MIRA INFORM REPORT

Report Date :

01.09.2014

IDENTIFICATION DETAILS

Name :	ENTERTAINMENT NETWORK (INDIA) LIMITED
Registered Office :	4^th Floor, A Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel, Mumbai - 400013, Maharashtra
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	24.06.1999
Com. Reg. No.:	11-120516
Capital Investment / Paid-up Capital :	Rs. 476.704 Millions
CIN No.: [Company Identification No.]	L92140MH1999PLC120516
TAN No.: [Tax Deduction & Collection Account No.]	MUME03661A
PAN No.: [Permanent Account No.]	AAACE796G
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged in FM Radio Broadcasting Business.
No. of Employees :	733 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (64)

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 23200000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a subsidiary of “TIMES INFOTAINMENT MEDIA LIMITED”. It is a well-established company having fine track record. The rating reflects strong financial risk profile supported by strong liquidity position and decent profitability of the company. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2014.

INFORMATION DENIED

MANAGEMENT NON CO-OPERATIVE 991-22-67536983)

LOCATIONS

Registered Office :	4^th Floor, A Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel, Mumbai - 400013, Maharashtra, India
Tel. No.:	Not Available
Fax No.:	Not Available
E-Mail :	n.subramanian@timesgroup.com   dalpatraj.jain@timesgroup.com mehul.shah@timesgroup.com business@radiomirchi.com
Website :	http://www.enil.co.in
Corporate Office :	Trade Gardens, Ground Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400013, Maharashtra, India
Tel. No.:	91-22-67536983
Fax No.:	91-22-67536800
Studios :	Located at: · Ahmedabad Aurangabad Bengaluru Bhopal Chennai Coimbatore Delhi Hyderabad Indore Jabalpur Jaipur Jalandhar Kanpur Kolhapur Kolkata Lucknow Madurai Mangalore Mumbai Nagpur Nashik Panjim Patna Pune Raipur Rajkot Surat Thiruvananthapuram Vadodara Varanasi Vijaywada Visakhapatnam

DIRECTORS

As on 31.03.2014

Name :	Mr. Vineet Jain
Designation :	Chairman
Name :	Mr. A. P. Parigi
Designation :	Director
Date of Birth/Age :	15.07.1949
Qualification :	Master degree in Business Administration from the Faculty of Management Studies, University of Delhi and also holds a Bachelor degree in Economics and a Master degree in Sociology from the Delhi School of Economics.
Date of Appointment :	01.10.2009
Other Directorship :	Bennett, Coleman And Company Limited, Times Infotainment Media Limited, Times Innovative Media Limited, Alternate Brand Solutions (India) Limited, Times Global Broadcasting Company Limited, Artha Financial Services Limited, Accel Media Ventures Limited, Accel Frontline Limited, Worldwide Media Private Limited, Appglow Management Private Limited. Foreign Companies: TIML Global Limited, TIML Golden Square Limited, TIML Radio Holdings Limited, TIML Radio Limited, One Golden Square Creative Limited, TIML Digital Radio Limited.
Name :	Mr. B. S. Nagesh
Designation :	Director
Date of Birth/Age :	12.04.1959
Qualification :	A degree of Masters in Management Studies from the Banaras Hindu University
Date of Appointment :	14.08.2012
Other Directorship :	Shoppers Stop Limited, Marico Industries Limited, Hypercity Retail (India) Limited, Nagesh (BSN) Consults Private Limited
Name :	Mr. N. Kumar
Designation :	Director
Date of Birth/Age :	28.01.1950
Qualification :	Engineering Graduate in Electronics and Communication from Anna University, Chennai.
Date of Appointment :	05.11.2005
Other Directorship :	Bharti Infratel Limited, Bharti Infratel Ventures Limited, Times Innovative Media Limited, MRF Limited, Take Solutions Limited, Mphasis Limited, eG Innovations Private Limited, eG Innovations Pte Limited, Madhura Kumar Properties Private Limited, N. K. Trading & Consultancy Private Limited, Cubbon Road Properties Private Limited, Nani Palkhivala Arbitration Centre (Sect. 25 Company), Singapore India Partnership Foundation (Sect. 25 Company).
Name :	Mr. Ravindra Dhariwal
Designation :	Director
Name :	Mr. Ravindra Kulkarni
Designation :	Director
Name :	Mr. Richard Saldanha
Designation :	Director
Name :	Ms. Vibha Paul Rishi
Designation :	Director
Date of Birth/Age :	19.06.1960
Qualification :	An alumnus of FMS, Delhi
Date of Appointment :	14.08.2012
Other Directorship :	Future Venture India Limited
Name :	Mr. Prashant Panday
Designation :	Executive Director and Chief Executive Officer
Date of Birth/Age :	08.07.1965
Qualification :	Post Graduate Diploma in Management from Indian Institute of Management, Bangalore and Degree of B.E. Electronics and Communication – Gujarat University.
Date of Appointment :	01.07.2010
Other Directorship :	Alternate Brand Solutions (India) Limited, Member of the Board of Governors of Market Research Users Council.

KEY EXECUTIVES

Name :	Mr. Mehul Shah
Designation :	SVP - Compliance and Company Secretary
Management Team :	· Prashant Panday - Maaging Director and CEO N. Subramanian - Group Chief Financial Officer Hitesh Sharma - Chief Operating Officer Tapas Sen - Chief Programming Officer Sujata Bhatt - Chief Marketing Officer and Head of HR Mahesh Shetty - Chief Strategy Officer and RD - (North and East) Anand Parameswaran - Chief Business Officer and RD - (South) Yatish Mehrishi - EVP and RD - (West and Central) GG Jayanta, EVP – Marketing Rahul Balyan - EVP - Digital Vanditta Malhotra Hegde - SVP and Legal Head

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2014

Category of Shareholder	Total No. of Shares	% of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	33918400	71.15
Sub Total	33918400	71.15
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	33918400	71.15
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	943844	1.98
Financial Institutions / Banks	1239	0.00
Foreign Institutional Investors	7823986	16.41
Sub Total	8769069	18.40
(2) Non-Institutions
Bodies Corporate	2283394	4.79
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	1302515	2.73
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	1271320	2.67
Any Others (Specify)	125717	0.26
Non Resident Indians	117859	0.25
Trusts	86	0.00
Clearing Members	7772	0.02
Sub Total	4982946	10.45
Total Public shareholding (B)	13752015	28.85
Total (A)+(B)	47670415	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	47670415	0.00

BUSINESS DETAILS

Line of Business :	Subject is engaged in FM Radio Broadcasting Business.
Brand Name :	‘RADIO MIRCHI’

GENERAL INFORMATION

No. of Employees :	733 (Approximately)
Bankers :	HDFC Bank Limited

Banking Relations :	--
Auditors :
Name :	Price Waterhouse And Company Chartered Accountants
Address :	Bangalore, Karnataka, India
Legal Advisors :	· Mrs. Pratibha M. Singh, Singh And Singh Law Firm LLP Halai And Company, Advocates And Legal Consultants
Ultimate Holding Company :	¨ Bennett, Coleman and Company Limited (BCCL)
Holding Company :	¨ Times Infotainment Media Limited (TIML)*
Subsidiary Company :	¨ Alternate Brand Solutions (India) Limited (ABSL)*
Fellow Subsidiary Companies :	¨ Times Innovative Media Limited (TIM) ¨ TIM Delhi Airport Advertising Private Limited (TIMDA) ¨ Times Internet Limited (TIL) ¨ Times Global Broadcasting Company Limited (TGBCL) ¨ Times Business Solutions Limited (TBSL) ¨ Metropolitan Media Company Limited (formerly Times VPL Limited) (MMCL) ¨ Vardhaman Publishers Limited (VPL) ¨ Times Websol Limited (TWL) ¨ Times Mobile Limited (TM) ¨ Brand Equities Treaties Limited (BETL) ¨ Worldwide Media Private Limited (WWM) ¨ BCCL International Events Private Limited (BIEPL) ¨ Times Centre for Learning Limited (TCLL)
Other Related Parties :	¨ Bennett Property Holdings Company Limited (BPHCL) ¨ Aegon Religare Life Insurance Company Limited (ARLIC)

NOTE: * There are no transactions during the year.

CAPITAL STRUCTURE

As on 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
120000000	Equity Shares	Rs. 10/- each	Rs. 1200.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
47670415	Equity Shares	Rs. 10/- each	Rs. 476.704 Millions

NOTES:

(a) Terms attached to equity shares

The Company has only one class of equity shares. Each shareholder is eligible for one vote per share held. The par value per share is Rs.10. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing annual general meeting

(b) Shares held by Holding company and Ultimate holding company

Particulars	No of Shares
i) Equity Shares of Rs. 10 each held by Times Infotainment Media Limited, the Holding Company.	30526560
ii) Equity Shares of Rs. 10 each held by Bennett, Coleman & Company Limited, the Ultimate Holding Company.	3391840

(c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the company

Name of Shareholders	No of Shares	% of Holding
i) Times Infotainment Media Limited, the Holding Company	30526560	64.04%
ii) Bennett, Coleman & Company Limited, the Ultimate Holding Company.	3391840	7.12%
iii) SBI Life Insurance Company Limited.	2119098	4.45%

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	476.704	476.704	476.704
(b) Reserves & Surplus	5325.049	4546.332	3925.393
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	5801.753	5023.036	4402.097
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	0.000	36.617	97.906
(c) Other long term liabilities	42.519	37.895	0.000
(d) long-term provisions	50.234	42.665	38.223
Total Non-current Liabilities (3)	92.753	117.177	136.129
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	0.000
(b) Trade payables	530.504	409.820	420.069
(c) Other current liabilities	85.755	104.552	102.057
(d) Short-term provisions	237.117	241.380	89.511
Total Current Liabilities (4)	853.376	755.752	611.637
TOTAL	6747.882	5895.965	5149.863
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	490.591	706.637	586.491
(ii) Intangible Assets	424.309	496.851	910.847
(iii) Capital work-in-progress	1.112	0.000	0.912
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	1030.260	81.141	80.250
(c) Deferred tax assets (net)	42.316	0.000	0.000
(d) Long-term Loan and Advances	118.378	117.625	128.725
(e) Other Non-current assets	65.651	65.651	73.656
Total Non-Current Assets	2172.617	1467.905	1780.881
(2) Current assets
(a) Current investments	3313.910	3097.154	1770.069
(b) Inventories	0.000	0.000	0.000
(c) Trade receivables	1015.610	994.068	922.403
(d) Cash and cash equivalents	137.645	122.376	443.253
(e) Short-term loans and advances	102.660	200.746	220.086
(f) Other current assets	5.440	13.716	13.171
Total Current Assets	4575.265	4428.060	3368.982
TOTAL	6747.882	5895.965	5149.863

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Income	3848.098	3383.877	3014.253
		Other Income	223.559	169.732	115.222
		TOTAL	4071.657	3553.609	3129.475
Less	EXPENSES
		Production expenses	171.124	154.294	146.332
		License fees	202.410	180.920	152.015
		Employee benefits expense	752.245	735.555	628.605
		Other expenses	1472.477	1271.033	1080.416
		TOTAL	2598.256	2341.802	2007.368
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		1473.401	1211.807	1122.107
Less	FINANCIAL EXPENSES		0.340	0.162	0.014
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		1473.061	1211.645	1122.093
Less/ Add	DEPRECIATION/ AMORTISATION		318.108	317.201	324.625
	PROFIT/ (LOSS) BEFORE TAX		1154.953	894.444	797.468
Less	TAX		320.463	217.733	232.373
	PROFIT/ (LOSS) AFTER TAX		834.490	676.711	565.095
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		2661.115	2040.176	1475.081
Less	APPROPRIATIONS
		Proposed dividend (including dividend distribution tax)	55.772	55.772	0.000
	BALANCE CARRIED TO THE B/S		3439.833	2661.115	2040.176
	EARNINGS IN FOREIGN CURRENCY
		Consultancy services	43.398	37.468	13.164
	TOTAL EARNINGS		43.398	37.468	13.164
	IMPORTS
		Capital Goods	5.032	1.983	2.668
	TOTAL IMPORTS		5.032	1.983	2.668
	Earnings / (Loss) Per Share (Rs.)		17.51	14.20	11.85

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	20.50	19.04	18.06
Net Profit Margin (PBT/Sales)	(%)	30.01	26.43	26.46
Return on Total Assets (PBT/Total Assets}	(%)	20.35	15.38	15.73
Return on Investment (ROI) (PBT/Networth)		0.20	0.18	0.18
Debt Equity Ratio (Total Debt/Networth)		0.00	0.00	0.00
Current Ratio (Current Asset/Current Liability)		5.36	5.86	5.51

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	476.704	476.704	476.704
Reserves & Surplus	3925.393	4546.332	5325.049
Net worth	4402.097	5023.036	5801.753
long-term borrowings	0.000	0.000	0.000
Short term borrowings	0.000	0.000	0.000
Total borrowings	0.000	0.000	0.000
Debt/Equity ratio	0.000	0.000	0.000

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Revenue from Operations	3014.253	3383.877	3848.098
		12.263	13.719

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Revenue from Operations	3014.253	3383.877	3848.098
Profit	565.095	676.711	834.490
	18.75%	20.00%	21.69%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	Yes
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	-----
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

LITIGATION DETAILS

HIGH COURT OF BOMBAY

CASE DETAILS

BENCH: BOMBAY

Lodging No: ARBPL/343/2012 Filing Date: 03.03.2012 Reg. No.: ARBP/341/2012 Reg. Date: 20.03.2012

Petitioner: THE INDIAN PERFORMING RIGHT SOCIETY Respondent: ENTERTAINMENT NETWORK

(INDIA) LIMITED

Adv:- SANDEEP V. MARNE() Resp. Adv.: MULLA AND MULLA AND C.B.

AND C (1) ()

District: MUMBAI

Bench: SINGLE

Status: Admitted (Ready) Category: ARBITRATION ACT.

Next Date:- 28.08.2014 Stage:- ARBP FOR HEARING AND FINAL

DISPOSAL

Coram:- HON’BLE SHRI JUSTICE A.A.SAYED

Last Date: 21.08.2014 Stage: ARBP FOR HEARING AND FINAL

DISPOSAL U/S 34

Last Coram: HON’BLE SHRI JUSTICE A.A.SAYED

Act: arbitration and Conciliation Act 1996 Under Section:- 34

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10062091	27/07/2007	650,000,000.00	The Hongkong and Shanghai Banking Corporation Limited	52/60, Mahatma Gandhi Road, Mumbai 400 001, Mumbai, Maharashtra - 400001, INDIA	A19958446
2	10039746	07/12/2009 *	300,000,000.00	KOTAK MAHINDRA BANK LIMITED	36-38A, NARIMAN BHAVAN, 227, D, NARIMAN POINT, MUMBAI, Maharashtra - 400021, INDIA	A75777524

* Date of charge modification

COMPANY INFORMATION

Subject is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company was incorporated on June 24, 1999. The Company operates FM radio broadcasting stations in 32 Indian cities under the brand name ‘Radio Mirchi’.

The Company’s principal revenue stream is advertising. Advertising revenues are generated through the sale of air time in the Company’s FM radio broadcasting stations.

FINANCIAL PERFORMANCE

The Company retained its position as the market leader in Private FM Radio Broadcasting Industry. Total income of the Company increased from Rs. 3553.609 millions during the previous year to Rs. 4071.657 millions during the year. Profit after tax was higher at Rs. 834.489 millions.

MANAGEMENT DISCUSSION AND ANALYSIS

MEDIA INDUSTRY STRUCTURE AND DEVELOPMENTS

World Economy is expected to improve further IMF’s World Economic Outlook released in April 2014 mentions that the world economy is poised to grow from 3% in 2013 to 3.6% in 2014 and 3.9% in 2015. In advanced economies, growth is expected to increase to about 2¼% in 2014–15 an improvement of about one percentage point compared with 2013.

Growth will be strongest in the United States at about 2¾%. Growth is projected to be positive but varied in the euro area: stronger in the core, but weaker in countries with high debt (both private and public) and financial fragmentation, which will both weigh on domestic demand.

In emerging market and developing economies, growth is projected to pick up gradually from 4.7% in 2013 to about 5% in 2014 and 5¼% in 2015. Growth will be helped by stronger external demand from advanced economies, but tighter financial conditions will dampen domestic demand growth. In China, growth is projected to remain at about 7½% in 2014 as the authorities seek to rein in credit and advance reforms while ensuring a gradual transition to a more balanced and sustainable growth path1.

Indian Economy – limping back to normalcy

In February 2014, the Finance Minister’s Interim budget speech pegged the Indian GDP growth at 4.9% in 2013 14. He asserted that the economy is more stable today than what it was two years ago. To quote from the Finance Minister’s speech:

“…The fiscal deficit is declining, the current account deficit has been contained, inflation has moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased, and hundreds of projects have been unblocked….”

The IMF forecasts a growth of 5.4% in 20142, while the World Bank projects growth to be over 6% in the 2014-15 fiscal year, and then to increase to 6.6% in FY2015-163. “India’s growth is expected to recover from 4.4% in 2013 to 5.4% in 2014, supported by slightly stronger global growth, improving export competitiveness and implementation of recently approved investment projects”, the latest edition of the World Economic Outlook released by the International Monetary Fund (IMF) said. It further added “For India, real GDP growth is projected to strengthen to 5.4% in 2014 and 6.4% in 2015, assuming that government efforts to revive investment growth succeed and export growth strengthens after the recent rupee depreciation,”

In a similar vein, the World Bank said in its latest edition of 'South Asia Economic Focus' in April: "Bolstered by permanently more competitive exchange rate and progress towards clearance of important investment projects, India may see an acceleration of growth in FY2014 to 4.8%, further increase to 5.7% in FY2015.”

RADIO INDUSTRY – FUTURE OUTLOOK

PHASE 3 POLICY OF FM RADIO EXPANSION:

There are many reasons for the FM industry to look forward to the Phase-3 expansion. As mentioned earlier, one is that this would be the first time since 2006 when new markets and new spectrum would be offered for growth. Another reason is that with smaller markets being opened up, radio will finally be able to compete with local newspapers for a larger share of retail advertising. Yet another reason, of course, is that there will be an opportunity for larger players like them to consolidate.

The salient features of the Phase 3 policy are:

a. Multiple Frequencies

b. License Period

c. Tradability of Licenses

d. Networking

e. News and Current Affairs allowed

a. MULTIPLE FREQUENCIES:

The Phase-2 policy only allows a radio company to operate one channel in a market. This severely restricts their ability to target different segments of the population via different channels. For example, in the city of Mumbai where Mirchi is a contemporary Hindi music station, they would like to offer other channels like a Marathi music station, a retro Hindi music station, an English music station, a youth - or even a news / talk / sports - station. However, this is not currently permitted. No such restriction exists on TV broadcasters or newspaper companies. They can launch a product as and when required, with minimal governmental permission. Fortunately, Phase-3 policy changes this. The policy allows a broadcaster to operate up to 40% of the licenses available in a city, subject to a minimum of three different broadcasters being present in the city.

In addition to launching new products and tapping into new markets, this amendment provides an opportunity to the Company to acquire other existing broadcasters who might be interested in divesting their stakes. This amendment will thus help the Company expand both organically (through new licenses) and inorganically (through MandA opportunities). For the Company, expanding within the big cities is a priority. ENIL expects to take advantage of this policy measure.

b. LICENSE PERIOD:

The license period of Phase 3 frequencies has been increased to 15 years, compared to 10 years for Phase-2 licenses. This is a progressive change for several reasons. First, as the experience of the last several years has shown, the advertising industry is vulnerable to the vagaries of the economy. Since the Lehman crisis broke in late 2008, the advertising industry in India has been badly affected. Its growth rate has come down. Pricing of ad spots has declined by nearly 30%. And the balance of powers has shifted into the hands of the buyers (advertisers/agencies). In a ten year license, it is extremely difficult to recover from such downturns and recoup losses. Second, the certainty of a longer license period allows broadcasters to invest more in brand building, and take risks with experimentative programming content. This helps provide more content diversity to the market and grow faster. Third, the entire process of renewals creates uncertainty and anxiety, and the less often it is done, the better it is. ENIL welcomes this policy initiative.

c. TRADABILITY OF LICENSES:

The current policy allows a broadcaster to sell off its stake in a radio company only after five years of operationalization. Such a restriction doesn’t exist in any other media business. The Phase 3 policy reduces this period to three years. They welcome this amendment since it will help broadcasters take quick decisions on when to exit the industry or expand within it.

d. NETWORKING:

Phase-3 allows a far more liberal definition of networking compared to what Phase-2 policy allowed. Networking basically refers to linking a small station with a bigger one so that the same content can play on both stations. For the smaller station, this helps cut costs - capex as well as opex. Most of the Phase-3 towns would not be feasible if networking were not allowed. Fortunately, the Phase-3 policy allows full-scale networking, which means all stations, big or small, can be linked to each other with minimal restrictions. In Phase-2, only small stations (category C and D) were permitted to network with each other. The Company has always supported this change in policy.

e. NEWS AND CURRENT AFFAIRS:

Phase-2 policy does not allow radio broadcasters to do news and current affairs. This is a blatantly unfair and discriminatory restriction, since no other medium is subject to such restrictions. In fact, this arbitrary restriction has been challenged via a PIL filed in the Hon'ble Supreme Court in October 2013 by NGO Common Cause. The SC has issued notices to the Central Government. Unfortunately, the Phase-3 policy only marks a minor improvement over the provision of Phase-2. It allows private broadcasters to take news feeds from All India Radio (AIR) and rebroadcast the same. This is completely bizarreas all it will do is "amplify" the news bulletins of AIR. It is also against the government's stated objective of encouraging "plurality" of viewpoints. The Company has been urging the government to open up news and current affairs completely. It welcomes the partial opening up, but hopes that the policy will be soon amended to allow full-scale news broadcasts.

FIXED ASSETS

Tangible Assets

œ Land – Leasehold

œ Building

œ Leasehold Improvements

œ Office Equipments

œ Computers

œ Furniture and Fixtures

œ Motor Vehicles

Intangible Assets

œ Goodwill

œ Computer Softwares

œ Migration Fees

œ One Time Entry Fees

UNAUDITED RESULTS FOR THE QUARTER AND ENDED ON 30^TH JUNE, 2014

(Rs. In Millions)

		Particulars	Quarter ended 30.06.2014
1	Income from Operations
	a) Net Sales / Income from Operations		917.934
	b) Other Operating Income		14.627
	Total Income from Operations (Net)		932.561
2	Expenses
	a)	Production expenses	41.263
	b)	License fees	46.487
	c)	Employee benefits expense	204.056
	d)	Depreciation and Amortisation expenses	81.966
	e)	Marketing Expenses	120.329
	f)	Other Expenses	171.451
	Total Expenses		665.552
3		Profit /(Loss) from operations before other income, finance costs and exceptional items (1-2)	267.009
4	Other Income		71.484
5		Profit /(Loss) from ordinary activities before finance costs and exceptional items (3+4)	338.493
6	Finance Costs		0.167
7		Profit /(Loss) from ordinary activities after finance costs but before exceptional items (5-6)	338.326
8	Exceptional Items		--
9	Profit /(Loss) from ordinary activities before tax		338.326
10	Tax Expense		95.281
11	Net Profit /(Loss) from ordinary activities after tax (9-10)		243.045
12	Extraordinary items (net of tax expense)		--
13	Net Profit /(Loss) for the period (11-12)		243.045
14	Paid up equity share capital (Eq. shares of Rs.10/- each)		476.704
15	Reserve excluding revaluation reserves		--
16		Earnings per share (before/after extraordinary items) of Rs.10/- each
		Basic	5.10
		Diluted
A		PARTICULARS OF SHAREHOLDING
1		Public Shareholding
		- No. of Shares
		- Percentage of Shareholding
2		Promoters and promoter group shareholding
		a) Pledged/Encumbered
		- Number of shares
		- Percentage of shares ( as a % of the total shareholding of the promoter and promoter group)
		- Percentage of shares (as a % of the total share capital of the Company)
		b) Non- encumbered
		- Number of shares
		- Percentage of shares ( as a % of the total shareholding of the promoter and promoter group)
		- Percentage of shares (as a % of the total share capital of the Company)

	Particulars		Quarter ended 30.06.2014
B		Investor Complaints
		Pending at the beginning of the quarter	Nil
		Received during the quarter	Nil
		Disposed during the quarter	Nil
		Remaining unresolved at the end of the quarter	Nil

1) The Company is engaged in only one segment i.e. Radio Broadcasting Business. Consequently, there is no other reportable segment. The Company caters to the needs of the domestic market and hence there are no reportable geographical segments.

2) The above results were reviewed by the Audit Committee and were thereafter approved by the Board of Directors at their meeting held on August 12, 2014. The above standalone financial results for the quarter ended June 30, 2014 have been subject to a "Limited Review" by the statutory auditors of the Company, as per the listing agreement entered into with the stock exchanges in India.

3) Tax expense for the quarter / year ended March 31, 2014 was net of Rs. 0.256 Millions of excess provision in respect of earlier years and written back.

4) The company has revised depreciation rates on fixed assets w.e.f April 01, 2014 as per the useful life specified in the schedule II of the companies Act, 2013 or as re-assessed by the company. As prescribed said schedule II of the Act, an amount of Rs. 58.324 millions has been charged to the opening balance of retained earning for the assets. Had the company continued with the previously applicable schedule XIV rates as per companies Act, 1956, charge for depreciation for the current quarter ended June 30, 2014 would have been lower by Rs. 3.566 Millions, and the profit before tax for the quarter would have been higher by the same amount.

CMT REPORT (Corruption, Money Laundering & 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 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.60.47
UK Pound	1	Rs.100.35
Euro	1	Rs.79.86

INFORMATION DETAILS

Information Gathered by :	GYT
Analysis Done by :	KAR
Report Prepared by :	ANK

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		64

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 & 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	Capability to overcome financial difficulties seems comparatively below average.	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
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.