658 |
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Capital work-in-progress |
121.631 |
77.582 |
111.707 |
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INVESTMENT |
13458.895 |
13448.171 |
15475.672 |
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DEFERREX TAX ASSETS |
0.000 |
5.692 |
55.172 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
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Inventories |
2.520
|
91.860 |
7.476
|
|
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Sundry Debtors |
2839.238
|
2146.278 |
2866.339
|
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Cash & Bank Balances |
38.795
|
237.463 |
386.046
|
|
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Other Current Assets |
1874.330
|
1575.962 |
1811.089
|
|
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Loans & Advances |
6780.397
|
5969.558 |
8339.490
|
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Total
Current Assets |
11535.280
|
10021.121 |
13410.440 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
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Current Liabilities |
3327.790
|
3807.077 |
3373.652
|
|
|
Provisions |
816.426
|
535.573 |
785.027
|
|
Total
Current Liabilities |
4144.216
|
4342.650 |
4158.679 |
|
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Net Current Assets |
7391.064
|
5678.471 |
9251.761
|
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MISCELLANEOUS EXPENSES |
0.149 |
6.245 |
13.550 |
|
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|
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|
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|
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TOTAL |
21903.855 |
20291.531 |
26588.520 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
8676.786 |
8313.961 |
6930.712 |
|
|
Other Income |
614.553 |
510.237 |
0.000 |
|
|
Total Income |
9291.339 |
8824.198 |
6930.712 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
2461.136 |
1010.960 |
1622.725 |
|
|
Provision for Taxation |
799.050 |
344.768 |
0.000 |
|
|
Profit/(Loss) After Tax |
1662.086 |
666.192 |
1622.725 |
|
|
|
|
|
|
|
Export Value
|
1150.109 |
1020.978 |
651.016 |
|
|
|
|
|
|
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Import Value
|
675.277 |
2053.691 |
654.656 |
|
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Expenditures : |
|
|
|
|
|
|
Operational Cost / Cost of Goods |
4783.788 |
5390.383 |
|
|
|
Personnel Cost |
411.209 |
443.304 |
4091.092 |
|
|
Administrative and other Expenses |
275.647 |
578.645 |
|
|
|
Selling and Distributions Expenses |
1085.224 |
1112.452 |
|
|
Total Expenditure |
6555.868 |
7524.784 |
4091.092 |
|
QUARTERLY RESULTS
|
Year |
30.09.2007 |
30.06.2007 |
|
Type
|
2 Quarter |
1st
Quarter |
|
Sales Turnover |
2290.600 |
2244.300 |
|
Other Income |
196.600 |
198.900 |
|
Total Income |
2487.200 |
2443.200 |
|
Total Expenditure |
1348.900 |
1364.900 |
|
Operating Profit |
1138.300 |
1078.300 |
|
Interest |
69.400 |
79.900 |
|
Gross Profit |
1068.900 |
998.400 |
|
Depreciation |
19.200 |
19.200 |
|
Tax |
353.400 |
337.800 |
|
Reported PAT |
696.300 |
641.400 |
KEY RATIOS
|
Year |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.21 |
0.27 |
0.19 |
|
Long Term Debt-Equity Ratio |
0.16 |
0.26 |
0.16 |
|
Current Ratio |
2.04 |
2.56 |
2.55 |
|
TURNOVER RATIOS |
|||
|
Fixed Assets |
6.67 |
4.81 |
3.35 |
|
Inventory |
4.90 |
4.77 |
3.86 |
|
Debtors |
3.48 |
3.32 |
2.64 |
|
Interest Cover Ratio |
14.01 |
8.36 |
16.07 |
|
Operating Profit Margin(%) |
31.53 |
15.86 |
43.05 |
|
Profit Before Interest And Tax Margin(%) |
30.55 |
14.08 |
40.90 |
|
Cash Profit Margin(%) |
20.14 |
10.10 |
27.22 |
|
Adjusted Net Profit Margin(%) |
19.16 |
8.31 |
25.07 |
|
Return On Capital Employed(%) |
12.57 |
4.99 |
10.65 |
|
Return On Net Worth(%) |
9.55 |
3.75 |
7.76 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was founded in October 1992 as a content supplier for Zee TV - India's first Hindi satellite channel. It was promoted by Subhash Chandra, one of India's leading entrepreneurs, who sought to establish Subject as an 'infotainment' company focused on the convergence of media and communications.
Early in Subject's history, Subhash Chandra and the STAR group of companies entered into a joint venture for television broadcasting in India. When News Corp Limited acquired the satellite distribution business of Star, News Corp de facto became a partner of Subject. To further develop the relationship, News Corp and Subject subsequently co-founded Siticable one of the leading cable MSOs. In March 2000, after a six-year joint venture, Subject bought News Corp's stake in both the broadcasting business and Siticable.
People at Subject have built a diverse portfolio of leading businesses over time and have taken a host of strong Company-wide initiatives that drive growth and increases efficiency. Subject has a very strong consumer-connect and a set of common values that allows it to face any environment with confidence.
Subject is the largest vertically integrated Media and Entertainment Company in
India, which serves more than 120 countries and reaches more than 300 millions
viewers across the globe in seven different languages. The company has built a
valuable portfolio of television programming assets including Zee TV, Zee
Cinema, Zee Music, Zee News and the regional programming portfolio. During 2005
the company has launched Zee Sports, Zee Smile and Zee Telugu, Zee Business,
Zee Kashmir (a one hour slot on Zee Punjabi). These network channels are now
available on India's first Direct to Home platform, Dish TV.
Subject extends South Asia beam of Zee TV to Hong Kong, Thailand, Philippines,
Indonesia and Japan. There are over 300 Kid Zee centers internationally.
The network today symbolize and serves diverse demo-graphics to provide the
basic framework to give vent and shape to the aspirations of millions of South
Asians; the aspirations in terms of hunger for entertainment, hunger for news,
information and knowledge and appetite for exposure to the rich cultural
heritage of India and its diverse language and regions.
Zee TV up to 1999 has been operating four channels, three of which were being
played out of STAR TV facility in Hong Kong on lease basis. With the growth of
the network into eleven channels, the launch of the DTO bouquet and the Alpha
channels including the English channels, a decision was taken to install a
fully owned facility in Singapore which can play-out ten channels. This
facility was set up in a record time of three months and has been fully
operational since middle of March 2000.
Essel studios in Noida is the hub of its News production facilities for Zee
news channel. The facility has two large studios where all the news bulletins
are produced. The same is then sent to Hong Kong through an earth station
installed by VSNL in the same premises. This contribution is down linked in
Hong Kong and used for broadcasting on Zee News Channel.
Zee Interactive Learning Systems provides education through franchise network,
TV, Internet, strategic tie-ups with universities, colleges, and
companies.
The company's 100% subsidiary - Zee Multimedia Worldwide- BVI is the 100%
holding company of Zee Multimedia Worldwide - Mauritius and others. The
Mauritius company, in turn, has 5 wholly-owned subsidiaries. They are namely,
Asia TV Limited, UK (space selling, broadcasting of Zee channels in UK and
Europe), Zee TV Inc., USA (broadcasting of Zee channels in USA), Asia TV Africa
(broadcasting of Zee channels in Africa through Asia TV SA Proprietary
Limited), Zee Telefilms International (space seller in Middle East), and
Software Suppliers International, UAE (for syndication of programmes outside
India).
Of this, Zee TV Inc. USA has got another subsidiary called Asia TV (USA) which
is the space seller in USA.
In September 1999, subject acquired Zee Multimedia Worldwide Limited (ZMWL).
Following this acquisition, all the international operations including the
broadcasting business of ZMWL came under subject's control. ZTL acquired News
Corp's 50% stake in Asia Today Limited (ATL), Siticable, and Programme Asia
Trading Company Limited and now owns 100% of these businesses. The
consideration paid for the acquisition was USD 296.51 millions
Zee group pioneered Siticable in the year 1994 to provide cable TV service.
Siticable acquired strong presence in the Indian market with its city specific
channel called Siti channel, which provides content and programmes based on
city's civic issues and social problems.
Subject has entered into a joint venture with MGM, US, for its English movie
channel.
In May, 2001, Zee Telefilms has decided to induct a strategic partner,
preferably an international media major to strengthen its financial and
technical strengths to achieve high growth in the field of convergence. ZTL has
converted its flagship Zee TV into a pay channel with effect from 10 June
2001.
Zee Telefilms has come out with Open offer to acquire 2339900 fully paid-up
equity shares of Rs 10/- each of ETC Networks. It represents 20% of the voting
equity share capital at a price of Rs 31.52/- per fully paid up equity share.
The issue opens on 3rd Apr. 2002 and closes on 3rd May 2002.
In order to optimize shareholders value, the Board of Directors of Zee
Telefilms cleared a corporate restructuring proposal as a result of which
eleven subsidiaries of Subject would be either merged with it or wound up,
subject to necessary regulatory approvals. The companies that are proposed to
go are E-connect India, Programme Asia Trading Company, Elzee Television,
Kaveri Entertainment, Dakshin Media, Winterheath Company, Mauritius, Hokushan
Trading, Hongkong, Expand Fast Holdings, BVI, Zee Multimedia Worldwide, BVI,
Asia TV, USA, Zee TV SA, and South Africa.
As a part of this corporate restructuring, in fiscal year 2002-03 The company
has merged its subsidiaries companies, Kaveri Entertainment Limited, Elzee
Television Limited and Programme Asia Trading Company Limited with
itself.
In the year 2003-04 the company has merged Dakshin Media Limited with itself
and Asia TV (Africa) Limited, Software Supplies (International) Limited, Zee
Telefilms International Limited and Zee MGM Limited was merged with Asia Today
Limited, Mauritius. In addition, Asia TV (Netherlands) Limited BVI was wound
up.
During 2005, Expand Fast Holdings Limited, One of the overseas subsidiaries,
merged with Asia Today Limited, Mauritius (ATL). ATL the wholly subsidiary of
Winterheath Company Limited (WCL) merged with its holding company. After this
merger WCL changed its name to Asia Today Limited ATL has acquired 100% equity
stake in Pan Asia Infrastructure Limited, a Mauritius based company.
In 2004-05 the company has divested its equity stake of 63.80% in Padamalaya
Enterprises Private Limited (PEPL), which was the holding company of Padamalaya
Telefilms Limited (PTL) due to their irregularities in the management. The
company divest its equity in PEPL stake for a consideration, discharged by way
of transfer of two pieces of land admeasuring 20339 sq. mtrs. situated at
Jubliee Hills Hyderabad. Further ETC Networks Limited has amalgamated with
Econnect India Limited with effect from 1st April 2003 in the ratio of 1:1.
Both the companies are the subsidiaries of the company. Subsequent to this
amalgamation the name of Econnect has been changed to ETC Networks
Limited
The subsidiaries of subject are 25FPS Media Private Limited, Central Bombay Cable
Network Private Limited, ETC Networks Limited, Integrated Subscriber Management
Services Limited, New Era Entertainment Network Limited, Siti Cable Network
Limited (SITI), Siti Cable Broadband South Private Limited, Zee Turner Limited,
Zee Interactive Learning Systems Limited, Zee Sports Limited, Asia Business
Broadcasting (Mauritius) Limited, Asia TV Limited UK, Asia Today Limited,
Expand Fast Holdings (Singapore) Pte. Limited, Pan Asia Infrastructure Limited,
Zee TV USA, Inc., Zee TV South Africa (Proprietary) Limited, Zee Multimedia
Worldwide (Mauritius) Limited and Zee Multimedia Worldwide Limited BVI. Also
the company has formed a new subsidiary in Dubai Zee Telefilms Middle East
FZLLC and share capital is held by Asia Today Limited
Restructuring of News and Current Affairs Business As reported in the previous years' annual report, due to changes in the Up linking Guidelines, the Company is required to transfer its business relating to up linking of News and Current affairs programming on its channels including 'Zee News' to another entity. The Company had sought certain clarification from Government of India, Ministry of Information and Broadcasting regarding structure and modalities of such transfer of business. Recently necessary clarification has been received.
To comply with the
guidelines, the Company has entered into a Memorandum of Understanding with Zee
News Limited, a company 100% owned by Indian nationals, for transfer of
physical infrastructure, the editorial team and other staff related to
production and broadcast of News and Current Affairs programs on Zee network
channels including the Zee News Channel. Zee News Limited would accordingly
have complete news gathering responsibilities as well as editorial control over
the News and Current Affairs content. For getting requisite members' approval,
an appropriate resolution by Postal Ballot is being moved before the
shareholders. Corporate Restructuring of Overseas subsidiaries The Company has
initiated various measures to make its corporate structure simple and
transparent. During the year under review, Expand Fast Holdings Limited, one of
the overseas subsidiaries, merged with Asia Today Limited, Mauritius (ATL).
Also, ATL, the wholly owned subsidiary of Winterheath Company Limited (WCL) merged
with its Divestment of Equity Stake in Padamalaya Enterprises Private Limited.
The Company was holding 63.80% equity stake in Padamalaya Enterprises Private
Limited (PEPL), which was the holding company of Padamalaya Telefilms Limited
(PTL). Mr. G.A. Shesagirirao was the Managing Director and was entrusted with
the complete control over the dayto- day management of PTL. Sometime during the
year under review the Company came to know about irregularities in the
day-to-day management of PTL and PEPL. A detailed investigation, through a
reputed firm of chartered accountants, was conducted into the affairs of PTL
and PEPL. The investigation revealed that the management of PTL and PEPL were
not being conducted in a business like manner and the accounts were not
reflective of true and fair view of the state of affairs of the Company. The
assets held in PEPL were misappropriated to the detriment of the Company. The
Company took immediate measures to recover its investment in PEPL After due
deliberations with the promoters of PTL and in order to avoid protracted
litigation the Company agreed to divest its entire shareholding in PEPL for a
consideration, discharged by way of transfer of two pieces of land admeasuring
20,339 sq. mtrs., situated at Jubliee Hills, Hyderabad. In view of the
foregoing, PEPL and its subsidiaries cease to be subsidiaries of the Company.
DIRECTOR REPORTS:
BUSINESS
OVERVIEW
The Company has further consolidated its position in the Media and
Entertainment space. With expansion of TAM panel, Zee TV was the least affected
channel in the GEC segment demonstrating high quality shows the Company
presents. The launch of new soap Maayka' Parivaar' and Meri Doli Tere Angana'
during the year under review with already established properties like Ghar ki
Lakshmi .Betiyaan', Dulhan', Saath Phere', Kasamh Se', and Sa Re Ga Ma Pa', Zee
TV has been able to establish and broaden the reportere of successful shows in
this kitty. The Company has regained leadership position in the 9 p.m. to 10
p.m. slot and Betiyaan' continues to make further gains in ratings. Zee Cafe
has witnessed a major success in the current year and is continuously
surpassing the competitors in its genre, whereas Zee Cinema continues to
maintain its leadership position. These in the aggregate, lead to substantial
growth in advertising revenues during the year on a like to like basis.
Additionally, acquisition of Ten Sports' during the year has further
strengthened the Company's position in the Sports Genre.
Current year
saw introduction of Conditional Access System (CAS) in major cities and CAS
coverage is expected to be enlarged to other areas. This shall lead to higher
subscription declaration levels and the Company hopes to benefit from
introduction of CAS by increased subscription revenues. The successful
completion of de-merger of undertakings has resulted in maximizing shareholder
wealth during the year.
DEMERGER OF BUSINESS
UNDERTAKINGS
Upon receipt of the approval at the Court convened meetings
and the Extra Ordinary General Meeting held on July 25, 2006, the approvals of
the Hon'ble High Courts of Bombay and Delhi, and other regulatory authorities,
the Company has successfully concluded the process of de-merger of its News,
Cable and Direct Consumer Services business undertakings during the year under
review. Respective resultant entities viz. Zee News Limited (ZNL') for news
business, Wire and Wireless (India) Limited (WWIL') for cable business and Dish
TV India Limited (formerly known as ASC Enterprises Limited) (Dish TV')have issued
shares to the shareholders of the Company and subsequently the shares of ZNL,
WWIL and Dish TV have been listed at the Stock Exchanges.
SUBSIDIARIES and JOINT VENTURES
Consequent to Demerger of Cable and DCS Business Undertakings of the Company, the subsidiaries of the Company pertaining to the said Business Undertakings viz. Siti Cable Network Limited, Central Bombay Cable Networks Private Limited, Integrated Subscribers Management Services Limited, New Era Entertainment Network Limited, Siti Cable Broad and South Limited and Indian Cable Net Company Limited ceased to be subsidiaries of the Company from the dates of effectiveness of respective of Scheme(s) of Arrangement.
During the year, Asia Today Limited, Mauritius (ATL), a wholly owned overseas subsidiary of the Company formed the following wholly owned subsidiaries:
· Zee Technologies (Guangzhou) Limited, China with effect from July 11, 2006;
· Zee Sports International Limited, Mauritius, with effect from September 14, 2006; and
· Zee Sports Americas Limited, Mauritius, with effect from January 10, 2007, as wholly owned subsidiary of Zee Sports International Limited, Mauritius.
The Company exited from its investment in 25 FPS Media Private Limited (25 FPS)
and consequently 25 FPS ceased to be a subsidiary with effect from July 24,
2006.
As reported in Directors'
Report for the financial year 2006, in November, 2006 Zee Sports International
Limited, Mauritius, has acquired 50% stake with majority representation in the
Board in Taj TV Limited, Mauritius, the Company which owns Ten Sports' channel
and the Company has acquired 50% stake with majority representation in the
Board in Taj Television India Private Limited, Mumbai which is the distribution
arm of Ten Sports in India.
Pursuant to the buyback
announced and concluded by ETC Networks Limited, a listed subsidiary of the
Company, the Company's holding in the said subsidiary currently stands at
55.29% as compared to the earlier holding of 51.33%.
Ministry of Corporate Affairs, Government of India, has vide letter ref. no. 47/259/2007-CL-III dated July 16, 2007, granted exemption to the Company from provisions of Section 212(1) of the Companies Act, 1956, with regard to attaching the balance sheet, profit and loss account etc. of the Subsidiaries of the Company to the accounts of the Company for the financial year 2006-07. Accounts of the Subsidiary Companies are kept open for inspection by members and copies would be made available on request.
Highlights of Subsidiary
Company's operations providing relevant details as prescribed in the approval
is attached and forms part of the Annual Report.
SHARE CAPITAL
During the financial year 2006-07, the Company had issued, allotted and listed 20950516 Equity Shares of Re. 1 each, upon conversion of 9417 Foreign Currency Convertible Bonds (FCCBs) of US $ 10,000 each issued in 2004. As on date, out of FCCBs aggregating US $ 100 Millions issued in the year 2004, only US $ 5.33 Millions are outstanding.
CHANGE OF NAME
Upon receipt of all approvals, change in the name of the Company from Zee Telefilms Limited to Zee Entertainment Enterprises Limited had become effective from January 10, 2007. Consequently, the trading symbol for the equity shares of the Company at the National Stock Exchange has been changed from ZEETELE' to SUBJECT' with effect from February 28, 2007. At the Bombay Stock Exchange, there is no change in the ticker number allotted to the Company which remains the same as 505537'.
PUBLIC
DEPOSITS
During the year, the Company has not accepted or renewed any
Deposits, but has honoured all commitments to its existing depositors.
CORPORATE
GOVERNANCE
Besides strict compliance of Clause 49 of the Listing
Agreement, the Company is also benchmarking itself with well-established
Corporate Governance practices. Given the emerging pivotal role of Independent
Directors in bringing about good governance, the Company continues its efforts
in optimum utilization of their expertise and involving them in all critical decision
making processes. A separate report on Corporate Governance together with
Auditors' Certificate on compliance is attached to this Annual Report as also a
Management Discussion and Analysis statement.
MANAGEMENT DISCUSSION
AND ANALYSIS
The figures have been stated in Rs. Millions in the MD and A for better readability instead of Rs. Thousands as stated in the financial statements.
Investors are cautioned that this discussion contains forward looking
statements that involve risks and uncertainties including, but not limited to,
risks inherent in the Company's growth strategy, acquisition plans, dependence
on certain businesses, dependence on availability of qualified and trained
manpower and other factors. The following discussion and analysis should be
read in conjunction with the Company's financial statements included herein and
the notes thereto.
Industry Overview:
· With 112 millions TV households, India is the third largest TV market in the world with a penetration level of 59%. Expected to grow at 7-8% over the next 5 years.
· C and S TV Households stand at 68 millions Households with a penetration level of 61%.
· Indian households expected to grow from 215 millions in 2007 to 238 millions based on population rate of growth of 2.5%.
· Growing urbanization and increasing trend towards nuclear families would result in a higher number of households. Households with TV estimated to grow from 112 millions to 151 millions by 2011. Many urban household opting for multiple television sets. C and S Households expected to go up from current 68 millions to 110 millions households in 2011.
· DTH households expected to grow to around 27 millions in 2011.
· Digital cable estimated to grow to 28 millions in 2011.
· Subscription revenue to grow at 25% CAGR over the next five years.
· Broadcasters share of subscription revenue to grow faster at 58%.
Times are changing:
The industry is set to script a new story, with the key participants taking control of their respective operation. The fact that television has the inherent advantages of high reach, low cost of advertising and a relatively lower cost of entertainment (as compared to films) is expected to provide even more momentum to the television revolution. Given the non-linear business models, media businesses trade at a premium and have future embedded value, depending on management and scalability. Also, the Media Industry is crippled by lacunas like poor regulations, fragmented markets, low investments, fickle Revenue models and leakages. As inefficiencies are eliminated, the environment could only get better. The very fact that there is tremendous untapped potential in Advertising market can be depicted from the graph below where India is one of the lowest Ad spenders globally.
COMPANY OVERVIEW:
Zee Entertainment Enterprises Limited (Zee) (BSE: ZEE.BO and NSE: ZEE.NS) is India's largest vertically integrated media and entertainment company.
The Company was formed in 1982.
Subject is a global content powerhouse. The Company broadcasts India's leading
television channels including Zee TV, Zee Cinema, Zee Sports, Zee Cafe, Zee
Studio, Zee Music and ETC. The Company caters to global South Asian Diaspora
reaching close to 500 millions viewers across the globe.
Zee TV:
Zee TV has further strengthened its position to No. 2 in the GEC segment by narrowing the gap with No. 1 and broadening the gap with No. 3 channel respectively in the genre.
Continuous infusion of freshness in content to attract and retain fleeting
attention.
Consolidating high yielding time bands to build channel loyalty as against mere
programme loyalty.
Launch of new programs like Johny ala Re, Shabaash India, Betiyaan, Banoo Main
Teri Dulhan, Teen Bahuraaniyaan, Maayka, Antakshari, Raavan, Jab Love Hua, etc.
has widened the variety of offerings. Add to this the continuing strength of
Kasamh Se and Saat Phere, the lineup on Zee TV looks very formidable. As on the
week ending March 31, 2007, Zee TV had 19 programmes in the Top 50 and 28
programmes in the Top 100.
Zee TV is the only channel in the GEC Genre which is on an upward trend.
Zee Cinema continues to be the numero uno movie channel. With special series
like Amitabh Movies, Klub, etc. the channel has further strengthened its numero
uno position in Movies genre.
Zee Cafe offers the widest variety of English Entertainment programmes
including sitcoms, Dramas, Soaps, Reality, hat Shows, Fashion, Travel, Music,
Action, Hollywood and Bollywood news and snippets.
The Company has acquired a 50% stake in the premiere sports channel Ten
Sports'. With the acquisition of Ten Sports, the Company has strengthened and
broadened its presence in the sports genre catering to both cricket and
football viewers.
The operations of Subject can be classified into four main areas:
· Content and Broadcasting, which includes production, aggregation and broadcasting of TV software.
· Film production and distribution, consisting of production, acquisition and distribution of films.
· Education business, which includes ground learning centers in animation and media arts and also distance learning.
· Others.
The segment pertaining to Access' has been discontinued in the current year due to Demerger of distribution business to Wire and Wireless India Limited and Dish TV India Limited.
1. Content and Broadcasting
Content:
The Content business comprises various General entertainment, Sports,
Movies, Music and English channels, software production related activities
including ideation, development, creation of television programs and
acquisition of film rights for cable and satellite television.
Broadcasting:
Zee Entertainment Enterprises Limited broadcasts 15 channels in the Indian
subcontinent and several channels worldwide and reaches more than 500 millions
people across the globe. 'Zee' is a strong brand in India and, among the Indian
diaspora, internationally as well. Zee TV, its flagship television channel
launched in 1992, was the first Hindi general entertainment satellite channel
in India. Other television channels include Zee Cinema, the first Hindi Cinema
channel in India, Zee smile, a comedy channel, Zee Music, Zee Cafe, an English
general entertainment channel, Zee Studio, an English Movie channel, Zee
Trendz, a channel dedicated to fashion, ETC Music and ETC Punjabi. The Company
also offers 3 24-Hour specialized movie channels, Zee Premier, Zee Action, and
Zee Classic apart from a religious and lifestyle channel Zee Jagran. The
Companyis also present in the sports genre through its channel Zee Sports' and Ten
Sports'.
Subject generates subscription revenue through its Broadcasting operations in
India and abroad or the licensing of broadcasting rights of its channels in
certain international markets. The Company beams its channels to over 120
countries through various distribution platforms, and has entered into
agreements with DTH and local cable operators in each of the countries in which
its channels are distributed. Under these agreements, Subject generally
receives subscription or licensing fees from these operators and it retains the
advertising revenue it sells on its channels. Subject's principal broadcasting
operations are, apart from India, the USA, Canada, Caribbean, UK, Europe,
Africa, Middle East, Indonesia, Malaysia, and other parts of South Asia.
· In UK and Europe, Zee offers a 5-channel package of Zee TV, Zee Cinema, Zee Music, Zee Gujarati and Zee ETC Punjabi. It has around 174000 subscribers both on cable and DTH.
· The US operations started in 1998 and has four channels Zee TV, Zee Cinema, Zee Gujarati and Zee Punjabi with a combined subscriber base of around 288000.
· Zee's Africa operations have been steady with a base of approximately 73,000 subscribers for Zee TV.
· Zee broadcasts Zee TV and Zee Punjabi in Canada, where it has around 123000 subscribers. It has another 131000 subscribers in the Caribbean countries.
· Zee has a subscriber base of around 246000 in the Middle East and of about 2318000 in South East Asia.
· Zee TV and Zee Cinema are the No. 2 and No. 3 channels in the country (across all Genres). Zee cinema is also a leader in its own genre of Hindi Movies.
· Zee Sports is a fast growing franchisee showcasing some of the leading football and cricket properties. To further strengthen its position in sports genre, Zee has acquired a 50% stake in an established sports channel with of wide viewer ship in South Asia and the Middleeast, Ten sports'.
2. Education:
Zee Education began its activities in 1994 as a division of erstwhile Zee Telefilms Ltd. Zee Interactive Learning System' was formed in 1999 to create a learning network and deliver a variety of educational content and solutions for a range of careers and vocations through multiple delivery platforms. Apart from owned ground based centres, ZILS has been successful in establishing a pre-school learning centre franchise under the brand name Kidzee'; it has more than 600 such operational centres in India and abroad.
Recently ZILS has been accredited with ISO 9001: 2000 certification by British
Standards Institution (BSI) for its remarkable quality practices to design and
deploy educational content. Today ZILS is one of the most diversified companies
in impartation of pre-school, career and vocational training in India,
delivering learning solutions and training to various segments of society
through its multiple divisions viz.:
KIDZEE:
Playgroup, Nursery, Jr. K.G., Sr. K.G., Activity Centre.
ZIMA:
Zee Institute of Media Arts.
ZICA:
Classical and Digital Animation training Academy.
3. Film production and Distribution:
The division has been dormant in the current year while it observes developments in the industry and its transition to the organized sector.
The Company is continuing with this segment as there are
plans to re enter this segment of the business.
4. Others:
This segment consists of sale of Set Top Boxes.
BUSINESS STRATEGY:
With the evolvement of Media Sector, Broadcasters stand to
gain on more than one front viz. higher share in pay revenues, a higher ARPU,
transparent Reporting, Government Regulations that systemise operational flows,
etc.
The key elements of Zee's strategy during the year were (i) to improve
its position in the TV broadcasting segment with viewer enhanced content and
programming, (ii) expand its channel bouquet offerings, and (iii) focus on
shareholder value enhancement, and (iv) Maintain consistently high standards of
corporate governance.
(i) Position within the TV broadcasting
segment industry and viewer enhanced content and programming:
Zee has had a very good run in the year 2006-07. Its flagship channel Zee
TV has maintained a strong No. 2 Position in the GEC genre and is seen as a
serious challenger for the No. 1 spot. Subject currently has 19 shows in the
Top 50 and 28 shows in the Top 100.
(ii) Expansion of channel bouquet offerings:
Zee has been continuously adding channels to its bouquet of offerings over the years. This policy of providing the viewers an increased choice while covering all viewer groups and genres of programming has enabled the Company to gain an unmatched viewership on a national and global basis. Of particular mention would be acquisition of Ten Sports', the premium sports channel.
(iii) Focus on shareholder value
enhancement: Shareholder value has always been a prime priority of Zee. The
completed corporate restructuring in the form of Demerger of its News, Cable
and DTH operations has already resulted in the unlocking of shareholder value.
The restructuring also creates the opportunity for focused management and the
commitment gains that shall result in growth in shareholder value at each of
its demerged entities thereby providing higher returns to its
shareholders.
(iv) Corporate Governance:
Zee firmly believes that good governance is critical to sustaining corporate development, increasing productivity and competitiveness and creating shareholder wealth. The governance process should ensure that the available resources are utilized in a manner that meets the aspirations of all its stakeholders. The Company's essential charter is shaped by the objectives of transparency, professionalism and accountability. The Company continuously endeavours to improve on these aspects on an ongoing basis.
With the increasing emphasis on transparency and accountability, standards have
been set by various governing bodies on disclosure as well as judiciousness in
conduct. Zee has always tried to go a step further in this direction.
STAND-ALONE FINANCIALS
RESULTS OF
OPERATIONS:
Non-Consolidated Financial Information for the Year Ended March 31, 2007 compared to the Year Ended March 31, 2006.
Figures pertaining to 2005-06 are for Zee Entertainment Enterprises Limited (Pre Demerger), and hence are not comparable with figures of 2006-07 which relate to Zee Entertainment Enterprises Limited (Post Demerger). They have provided a comparison between Subject (Illustrative) figures for 2005-06 and Subject (Audited) figures for 2006-07 on a like to like basis for better understanding.
Total Revenue:
Total revenue increased Rs. 467.1 millions, or 5% from 8824.2 millions to Rs. 9291.3 millions. On a like to like basis, the same has gone up from Rs.7098.2 millions to Rs. 9291.3 millions an increase of Rs. 2193.1 millions or 31% due to higher Sales and Services and Other Income.
Sales and Services:
Revenue from Sales and Services increased Rs. 362.8 millions, or 4% from Rs.8314.0 millions to Rs. 8676.8 millions. On a like to like basis, the same has gone up from Rs. 6657.6 millions to Rs. 8676.8 millions an increase of Rs. 2019.2 millions or 30%, major contributor being Advertisement Revenue on account of better performance of Zee TV and other channels. Subscription Revenue has also seen a handsome growth of 29% as compatred to previous year.
Interest and Other Income:
Interest and Other income increased by Rs. 104.3 millions or 20% from Rs. 510.2 millions to Rs. 614.6 millions in 2007 on account of higher Interest Income.
On a like to like basis, the same has gone up from Rs. 440.6 millions to Rs.
614.6 millions an increase of Rs. 174.0 millions or 39% on account of higher
Interest income.
Total
Expenditure:
Total expenditure decreased by Rs. 968.9 millions or 13%
from Rs. 7524.8 millions to Rs. 6555.9 millions.
On a like to like basis, the same has gone up from Rs. 5781.0 millions to
Rs.6555.9 millions an increase of Rs. 774.9 millions or 13%. The major
contributor to this is Programming Cost and Personnel Cost.
Operational Cost/Cost of Goods:
Operational cost/Cost of Goods decreased Rs. 606.6 millions, or 11%, from Rs. 5390.4 millions in 2006 to Rs. 4783.8 millions in 2007.
On a like to like basis, the same has gone up from Rs. 4150.3 million to Rs.
4783.8 million an increase of Rs. 633.5 million or 15%. Increased thrust on
account of new programmes had a major impact on the Cost of Goods sold. As a %
of sales, the same was 55% in 2007 against 62% in 2006.
Personnel Cost:
Personnel cost decreased Rs. 32.1 million, or 7%, from Rs.
443.3 million in 2006 to Rs. 411.2 million in 2007. On a like to like basis,
the same has gone up from Rs. 303.7 million to Rs. 411.2 million a rise of 35%.
This rise is on account of increase in manpower and increments. As a % of sales,
the same was 5% in 2007 as well in 2006.
Administrative and Other expenses:
Administrative and Other expenses decreased from Rs. 578.6 millions to Rs. 275.6 millions, a decrease of Rs. 303.0 millions or 52%.
On a like to like basis, the same has gone down from Rs. 456.6 millions to Rs. 275.6 millions a fall of Rs. 180.9 millions or 40%. As a % of sales, the same was 3% in 2007 against 7% in 2006.
Selling and Distribution expenses:
Selling and Distribution expenses have decreased by Rs. 27 millions or 2% from Rs. 1,112.5 millions to Rs.1085.2 millions. On a like to like basis, the same has gone up from Rs. 870.5 millions to Rs. 1085.2 millions an increase of Rs. 214.7 millions or 25%. New marketing initiatives including promotion of new programmes have led to this rise. Higher spend on carriage fees also led to an increase in selling and distribution expenses. As a % of sales, it has remained the same at 13% in 2007.
Operating Profit:
Operating profit increased Rs. 1436.1 millions, or 111%, from Rs. 1299.4 millions in 2006 to Rs. 2735.5 millions in 2007. On a like to like basis, the same has gone up from Rs. 1317.2 millions to Rs. 2735.5 millions an increase of Rs.1418.3 millions or 108%. Revenues have outpaced incremental costs resulting in an improvement of operating margin from 19% in 2006 to 29% in 2007.
Financial Expenses:
Financial expenses increased by Rs. 49.2 millions or 35%. On a like to like basis, the same has gone up from Rs. 47.7 millions to Rs. 189.2 millions an increase of Rs.141.5 millions which is on account of higher interest cost during the year.
Depreciation and Amortisation:
Depreciation decreased by Rs. 63.4 millions, or 43%, from Rs. 148.5 millions to Rs. 85.2 millions.
On a like to like basis, the same has gone up from Rs. 76.1 millions to Rs.
85.2 millions an increase of Rs. 9.1 millions or 12%. Profit Before Tax and
Exceptional Items Profit before tax and exceptional items increased Rs.1450.2
millions or 143%, from Rs. 1011.0 millions in 2006 to Rs. 2461.2 millions in
2007.
On a like to like basis, the same has gone up from Rs. 1193.4 millions to Rs.
2461.1 millions an increase of Rs.1267.1 millions or 106%.
Exceptional Item:
Exceptional Item Rs. NIL millions.
Provision for Taxation:
Provision for taxation increased to Rs. 799.1 millions from Rs. 364.1 millions.
On a like to like basis, the same has gone up from Rs. 388.0 millions to Rs.
799.1 millions an increase of Rs. 411.1 millions or 106%. Effective Tax Rate works
out to 33% against 32% in the previous year.
Profit After Tax for the Period:
Profit after tax for the year increased to Rs. 1662.1 millions from Rs. 690.8 millions, an increase of 141%.
On a like to like basis, the same has gone up from Rs. 786.0 millions to Rs.
1662.1 millions an increase of Rs. 876.1 millions or 111% resulting in an
improvement of Net Profit margin from 11% in 2006 to 18% in 2007.
B. FINANCIAL POSITION:
Non-Consolidated Financial Position as on March 31, 2007 as compared to March 31, 2006.
Sources of Funds:
Share Capital,
Reserves and Surplus:
Equity Share Capital increased from Rs. 412.5 to Rs. 433.6 in 2007 on account of conversion of FCCBs. Change in Reserves and Surplus was on account of increase in Share Premium due to conversion of FCCBs at a premium of Rs. 196.2/share. This was partly offset by reduction in Share Premium account pursuant to scheme of Demerger of DCS business.
Loan Funds:
Total loan funds as on March 31, 2007 stood at Rs. 2540.5 millions down from Rs. 4842.1 millions. The main reason being conversion of FCCBs in to Equity.
Application of Funds:
Fixed Assets:
During the year, there was a decrease in its Fixed Assets (net) by Rs. 99.2 millions. This is on account of Demerger of assets of Direct Consumer Business to the tune of Rs. 272.9 millions partly compensated by addition on account of capitalization of software library during the year to the tune of Rs. 110.0 millions.
The Net Block decreased Rs. 143.3 millions from Rs. 1075.4 millions as on March
31, 2006 to Rs. 932.1 millions as on March 31, 2007.
Fixed Assets :
Ø
Land ( Leasehold )
Ø
Buildings
Ø
Plant and Machinery
Ø
Equipments
Ø
Furniture and Fixtures
Ø
Vehicle
Ø
Leasehold Improvements
OTHER INFORMATION:
|
CONTINGENT LIABLITIES |
31.03.2007 |
31.03.2006 |
|
|
(in Millions) |
|
|
Corporate
guarantees: - for
subsidiaries to the extent of loans availed/outstanding
Rs./Thousand 568418 (Nil) |
1315.500 |
0.000 |
|
|
|
|
|
- for other
related parties outstanding Rs./Thousand 4168565
(Rs./Thousand 911543) |
4604.250 |
1152.500 |
|
|
|
|
|
Bank/counter
guarantees outstanding (out of the
above bank guarantee of Rs. 2631000 has expired after the Balance Sheet Date) |
2637.200 |
0.250 |
|
|
|
|
|
(c) Claims against
the company not acknowledged as debts |
201.894 |
233.806 |
|
|
|
|
|
Disputed Direct
Taxes : |
117.215 |
95.807 |
|
|
|
|
|
(e) Disputed
Service Tax (Since Cancelled) |
0.000 |
295.180 |
|
|
|
|
|
(f) Letters of credit
(net of liability provided) |
94.069 |
47.602 |
|
|
|
|
|
(g) Uncalled
liability on shares partly paid |
20.000 |
20.000 |
|
|
|
|
|
(h) Legal cases
against the company |
Unascertainable |
Unascertainable |
|
|
|
|
|
(i) The loans transferred pursuant to the scheme of arrangement
continue to be secured against the Company's assets. The loans outstanding in
the books of transferee companies as on at March 31, 2007 is Rs. 945.272
millions. |
||
AS
PER WEBSITE
Zee Telefilms Limited (Zee) (BSE: ZEE.BO and NSE: ZEE.NS) is
India's largest vertically integrated media and entertainment company.
Zee has an integrated range of businesses, encompassing the
content-to-consumer value chain of media and entertainment business. Zee is a
pioneer in India, in every aspect of content aggregation and distribution
through satellite, cable and Internet.
Zee is
v The
largest producer and aggregator of Hindi programming in the world,
v With
more than 30,000 hours of original programming in the library
v One of
the most popular entertainment brands in India. It was ranked
v As the
ninth most popular brand within a decade of its launch
v The
largest MSO in India with an estimated reach of 6.5 million household
v One of
the largest Indian multiple distribution platforms with an estimated
v Reach
of 350 million viewers in over 120 countries globally including USA,
v Canada,
Europe, Africa, the Middle East, South East Asia, Australia and
v New
Zealand
Zee has many firsts to its credit
v First
listed media company in India
v First
to launch a Hindi general entertainment channel in India - Zee TV
v First
to launch a Hindi cinema channel in India - Zee Cinema
v First
to launch a 24 hour Hindi News Channel in India - Zee News
v First
to set up MSO operations at a national level - Siticable
v First
to corporatise the Hindi film industry - Gadar
v First
to launch a regional bouquet of channels - Zee Marathi, Zee Punjabi, Zee
Bangla, Zee Gujarati.
Business
Subject is the pioneer of satellite broadcasting in India
and is one of the first private-sector entrants to the Indian broadcasting
industry. It launched its flagship television channel Zee TV, in the year 1992.
Since then, it has transformed itself into an integrated media conglomerate
with operations spanning the entire media spectrum including television
programming; satellite broadcasting; cable distribution; production and
distribution of films; music publishing, long distance education and the
creation of animation software.
Zee
began with producing general entertainment content for the channel Zee TV
(primarily in Hindi), which was then broadcast through an associate company in
the South Asian region. The mass appeal of the Zee brand has continued to grow
and in 1999 it was voted the "ninth most popular brand" in India by A
and M magazine.
The company seeks to address the entertainment and
information needs of South Asians spread across the globe. Zee boasts its
presence in all major markets in the world, including Asia Pacific, the Middle
East, the United Kingdom, the United States of America, Africa, the Caribbean
Islands and Canada.
Key Milestones
2003:
v
Launched five
new channels for the DTH market viz Action Cinema, Classic Cinema, MX, Premiere Cinema and Smile TV
v
Entered into a
distribution tie-up with Rajshri Pictures for theatrical distriution of films
in India
Launched "Trendz"- A premium Fashion and Style channel, targeted at
the fashion conscious Indian consumer.
2002:
v
Acquired controlling
stakes in ETC Networks Limited and Padmalaya Telefilms Limited
2001:
v
Introduced Zee
TV and Zee News as pay television offerings "Gadar-Ek Prem Katha"
became highest grossing box office movie
2000:
v
First Cable company
in India to launch Internet over Cable services Entered into content
distribution joint ventures with MGM and Viacom Launched pay bouquet of
channels on the Asian foot print
1999:
v
Acquired News
Corp's 50% stake in joint ventures Launched regional channels
1998:
v
Launched Zee
TV in the US
v
Launched Zee
Cine Awards
1997:
v
Launched Zee
Music (originally known as Music Asia)
1996:
v
Started first
cable channel in India - Siti Channel
v
Launched Zee
TV, Africa
1995:
v
Commenced Siticable operations
v
Joint Venture
with News Corp
v
Launched Zee
News and Zee Cinema
v
Zee TV goes
global - Launched Zee TV, UK
1992:
v
Launched Zee
TV
v
Initial Public
offering of Zee Telefilms Limited
COMPANY FACTS
As India's first and
the country's largest fully integrated media and entertainment company,
Subject’s unique combination of businesses and growth opportunities both in
India and globally, give them a unique position in the global media space. From
Zee TV to Zee News, from the regional channels to Siticable, their Company
brings together the most valuable media brands, which will support their
commitment to deliver consistent growth.
Stock Exchange Listing
Equity Shares of the Company are listed on The National Stock Exchange
of India Limited (NSE), The Stock Exchange, Mumbai (BSE) and on The Kolkata
Stock Exchange Association Limited (CSE)
The Foreign
Currency Convertible Bonds (FCCB) of the Company are listed at The Singapore
Stock Exchange
Summary Financials (Indian GAAP -
FY2005)
Revenue INR
13.6 billion (US$ 291 million)
PAT for
the year INR 3.1
billion (US$ 70
million)
EPS INR
7.6 (US$
0.17)
Capital
Employed INR 30.0
billion (US$ 685
billion)
Zee Stock
INR 157.00 [4.00]
Dec
30,05 14:31 hrs IST
Awards
v
Subhash Chandra awarded the 'Global Indian Entertainment
Personality of the Year' by FICCI for 2004.
v
Subhash Chandra honoured with the "Dadasaheb Phalke
Academy Trophy" for his devoted services to Indian Film Industry in the
Satellite Sector - 2003.
v
Zee Telefilms was among the ten Indian Companies in the
Forbes
v
International 200 Small Best Companies selected from among
20,000 small companies worldwide for the year 2001.
v
Zee awarded "BSE Award for Maximisation of Shareholders
Wealth - 2000"
v
Subhash Chandra awarded "Entrepreneur of the Year"
by Ernst and Young in 1999
v
Subhash Chandra awarded "Businessman of the Year"
by Business Standard in 1999
v
Zee awarded "Emerging Company of the Year" by The
Economic Times in 1998
v
The EMMA Award for best digital/cable channel in the United
Kingdom for Zee TV by the UK Brand Summit
v
Zee TV UK was awarded the MACE (Multicultural Awards for
Competitiveness and Enterprise - Leadership in Best Practice) sponsored by the
UK Trade and Investment.
v
Zee awarded "Ground Breaker Award from Multi channel
News International for its achievements in developing programme networks and
related businesses"
v
In the Fifth Anniversary issue, Finance Asia, rated Zee
Telefilms as the Fourth best company in Asia and as one of the most successful
Asian Corporates in producing value for its shareholders.
ALLIANCEs
/ PARTNERSHIPs
To accomplish their mission of continued and sustainable
growth, in the addition to growing revenues organically they have sought
external growth opportunities through acquisitions, alliances and partnerships.
They have entered into joint ventures to gain access to content and technology
while they have acquired significant stakes in companies, which offered
complementary strengths to their Network.
Zee Turner
A 74:26 joint venture between Zee and Turner International
to distribute the Zee Turner pay channel bouquet in India and neighboring
countries.
ETC Networks
ETC Networks Limited (ETC.BO) is a media company listed on the
Bombay stock exchange operating two television channels, ETC Music and ETC
Punjabi in India. Zee acquired a 51% stake in June 2002.
Jagjit
Singh Kohli appointed as CEO of Siticable Network Limited.
Mumbai, October 3, 2005:
Zee Telefilms is pleased to appoint Mr. Jagjit Singh Kohli
as the CEO of Siticable Network Limited, a subsidiary of Zee Telefilms Limited.
In this capacity, Mr. Kohli will have the overall
responsibility for all revenues and territories of Siticable with a view to
develop business and maximize the revenue and collection from each territory.
Mr. Kohli will also develop major "triple play" and digitization of
cable initiatives for Siticable.
Mr. Jagjit Singh Kohli is a Cable Industry Veteran with 20
years of experience in various capacities. Mr. Kohli founded INCablenet and
pioneered the corporatisation of the Cable Industry and the MSO concept. In
1999, Mr.Kohli created WinCable (Hathway) for Raheja Group, which is now a
major national MSO besides Siticable and INCablenet
Siticable is the spearhead of Zee
Telefilms cable distribution business. There have been many developments in the
area of Regulation and Technology and Zee believes it is time to give cable
distribution a new thrust. Accordingly, Siticable is poised to pursue new
technology business with the renewed focus which will include" triple
play" offerings, digitization of cable broadband and other similar
initiatives that form the frontiers of cable today. Zee Telefilms is therefore
looking forward to reinvention of this business for substantial revenue and
enhancement.
Mr. Kohli will be operating out of Mumbai.
Dishtv
announces an innovative "Har Chhat Par" offer for subscribers
Dishtv "Har Chhat Par" offer only at Rs 3,990
Mumbai, April 25 2005: India's first Direct to Home
(DTH) service dishtv, which promises to deliver the future of television to
Indian homes, announced an irresistible offer with their innovative "Har
Chhat Par" scheme. dishtv is offering an exciting range of programming
choice with access to more than 74 television channels and 13 radio channels,
which include a wide variety of programming for every taste. All this is being
delivered with state-of-the-art satellite technology at an incredible price of
Rs 3,990.
Dishtv "Har Chhat Par" scheme gives consumers more
than 86 channels for Rs 3,990, which includes the cost of a digital set top
box, satellite dish antenna, installation fees and subscription charges for one
year. This special offer is available at all authorized outlets of dishtv
across the country and is open for a limited period.
The scheme was launched on April 10 and has received
excellent response. Mr. Rajiv
Garg, Director, ASC Enterprises Limited, said "Subscribers can now
experience the revolution of DTH at an extremely affordable price. For a
digital satellite television platform, dishtv at Rs 3,990, offers terrific
value with an incredible selection of wide variety of programming, plus a
hassle-free service. The "Har Chhat Par" offer from dishtv is
positioned to satisfy all who want freedom of choice, excitement of digital
quality entertainment and interactive value added services, and at a cost of
less than Rs 11 per day."
Under the dishtv 3,990 scheme,
customers get the hardware - the dish and the set top box - installed at their
home without any additional charge. The "Har Chhat Par" offer
includes one year's subscription fee for the Dish Welcome package. The package
comprises of a total of 77 channels, which include general entertainment,
movies, music, news, sports as well as religious programmes. Popular channels
like Zee TV, Zee Cinema, ESPN, Star Sports, CNN, Cartoon Network etc are part
of the offering. For only Rs 1,000 extra, the package offered can be expanded
to include other popular channels such as additional movie channels, additional
sports channels, Pogo, HBO, Zee Studio, Zee Café etc. The dishtv platform thus
allows customers a wide choice of viewership and the ability to pay only for
what he wants to watch.
Subscribers also get to choose an additional group of
channels in their regional language. So viewers can now enjoy channels in
Punjabi, Bangla, Gujarati, Marathi, Oriya, Telegu, Tamil, Malayalam and
Kannada, along with the Hindi and English programmes. Another additional
feature is 13 radio channels that comes along with the "Har Chhat
Par" offer.
Direct-to-Home or DTH, the preferred method of watching television
throughout the world, is targeted at discerning Indians who demand highest
available quality of television viewing as well as at areas which do not have
cable television. Installing a dishtv gives the viewers DVD picture quality and
stereophonic sound. A huge plus is the guarantee of absolutely no interruptions
in the transmission due to disputes with broadcasters as dishtv is a
transparent platform.
The dishtv hardware includes a
world class Set Top Box which comes with a warranty from the company. Also, in
case of any service requirements, a 24 hour helpline is available to all dishtv
customers. dishtv has steadily moved towards world class standards of service
with a full scope back office providing subscriber management services.
About dish TV
Dish TV is India's first Direct-to-Home (DTH) satellite
television entertainment service that will revolutionize TV viewing in the
country. The cutting edge technology of Dish TV allows subscribers to access a
variety of digital television channels directly from the satellite, making
television viewing a whole new experience.
With a total offering of 113 TV and 13 radio channels, Dish
TV brings the power of choice to consumers, who get to experience digital
entertainment in their language, in packages that suit their preference and to
fit their budget.
Dish TV is an Essel Group venture. The Essel Group, whose
foundation was laid way back in 1976, has metamorphosis into a conglomerate
embracing new technology and versatile forms of entertainment. It has a vast
range of national and global business interests that include media programming,
broadcasting and distribution, packaging, entertainment, online gaming and
telecom.
CMT REPORT
(Corruption, Money Laundering and Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial Crime
:
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or investigation
registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.73 |
|
UK Pound |
1 |
Rs.77.01 |
|
Euro |
1 |
Rs.57.34 |
SCORE and RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
--- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial and operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable and favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|