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transparency and implementation of best corporate governance practices. The Company’s corporate values has been and will be driven by product and service excellence, customer focus, creativity, integrity and growth. Zee has also undertaken a corporate restructuring exercise with a view to streamline its businesses, improve operating efficiencies and to further rationalise its unprofitable operations in line with its strategic objectives. In addition, Zee believes that it has instituted robust systems and processes to ensure high standards of transparency and corporate governance, including the introduction of independent directors to its Board and the establishment of an Audit Committee, a Remuneration Committee and a Share Transfer and Investor Grievance Committee. INDIAN MEDIA SECTOR Broadly the Indian media & entertainment Industry consists of the following segments – films, television, music, live events and radio. Zee has a presence in all these segments except radio. Television broadcasting and content production is the core business of Zee. Zee Network is the broadcaster of a number of Hindi, English and Regional language channels both in India and many countries across the globe. 1. Indian Television Industry The Indian TV market comprises approximately 85 million households. Television remains the most popular media channel for Indian households and the favourite form of media entertainment for the Indian population, compared to press, cinema, and radio. The market has experienced significant growth since the industry was deregulated in 1992. Despite this strong growth, TV penetration stands at approximately 45% of households, much lower than that of developed markets. urthermore, television as a form of entertainment is cheap relative to other markets (Rs. 200 per month in India compared to an estimated R.s. 1,500 (USD 35) per month in the US. With rising income levels, increasing access to electricity (especially in rural areas), falling prices for television sets and the continued delivery of quality content, Indian TV penetration is expected to continue to increase over the coming years. The television market is divided into three categories: Terrestrial Television, Cable Television and Direct to Home Broadcasting. a. Terrestrial Television - The state-run monopoly Doordarshan is the only terrestrial broadcaster in India. Doordarshan was formed in 1959. Doordarshan has installed transmitters nation-wide for terrestrial broadcasting and today offers viewers a total of 19 channels comprising two national channels, 14 regional channels and three international channels. ZEE TELEILMS LIMITED b. Cable Television - The Indian Cable Television industry originated in the mid-1980s when entrepreneurs began wiring households to offer local video channels. The current structure of the Indian Cable Television industry can be divided into four layers -– broadcasters, MSOs, local cable operators and end user households. Broadcasters transmit the channels via satellite signals. MSOs are wholesale content distributors and are mainly cable TV companies, which receive broadcast signals from satellites at their headends and further distribute them to various smaller regional and local cable operators. Local cable operators are small content distributors with regional or local coverage who own and control the last mile connection to the households within their operating area. They receive content from MSOs and distribute them to the end user households, which are the fourth and bottom layer of the industry. The households, or viewers, pay monthly cable charges, determined by the local cable operators, for receiving Cable Television service in their homes. Over the last decade, the cable industry has evolved into a highly fragmented structure. There are approximately 30,000 local cable operators across India, and this large and unregulated layer contributes to the fragmented nature of the Indian Cable Television industry. This fragmented industry structure gives rise to a significant lack of accountability, particularly at the local cable operator level. It is believed that local cable operators generally engage in material under-declaration of subscriber numbers making it difficult for broadcasters to obtain a meaningful share of pay revenues. Recent regulatory developments relating to the Cable Television industry Conditional Access System. In 2002, the Cable Television Networks (Regulation) Amendment Act (‘‘Cable Television Amendment Act’’) was passed. This amendment seeks to regulate the transmission of pay television by a local cable operator through a system known as the CAS. Currently, local cable operators under declare their subscriber base to MSOs and broadcasters, meaning that local cable operators retain the majority of subscription revenues received from viewers. After the implementation of CAS, subscribers will need to install set-top boxes in their homes in order to receive cable TV channels, thus adding transparency in the number of households receiving a particular channel and also provide pricing ability for subscription to individual channels. This is expected to allow broadcasters to receive a larger share of subscription revenues and is expected to shift the revenue profile of broadcasters away from advertising-based revenues, which dominates the Indian satellite broadcast landscape currently.
In January 2003 the Government of India notified that CAS should be made effective in Chennai, Mumbai, Kolkata and Delhi by July 14, 2003. The time period for CAS implementation was subsequently deferred to September 1, 2003, when the Government of India made it mandatory for a zone-wise roll-out of CAS in Delhi, Mumbai, Kolkata and Chennai, to be completed by December 1, 2003. By a further notification in August 2003, Delhi was excluded for the implementation of CAS. The notification of August 2003 has been challenged by way of various writ petitions. Chennai was the only city that rolled out CAS on the September 1, 2003 deadline. In December 2003, CAS was rolled out in South Delhi. The Government by a notification dated ebruary 27, 2004 suspended the implementation of CAS until further notification. However, pursuant to a petition by certain MSOs and industry participants challenging the ebruary 27, 2004 notification, the High Court of Madras by an order dated March 4, 2004 granted an interim stay of the implementation of the ebruary 27, 2004 notification. Telecom Regulatory Authority of India. On January 9, 2004, Government of India announced that broadcasting and cable services would be regulated by the TRAI. The TRAI has been entrusted with power to recommend terms and conditions on which the cable and broadcasting services will be provided to customers, the parameters for regulating maximum time for advertisements in pay channels as well as other channels, and to specify standard norms for, and frequency of revision of, rates of pay channels, including interim measures. The TRAI recently published a consultation paper to seek industry feedback to help it evolve policies for the orderly growth of the industry. As an interim measure, it has frozen all rates charged by all industry participants to the levels prevailing as of December 26, 2003, throughout the country. The TRAI has set up a committee with representatives from state governments to frame the regulations and also examine various related issues including the prices of individual pay channels vis-à-vis bouquet of channels and promotion of competition in the television distribution business through the introduction of DTH and broadband services. c. Direct to Home Broadcasting - The Government of India in January 2001 decided to permit Direct to Home television service in the Ku Band in India, thereby withdrawing the previous prohibition on the reception and distribution of television signal in the Ku Band. DTH enables a television broadcaster to deliver broadcast signals directly to individual customers using a satellite dish, without passing through intermediary local cable operators. 35 Broadcasters use satellites to beam digitally compressed signals that subscribers receive with a dish. A set top receiver is then used to decode and decompress the signals received. The quality of television signals distributed using the DTH platform is generally significantly superior to the present form of distribution through cable. In addition, given that DTH would be accessible even in remote areas where the cable network’s limitations may make the system expensive or technically unacceptable, more subscribers will have access to channels and programming through DTH. The principal sources of revenue for television networks are advertisement and subscription. During the year, share of advertisement in the broadcast industry in India was far higher than that of subscription. In most economies, particularly those with well-developed C&S markets, subscription revenues account for a greater share of the revenue pie than advertisement revenues. 2. Indian ilm Industry The Indian film industry is over 100 years old with the first commercially successful film produced in 1913. Today the industry is the single largest producer of films in the world, producing on an average 800 films a year in over 50 languages. a. ilm Production - The Indian film industry does not have the studio structure prevalent in the US film industry whereby most films are produced under the banner of the major studios. Instead, the industry is characterised by the presence of privately held and family owned production houses. In the last three to four years, a small number of publicly listed companies have ventured into film production, but the industry is still largely dominated by the smaller privately owned players. Because of this fragmented structure, film production in India has largely been closed to funding from bank or institutional sources and have had to rely on unorganised financing sources including private financiers. The recognition of industry status by the Government of India for the film segment around 1999 has resulted in some amount of corporatisation of the industry. This has also resulted in an increase in the financing of films by banks, which had earlier been reluctant to fund films. b. ilm Distribution - The Indian film distribution industry is also highly fragmented with the majority of distributors having limited presence. Producers typically need to tie-up with a number of regional distributors for theatrical distribution of their films across the whole of India. In addition, the advent of cable television since the early 1990s has resulted in an additional source of revenue for film producers.
Page 18 and 19: Directors’ Report Your Directors
Page 20 and 21: proper explanation relating to mate
Page 22 and 23: Name of the The financial Holding E
Page 24 and 25: Board members have complete and unf
Page 26 and 27: Details of last three Annual Genera
Page 28 and 29: AShareholders’ Information 1. Dat
Page 30 and 31: 15. Change of Address Members holdi
Page 32 and 33: 24. Distribution of Shareholding as
Page 34 and 35: ● Zee broadcasts Zee TV and Alpha
Page 38 and 39: There is also a significant target
Page 40 and 41: in 2004, which were partially offse
Page 42 and 43: year as against Rs. 3,199.3 million
Page 44 and 45: Prior Period Adjustments (Net) Prio
Page 46 and 47: numbers. It is also possible that u
Page 48 and 49: The Company primarily competes agai
Page 50 and 51: suspended the implementation of CAS
Page 52 and 53: committee with representatives from
Page 54 and 55: Annexure to Auditors’ Report Anne
Page 56 and 57: Balance Sheet as at March 31, Sched
Page 58 and 59: Schedules to the Balance Sheet as a
Page 60 and 61: Schedule 5 : ixed Assets (at cost)
Page 62 and 63: ZEE TELEILMS LIMITED (Rs. in ’000
Page 64 and 65: Schedules to the Profit and Loss Ac
Page 66 and 67: Schedule 18 : Significant Accountin
Page 68 and 69: 12. Leases a) Operating Lease Lease
Page 70 and 71: 7. Disclosures a) Share application
Page 72 and 73: ) Provision for taxation for the ye
Page 74 and 75: (iv) Transactions with Related Part
Page 76 and 77: i) Details of Remuneration to direc
Page 78 and 79: e) Other Information Particulars Ea
Page 80 and 81: Cash low Statement for the year end
Page 82 and 83: Last ive Years’ inancial Highligh
Page 84 and 85: Auditors’ Report To the Board of
Page 86 and 87:
C Consolidated Balance Sheet as at
Page 88 and 89:
Schedules to Consolidated Balance S
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Schedules to Consolidated Balance S
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Schedulse to Consolidated Profit an
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Schedule 18 - Significant Accountin
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(b) Tangible fixed assets (i) Tangi
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on actuarial valuation are charged
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(c) The components of the deferred
Page 102 and 103:
Propack Limited; Essel Agro Limited
Page 104 and 105:
Business Segment (inancial Year 200
Page 106:
BConsolidated Cash low Statement as
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