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Indian Broadcasting Foundation

13 thannual report

2011-12

Indian Broadcasting FoundationB-304, 3rd Floor, Ansal Plaza

Khelgaon Marg, New Delhi-110049, IndiaTel.: 91-11-43794400 Fax: 91-11-43794455

Email: [email protected] Website: www.ibfindia.com

For details, log onto www.indiantvfest.com

IBF Board of Directors for 2011-2012

PRESIDENT

Mr. Uday ShankarSTAR India Pvt. Ltd.

VICE PRESIDENT

Mr. Sunil LullaTimes Television Network

TREASURER

Mr. Punit GoenkaZee News Ltd.

OTHER BOARD MEMBERS

Mr. B. SaikumarNetwork 18

Mr. I. VenkatEenadu TV

Mr. Jawahar GoelZee Network

Mr. Jayant M. MathewMM TV Ltd.

Mr. K. MadhavanAsianet Communications

Mr. K.V.L. Narayan RaoNDTV

Mr. Man Jit SinghMultiscreen Media Pvt. Ltd.

Mr. Markand AdhikariSri Adhikari Bros. TV Network Ltd.

12th IBF AGM, Delhi – 19th September, 2011

Dinner with the I&B Minister, Delhi – 19th September, 2011

BCCC's Interactive Session with IBF members,Mumbai – 4th February, 2012

Indian Television Fest 2012 Media Announcement, Mumbai – 1st August, 2012


Mr. Raj NayakViacom 18

Mr. Siddharth JainTurner International India Pvt. Ltd.

Mr. Rajat SharmaIndia TV

Indian Broadcasting Foundation 13th annual report 2011-12


13 thannual report

2011-12

President

Vice President

Treasurer

Deputy Director

Auditors

Uday ShankarStar TV

Sunil LullaTimes Television Network

Punit GoenkaZee News

C. Radhakrishnan

S. S. Kothari Mehta & Co.


2 3

MESSAGE FROM THE PRESIDENT - IBF

It gives me immense pleasure to present the 13th Annual Report of the Indian Broadcasting Foundation. On behalf of the Board, I would like to highlight our achievements and their impact on the broadcasting industry in the year gone by.

IBF's Content Self Regulatory Body, Broadcasting Content Complaints Council (BCCC), completes one year and a full-fledged Secretariat is in place. BCCC has done commendable work and has slowly evolved as the most credible redressal mechanism in the GEC genre. Our collective effort stands vindicated in light of the changing television viewing pattern, content and ever changing social milieu. BCCC has come up with advisories and guidelines and as responsible broadcasters, we need to support their endeavor to the fullest by constantly evolving a more progressive content guideline.

I must point out that there is a sword of content regulation hanging over our heads. Under no circumstance should we make the mistake of taking it lightly. It is hanging with a very thin thread which can snap at the slightest pressure. The reason I pushed for BCCC on behalf of IBF is because I am acutely aware of how deep-seated and grand the desire of controlling our content is. Whether the political class or bureaucracy or the self-styled social vigilantes, they all think that they must decide the content that will go on TV. We have bought time by putting in place a robust mechanism for self-regulation by BCCC. As I lay down the office, I must exhort you all, particularly my successor, to do everything to strengthen and institutionalize BCCC. As individual members, we must not try to circumvent the authority of BCCC even if it might be in the short-term business or programming interest.

The major challenge that stares at us currently is the implementation of DAS in the four Metros by November 1, 2012. This has already faced one roadblock with the deadline being extended once, but the real onus of taking this forward lies collectively with us. The IBF‘s Sub-Committee on Digitalization has held parleys and meetings with the concerned Ministry and TRAI to ensure smooth transition of analogue cable systems to a completely digitalized environment. There can be no shortcuts in our approach now, for any laxity on our part to implement it will provide the competent authorities the opening to challenge our commitment and wield enormous influence on us. Though all our concerns have not been completely addressed, I feel confident in our collective ability to resolve the differences and hindrances. My only request to my fraternity is to be well-prepared for the timely implementation of digitalization and plug the loop holes, if any, before the deadline.

Never before, has the constitution of Broadcast Audience Research Council (BARC) been more relevant than now. We are in a position to take BARC to a different level by involving major players and making BARC operational. We are in the process of involving leading thinkers and professionals who have agreed to be a part of BARC's Advisory High Table (BAHT). The year gone by has also witnessed some tumultuous scenes about ratings and the inadequacies and irregularities associated with the existing measurement system. The onus has been on Mr Punit Goenka and other senior members who have equally contributed to take BARC forward by ironing out differences between IBF, ISA and AAAI. He is currently working on it and will come out with a clear cut picture subject to approval from the respective boards of the three constituents. This endeavor will result in a more transparent audience measurement system, which will eventually capture holistic and diverse viewer preferences yielding benefit to broadcasters, advertisers and ultimately the viewers.

The agreement between IBF & AAAI is also on the verge of being formalized. Most of the points of contention are on the verge of being resolved, which will result in a robust working structure and business relationship with mutuality of interest and equity in law with AAAI.

In the light of the tasks and challenges that I have just outlined and many more, it is extremely important that we give to the IBF a Secretariat that enables it to live up to those challenges and serve the members' interest adequately in this environment. IBF must take the lead in educating the society about the positive benefits that television brings to the society. For this, we need to interact a great deal more with the policy establishment, political class and the civil society in general. It pains me to notice that our contribution is often not acknowledged except when our shortcomings are to be pointed out. For this, we ourselves are responsible to a significant extent because we have not elevated the profile and the contribution of our business and community as the industry, has grown bigger and more conspicuous. One key challenge in that is the lack of an empowered Secretariat with a committed and competent Secretary General as its head. All industry bodies that have transformed their respective industries have had this common feature. In my two years, I tried very hard to create this at the IBF. I say it with a heavy heart that my efforts were not successful often because some members are still locked in the old mindset and do not wish to let go of the influence that we individually enjoy in the absence of an efficient and independent Secretariat. However, this is an

UDAY SHANKAR

President


NOTICENotice is hereby given that the 13th Annual General Meeting of the Members of Indian Broadcasting

thFoundation would be held on Saturday, the 29 September, 2012 at 11.00 am at the office of STAR India Pvt. Ltd., STAR House, Dr. E Moses Road, Mahalaxmi, Mumbai – 400 011 to transact the following business:-

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2012 and the Income & Expenditure Account for the period ended on that date together with Auditor's Report and Directors' Report thereon and for the purpose, to pass with or without modification(s) the following resolution as an Ordinary Resolution:

“RESOLVED THAT the Balance Sheet as at 31st March, 2012 and Income and Expenditure Account for the period ended on that date, together with Auditor's Report and Directors' Report thereon, be and are hereby approved and adopted”.

2. To re-appoint M/s S. S. Kothari Mehta & Co., Chartered Accountants, as Statutory Auditors of the Foundation, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to fix their remuneration and for the purpose, to pass with or without modification(s) the following resolution as an Ordinary Resolution:

“RESOLVED THAT M/s S. S. Kothari Mehta & Co., Chartered Accountants, the retiring Statutory Auditors be and are hereby re-appointed as Statutory Auditors of the Foundation from the conclusion of this meeting until the conclusion of the next Annual General Meeting at a remuneration as may be determined by the Board of Directors of the Foundation”.

3. To elect members of the Board of Directors. Details of directors retiring and nominations received are given below:-

A. The following members of the Board are retiring by rotation as per Clause 25 of the Articles of Association of Foundation:-

i) Elect a member of the Board of Directors in place of Mr. Jayant M. Mathew, MM TV, who would retire under Clause 25 of the Articles of Association and is eligible for re-election.

ii) Elect a member of the Board of Directors in place of Mr. Punit Goenka, Zee News Ltd., who would retire under Clause 25 of the Articles of Association and is eligible for re-election.

iii) Elect a member of the Board of Directors in place of Mr. Sunil Lulla, Times Television Network who would retire under Clause 25 of the Articles of Association and is eligible for re-election.

iv) Elect a member of the Board of Directors in place of Mr. Uday Shankar, STAR India Pvt. Ltd., who would retire under Clause 25 of the Articles of Association and is eligible for re-election.

B. The following members of the Board are retiring under Casual Vacancy as per Clause 32 of the Articles of Association of Foundation:-

i) To elect a member of the Board of Directors in place of Mr. Ashok Venkatramani, Media Content &

Ordinary Business:-

4 5

investment we can afford not to make only at a substantial long-term cost and damage to our industry and our individual businesses. I urge you all to take this forward. It is with this objective that the IBF had planned the first Indian Television Fest and the IBF‘s Sub-Committee has really worked hard on this. I do hope that the ITF would take shape and become the most exalted platform for the entire Indian television community.

I would place on record my deepest gratitude and best wishes to the functioning of various Sub Committees and would want them to continue their good work. I would be ungrateful if I did not thank Mr. Sunil Lulla and Mr. Punit Goenka for being the most exceptional colleagues and board members who have been always most supportive of my initiatives.

I would also like to place on record, the commendable work done by the IBF Secretariat in the execution and implementation of the key decisions of the Board.

It is a moment of change and I would expect that the momentum that we have generated so far, finds a new impetus after my Presidency is over. I express my deepest gratitude to all of you for the support extended to the IBF Board and look forward to your support and commitment in the future.

My deepest appreciation and thanks for your kind support and best wishes.

Sincerely

PresidentUday Shankar


After the proposed amendment the Article 33 would be as follows:-

33. Election of President, Vice President and Treasurer

At the first Board meeting after the Ordinary General Body Meeting, the Board shall elect from their number One President, Four Vice-Presidents and One Treasurer. Elected President, Vice Presidents and Treasurer shall retain their same posts for a maximum period of two years and after two years, such members shall not be entitled for the same post held by them for a period of one year, however, shall be eligible for re-election to another post. Co-opted Board members shall not be eligible for election to any of the above posts.

"RESOLVED FURTHER THAT Board of Directors of the Company be and is hereby authorised to take all such steps and to do all such acts, deeds and things as may be necessary to give effect to the above mentioned resolution".

By order of the Board of Directors ofIndian Broadcasting Foundation

C. RadhakrishnanDeputy Director

Place : New DelhiDate : 31st August, 2012

Notes:1. Member entitled should provide Board Resolution under Section 187 of the Companies Act, 1956

authorizing person(s) who will represent them at the Annual General Meeting. Such person(s) shall be deemed to be member present in person.

2. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not to be a Member. The proxy, in order to be valid must be deposited at the Registered Office of the Foundation not later than 48 hours before the commencement of the meeting.

3. Members are requested to bring their copy of the Annual Report to the Meeting.4. No person other than the authorized representative of the Member entity or his/her duly appointed proxy

as aforesaid shall be entitled to attend the Annual General Meeting of the Foundation.5. Members desirous of having any information on Accounts are requested to send their queries to IBF at

its Registered Office, at least seven days before the date of the AGM, to make the requisite information available at the meeting.

6. No member shall be entitled to be present or to vote on any resolution or otherwise participate in the proceedings at the General Body Meeting or upon a poll, to be reckoned in a Quorum whilst any money due from him to the Foundation remain unpaid 30 days after a bill or a notice of demand in writing has been sent to him for Explanation.

7. Members/Proxies attending the meeting are requested to bring the attendance slip, as appended to this Notice, duly filled in and present the same at the venue of the Annual General Meeting. No photocopies of the attendance slip will be accepted.

Communication Services (I) Pvt. Ltd., who would retire under Clause 32 (Casual Vacancy) of the Articles of Association.

ii) To elect a member of the Board of Directors in place of Mr. B. Saikumar, Network 18, who would retire under Clause 32 (Casual Vacancy) of the Articles of Association.

C. The following co-opted members of the Board are retiring as per Clause 23 of the Articles of Association:-

i) Mr. K. Madhavan, Asianet Communications Ltd.

ii) Mr. Markand Adhikari, Sri Adhikari Brothers Television Network Ltd. iii) Mr. Raj Nayak, Viacom 18 Media Pvt. Ltd.

D. IBF Secretariat has received valid nomination forms from the following members for IBF Board of Directors as per Clause 28 of the Articles of Association and are eligible for election:-

i) Mr. Aloke Malik, ESPN Software India Pvt. Ltd.ii) Mr. Anil Mehra, TV Today Network Ltd.iii) Mr. Ashok Venkatramani, Media Content & Communication Services (I) Pvt. Ltd.iv) Mr. B. Saikumar, Network 18v) Mr. K. Madhavan, Asianet Communications Ltd.vi) Mr. M. K. Anand, UTV Global Broadcasting Ltd.vii) Mr. Markand Adhikari, Sri Adhikari Brothers Television Network Ltd.viii) Mr. N. P. Singh, Bangla Entertainmentix) Ms. Preet Dhupar, BBC World India Pvt. Ltd.x) Mr. Rahul Johri, Discovery Communications xi) Mr. Sudhanshu Vats, Viacom 18 Media Pvt. Ltd.xii) Mr. Tripurari Sharan, Doordarshanxiii) Mr. Uday Shankar, Star India Pvt. Ltd.

4. Alteration in Articles of Association – To consider and if thought fit, pass, with or without modification(s), the following resolution as a special resolution.

"RESOLVED THAT consent of the Company be and is hereby given for amendment in the existing Article 33 of the Articles of Association of IBF as under, subject to the approval of the Registrar of Companies :-

Existing Article

33. Election of President, Vice President and TreasurerAt the first Board meeting after the Ordinary General Body Meeting, the Board shall elect from their number a President, Vice-President, Hon. Treasurer. Elected President, Vice President and Treasurer shall retain their same posts for a maximum period of two years and after two years, such members shall not be entitled for the same post held by them for a period of one year, however, shall be eligible for re-election to another post. Co-opted Board members shall not be eligible for election to any of the above posts.

Special Business

6 7


Directors' Report to the MembersThe Directors have pleasure in presenting the 13th Annual Report of your Foundation together with Audited Accounts for the period from April 1, 2011 to March 31, 2012.

Your Foundation has reported an Income from Subscription of Rs. 1,67,00,000/-. Besides that contributions income has been recognized for specific projects i.e. Self Regulatory Guidelines Fund Rs. 24,00,206/- and Broadcast India Survey Fund Rs. 92,40,382/- to the extent the same has been utilized for the respective projects. Interest on fixed deposit of Rs. 77,06,869 /- has also been recognized and incurred an Expenditure of Rs. 2,46,46,399/- (excluding amount utilized from the Self Regulatory Guidelines Fund and the Broadcast India Survey Fund) during the period ending 31st March, 2012.

The number of Members of the Foundation as at 31st March, 2012 was 50.

M/s S. S. Kothari Mehta & Co., Chartered Accountants, Statutory Auditors of the Foundation, hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Foundation has received letter from them to the effect that their appointments, if made, would be within the prescribed limit under Section 224(1-b) of the Companies Act, 1956 and also that they are not otherwise disqualified within the meaning of sub section (3) of Section 226 of the Companies Act, 1956, for such appointment.

The Statutory Auditors' Report on the Accounts of the Foundation for the financial year ended 31st March, 2012 is self explanatory and does not require further comments in the Directors' report.

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy and Technology Absorption is not disclosed as the same is not applicable to the Foundation, being a Foundation. Foundation has no foreign exchange earnings and outgo during the period.

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report.

Financial Review

Membership of the Foundation

Auditors & Auditors' Report

Report on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo etc.

Particulars of Employees

8 9

Explanatory Statement Pursuant to Section 173(2) of the Companies Act, 1956

Item No. 4 - Alteration in Articles of Association :

C. Radhakrishnan

The Board of Directors of Indian Broadcasting Foundation at its meeting held on 31st August, 2012 proposed an alteration in Article 33 of the Articles of Association of the Foundation regarding “Election of President, Vice President and Treasurer”. As per the existing Article 33, the Board shall elect from their number a President, Vice-President, Hon. Treasurer. The Board is of the view that the Broadcasting Industry has grown manifold in the past few years. Therefore, there is an imminent need to increase the scope of activities of IBF in a strategic and phased manner. This will require considerable time & effort on part of the IBF's Office Bearers to oversee the various activities of IBF viz. Credit Control, Content Regulation, Regulatory & Legal issues, Research & Insight etc. In order to off load the pressure on Office Bearers and to tackle these issues, as also various other issues of the Broadcasting Industry, the Board has recommended that instead of one Vice President, 4(Four) Vice Presidents should be appointed from amongst the Board members, besides one President and one Treasurer, to spearhead each of the main activities of IBF.The Board therefore recommends the resolution to be passed by the members as a Special Resolution.

None of the members of the Board is concerned or interested in the aforesaid resolution.

The copy of the Articles of Association of the Foundation shall be open for inspection of the desirous members on any working day during 11.00 am to 1.00 pm up to the date of the AGM at the Registered Office of the Company.

By order of the Board of Directors of


Deputy DirectorPlace : New DelhiDate : 31st August, 2012


However, having regard to the provisions of Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Foundation and others entitled thereto. Any member interested in obtaining such particulars may write to the Director (Finance) at the registered office of the Foundation.

Directors' Responsibility Statement

Acknowledgements

For and on behalf of the Board of Directors

Uday Shankar Sunil Lulla Punit Goenka K.V.L. Narayan Rao

Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Foundation at the end of the accounting year and of the surplus of the Foundation for that year;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Foundation and for preventing and detecting fraud and other irregularities;

(iv) that the Directors had prepared the annual accounts on a going concern basis.

The Board of Directors wish to place on record their appreciation for the support and cooperation extended by every Member of the Foundation, the Secretariat, its Bankers, and valuable contribution made by the Consultants, Counsels and officials of the Member Companies.

- sd - - sd - - sd - - sd -

President Vice President Treasurer Director


PROXY FORM

Indian Broadcasting Foundation13th Annual General Meeting

29th September, 2012

I_______________________________________________ being a Member of the above named Foundation,

representing_________________________________________________(Corporate Entity) do hereby appoint

Mr./Ms__________________________________, R/o ______________________________________________

________________________as my proxy to vote for me on my behalf at the 13th Annual General Meeting of

the Indian Broadcasting Foundation to be held on Saturday, the 29th September, 2012 at 11.00 am at the

office of STAR India Pvt. Ltd., STAR House, Dr. E Moses Road, Mahalaxmi, Mumbai – 400 011 and at any

adjournment thereof.

Signed this_____________________ day of ________________ 2012.

Signature of Member Representative ___________________________________

Name of Broadcaster________________________________________________

Name of the Proxy-holder____________________________________________

Attested

Signature of Member Representative_____________________

Note : In order to be effective & valid, the proxy form must be received by the Foundation at its Registered Office not less than 48 hours before the commencement of the Meeting.

Re. 1/- Revenue Stamp

1110


Attendance Slip

Indian Broadcasting Foundation13th Annual General Meeting

29th September, 2012

(To be filled in BLOCK LETTERS)

Name of the Member Representative____________________________________________________________

I hereby record my presence at the 13th Annual General Meeting of the Indian Broadcasting Foundation

held on Saturday, the 29th September, 2012 at 11.00 am at the office of STAR India Pvt. Ltd., STAR House,

Dr. E Moses Road, Mahalaxmi, Mumbai – 400 011.

Signature of the Member Representative

(To be signed at the time of handing over this slip)

Note: Please fill the Attendance slip and hand it over at the entrance of the meeting hall.

13


Annual Report of the Indian Broadcasting Foundation for the Year 2011-12

Overview of the Television Industry

TV Industry Size

The Rs 38,000-crores Indian Broadcasting Industry is poised to chart a rapid growth trajectory. The positive outlook comes despite evident signs of an economic slowdown during 2011-12 with its spillover effect being felt in the first half of the current fiscal. The bygone year has been challenging, not just for the Indian Broadcasting Industry, but also for the global broadcast sector. The Indian industry expects that the Government will make all-out efforts to mitigate the initial setback on the critical digitization front and ensure that the original universal sunset deadline of December 2014 is adhered to. The expanding DTH subscriber base and the resultant boost in subscriber revenue have to be weighed against the obvious leakages that inflict the system.

Improvement of the broadcast ecosystem has been the industry's hallmark. Continuous expansion of content distribution platforms—while keeping quality imperatives in clear sight—has contributed to the industry's positive outlook. The incessant focus on regional outreach has led to definite sectoral gains, market expansion, better definition of goals and high consumer satisfaction. The thrust on evolving a rational, consumer-friendly television advertisement regime—reached through synergy among all stakeholders—has boosted the industry's confidence.

Revenues from TV advertising and subscription of broadcasting industry are expected to touch Rs 38,000 crores in 2012 and hit a staggering Rs 73,500 crores by 2016, buoyed as it is by growth in regional media. In the long run, however, India continues to be a growth market and the advertising market is expected to grow at a CAGR of 17 per cent over 2011-16.

During the year, the broadcast sector witnessed major consolidation with many large corporates joining the quest. Rapid technological advances and new initiatives are poised to shape broadcasting industry in the coming decade. Cable digitization, DTH penetration, wireless broadband, digitized film distribution and growing internet use are prompting strategic shifts in the way companies function. Joint ventures have become the order of the day.

The FICCI-KPMG Report 2012 says the Indian Media and Entertainment (M&E) industry grew by 12 per cent in 2011 to Rs 72,800 crores due to stronger consumption in Tier-2 and Tier-3 cities, sustained growth of

505

421

344

287

250

214

194

169

158

140

122

2016P

2015P

2014P

2013P

2012P

2011

2010

2009

2008

2007

2006

230

197

170

148

130

116

103

88

82

71

61

735

618

514

435

380

329

297

257

241

211

183

0 100 200 300 400 500 600 700 800

Subscription Revenue Advertisement Revenue

Source : KPMG in India Analysis. Industry discussions

15


regional media and new media business and it is projected to reach Rs. 82,300 crores in 2012. A plethora of channels already cater to the local populace in smaller cities and towns. Despite hiccups, the industry is slated to clock 13 per cent growth in 2012. The report says the expansion rate will speed up till 2016, by when the business will be worth Rs 1,45,700 crores. This translates into a compounded average growth rate (CAGR) of 15 per cent over the five years.

Overall Industry Size

From the second quarter of the year, the signs of overall economic slowdown seemed to have impacted the M&E industry with the overall industry projections being 1.5 per cent less than last year. The advertising industry also showed a marginal 2 per cent drop in 2011, reaching about Rs 30,000 crores as against the projected Rs 30,600 crores. Ad spends in 2011, however, grew 13 per cent year-on-year to Rs 30,000 crores and accounted for 41 per cent of overall industry size. Moreover, ad sales figures of last five years undoubtedly prove how the broadcast sector has outsmarted its traditional counterparts and is gradually becoming the first choice for existing and potential advertisers. Broadcasting is, obviously, more accessible and cost-effective. The retention value of the broadcast messages is higher than any other medium.

Advertising Revenue

(INR Billion)

(For Growth CAGRCalendar 2007 2008 2009 2010 2011 in 2011 2012P 2013P 2014P 2015P 2016P (2011-16)Years) over 2010

TV 211.0 241.0 257.0 297.0 329.0 10.8% 380.0 435.0 514.0 618.0 735.0 17%

Print 160.0 172.0 175.2 192.9 208.8 8.2% 226.0 246.8 270.0 294.9 323.4 9%

Film 92.7 104.4 89.3 83.3 92.9 11.5% 100.0 109.7 121.1 134.5 150.3 10%

Radio 7.4 8.4 8.3 10.0 11.5 15.0% 13.0 16.0 20.0 24.0 29.5 21%

Music 7.4 7.4 7.8 8.6 9.0 4.7% 10.0 11.3 13.1 15.4 18.2 15%

OOH 14.0 16.1 13.7 16.5 17.8 7.9% 19.5 21.5 23.6 26.0 29.0 10%

Animation & VFX 14.0 17.5 20.1 23.6 31.0 31.4% 36.3 43.0 51.1 61.0 69.0 17%

Gaming 4.0 7.0 8.0 10.0 13.0 30.0% 18.0 23.0 29.0 37.0 46.0 29%

Digital Advertising 4.0 6.0 8.0 10.0 15.4 54.0% 19.9 25.8 33.5 43.7 57.0 30%

Total 515 580 587 652 728 11.7% 823 932 1075 1255 1457 14.9%

Source : KPMG in India Analysis.

(INR Billion)

(For Growth CAGRCalendar 2007 2008 2009 2010 2011 in 2011 2012P 2013P 2014P 2015P 2016P (2011-16)Years) over 2010

TV 71.0 82.0 88.0 103.0 116.0 12.6% 130.0 148.0 170.0 197.0 230.0 14.7%

Print 100.0 108.0 110.4 126.0 139.4 10.6% 154.1 172.4 192.9 215.0 240.6 11.5%

Radio 7.4 8.4 8.3 10.0 11.5 15.0% 13.0 16.0 20.0 24.0 29.5 20.7%

OOH 14.0 16.1 13.7 16.5 17.8 7.9% 19.5 21.5 23.6 26.0 29.0 10.0%

Digital Advertising 4.0 6.0 8.0 10.0 15.4 54.0% 19.9 25.8 33.5 43.7 57.0 29.9%

Total 196 221 228 266 300 13.0% 337 384 440 506 586 14.3%

Source : KPMG in India Analysis. Industry discussions

200

180

160

140

120

100

80

60

40

20

0

Mill

ion

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ehol

ds

90%

88%

86%

84%

82%

80%

78%

76%

74%

72%

C&

S p

enet

ratio

n

138146

188

78%

81%

88%

2010 2011E 2016P

TV Households (mn) C&S penetration of TV households (mn)

India has one of the highest number of news channels in the world with almost 150 channels in the genre and is the third largest television market, in terms of number of viewers after China and the US. The number of operational channels increased from 552 in 2010 to 623 in 2011 and so has the advertisement inventory. The market grew due to increase in volume while rates of the inventory, in general, stayed flat or even declined in some cases.

The number of TV households expanded at 7 per cent to reach 138 million in 2010 from 129 million in 2009. In 2011, the number of TV households rose to 146 million and is expected to reach 188 million households in 2016.

According to the first phase of Census 2011, the proportion of radio-owning households has fallen almost at the same rate at which the proportion of television homes has gone up. A stark difference still remains between TV penetration of rural and urban India. Just one-third of rural households own a TV set, compared to 75 per cent of urban homes. Delhi (88 per cent) has the highest penetration, followed by Tamil Nadu (87 per cent), Punjab, Chandigarh and Puducherry. At 15 per cent, Bihar has the lowest TV penetration. The Census report indicates ample scope for increasing the number of television homes, reiterating that India still has a huge untapped market. The penetration in India is much lower compared to developed markets like the US and the UK that are almost fully penetrated. Television penetration grew from 58 per cent in 2009 to 61 per cent in 2011 as per the FICCI report, 2011.

The Broadcast Industry is on the brink of a revolution. New technologies and platforms are transforming the way we experience and enjoy content. It is important to ensure that tax laws recognize this and provide platform neutrality so that consumption of content over different platforms has consistency in terms of tax treatment.

In recent years, the industry's ability to grow at the desired pace has been marred by taxes in various forms and multifarious statutory compliances. While we recognize the industry as part of our cultural heritage, the average cascading effect of tax burden is more than 40-45 per cent. It is at par with products like alcohol, tobacco and goods with negative externalities. Such heavy taxes deter the growth of the Broadcasting Industry, which is driven mainly by private entrepreneurs. This has severely impacted, the growth of the industry, which is not just a medium of the masses but also one that disseminates social messages.

Growth in Number of C&S Households

Growth impediment

16 17


Taxation of Cable & DTH Sector

DAS Sub Committee

Service Tax 12.36% of the subscription amount

Entertainment Tax On average 30% of the subscription amount

Cumulative Tax Burden Up to 42.36%

Taxes on Customer Premise Equipment (CPE)

Customs Duty on Set Top Boxes (STB) 5% of the Assessable value

Excise/CVD 8.24%

(i) VAT on Sale 12.5%

(ii) VAT on Rental of CPE (Right to Use) 12.5%

Entry/Octroi Up to 12.5%

The Government must consider granting relief from levy and collection of service tax on subscription charges received by cable operators and DTH operators. These charges are already subject to entertainment tax.

From a 20 per cent share, subscription increased to 30 per cent of the overall revenue pie. The digitization plan—aiming at a transition from analog to digital domain—is seen as the game changer. Broadcasters will increase their subscription revenues, ending a regime of hefty carriage fees they pay to cable TV operators, who would come under regulation. For years, IBF has been engaging the Government for the analog-to-digital shift, a global phenomenon. Currently, India is the third largest digital market on basis of subscribers mainly due to increased DTH push.

The analog-to-digital switch in four metros suffered a setback when the deadline was extended from July to November 2012. It is time all stakeholders stood united on the issue.

In an effort to usher digitization, MIB, after IBF's recommendations, was mulling over a set of proposals, including a 10-year tax holiday under Section 81(A) of Income Tax Act, duty exemptions and granting infrastructure status for the industry. But the Committee of Secretaries had turned down the industry's demand for such benefits.

The IBF Board formed a Sub-Committee on Digitization chaired by Mr. Siddharth Jain to remove obstacles in digitization and also to incentivise stakeholders to move to voluntary digitization. It has deliberated on TRAI's new Tariff Order and Interconnection Regulations for Digital Addressable System (DAS) at various meetings and concalls. The Sub-Committee has further constituted two Sub-Groups on 'Piracy Monitoring' and 'Enforcement' to ensure smooth transition. The Sub-Group on Piracy Monitoring would interact with MSOs and ensure all steps to prevent analogue piracy. It has also been mandated to help in organizing raids in consultation with law enforcement agencies to stop piracy in DAS areas. The Enforcement Sub-Group would liaison with the state machinery, TRAI, MSOs, MIB and any other organization to handle issues related to regulations and enforcement. In due course, the Sub-Group will also meet the States' Chief Secretaries and Police Commissioners to curb piracy and ensure a smooth DAS rollout.

TRAI had summoned meetings with stakeholders to discuss the status of Interconnection Agreements for DAS notified areas. TRAI is of the view that ideally the service providers should be able to conclude the contracts within the regulatory framework before deadline. The Sub Committee members have assured TRAI of the broadcasters sincere efforts to conclude the agreements with MSOs. If the deals are not concluded within the stipulated period, there is all likelihood of TRAI's intervention which may not be in the best interests of the members.

To ensure wide publicity of the digitization campaign, the IBF Board had resolved that every member should carry a certain amount of inventory on their channels. We are very happy to report that all IBF members ran the campaign, contributing to increase the awareness of the viewers. The campaign has been discontinued after the rollout deadline was extended but it has been well appreciated and recognized by all stakeholders.

The Ministry issued a notification (SO 1408(E) dated 21 June 2012), amending its earlier notification (SO 2534(E), dated 11 November 2011), under the Cable Television Networks (Regulation) Act, 1995. This order extended the analog-to-digital switch date for the first phase from 30 June 2012 to 30 November 2012. IBF's Legal Committee filed a Writ Petition in Delhi High Court, requesting it to quash the notification so that MIB allows no more extensions on digital switchover in the four metros.

The appeal filed by IBF and other broadcasters against Advertisement Regulations notified by TRAI on 14 May 2012 came up for hearing before Hon'ble TDSAT on 17 July 2012.

Since TRAI has not yet filed any reply in the said matter, their Counsel made a statement that the Authority shall examine the various issues raised by the broadcasters in their petition and would apprise TDSAT accordingly within six weeks. Their counsel also made it clear that they would not enforce the regulations till the next date of hearing.

TRAI Vs IBF and Others in the Hon'ble Supreme Court – This proceeding is pending before the Hon'ble Supreme Court in connection with the Tariff Order passed by the TRAI for addressable systems. The TDSAT had set aside the tariff for addressable systems being fixed at 35 percent of Non CAS by TRAI inter-alia questioning the Regulator's powers and authority in the matter of tariff fixation and TRAI appealed in the Supreme Court. The Hon'ble Supreme Court has stayed the order of the Hon'ble TDSAT replacing 35 percent with 42 percent in the interim. The matter shall be heard in due course.

TRAI Vs Set Discovery and Others in the Hon'ble Supreme Court - This is an appeal filed by the TRAI in the Hon'ble Supreme Court - arising out of the Hon'ble TDSAT's decision setting aside the amendment to the Tariff Order dated 4 October 2007 whereby channels had to be provided by broadcasters to operators of non addressable platforms in ala carte and the retail ceiling for channel prices being prescribed among others. The Order of the TDSAT has since been stayed and TRAI has been directed to conduct an exercise de novo to determine the question of tariff and subscriber base. TRAI has since filed its report in the Supreme

Digitization Campaign

Writ Petition challenging DAS extension notification issued by MIB

TDSAT against TRAI's regulations on TV Advertising

Other Proceedings pending with Hon'ble Courts

18 19


Court together with the proposed New Tariff Order for non addressable platforms after conducting fresh consultations with stakeholders. It has also filed its recommendations for Pan India digitization. This recommendation has resulted in the amendments to the Cable Television Act and Rules, and the Ministry notifying the sunset date for non addressable/analog platforms. TRAI has also issued amendments to the tariff and framed new interconnect regulations for mandatory digital addressable systems. The matter shall be heard in due course.

This is, perhaps, one of the most important functions of IBF. This gives members sufficient leeway in dealing with clients and media agencies, providing them with the correct picture and factual information on payments.

Regular monthly meetings are held to review the dues of member channels and action taken against defaulting clients/agencies. Prompt action has, so far, resulted in improved collections. The IBF-AAAI Committee has been calling the defaulting clients and media agencies for a meeting with the Sub-Committee. The Committee directs the channels and AAAI agencies to periodically reconcile their disputed amounts. Our members have followed the Sub-Committee's decisions in letter and spirit. IBF membership has shown the strength and resilience to diligently tackle the payment issue.

This Committee acts as the interface between all non-AAAI agencies and their respective clients, who contribute a substantial part of our advertising revenue. The defaulting agencies and clients are called upon at regular intervals and meetings are held in various parts of the country. The endeavor has considerably brought down the outstanding dues.

On 30 May 2012, DAVP issued an Advisory on New C&S TV Rates & Network Capping. IBF is spearheading a campaign against certain points that adversely impact our revenue streams. So far, we have arranged a meeting of senior IBF representatives with the Secretary, MIB and Director General, DAVP. IBF has also submitted a memorandum to the concerned authorities. IBF Members have been advised not to accept the DAVP releases till a broad understanding is arrived at. There has been a softening of stance by the Government and in a subsequent meeting with IBF's representatives, it has been decided to give into some of the demands/ concerns raised by IBF and in all likelihood, a revised notification would be issued by DAVP shortly.

With regard to mounting outstanding, we have frequently met senior officials of DAVP and insisted on release of payments within the stipulated credit period.

The Committee's primary mandate was to build a perception of the value of TV through research and communication. The Committee appointed a research agency ORMAX to conduct a survey with a sample size of 5,400 respondents in 18 cities through face-to-face questionnaire and a battery of statements that reflect the value TV brings to the life of an ordinary viewer. The Survey Report, PosiTVity, was released at FICCI FRAMES in Mumbai on 14 March 2012.

IBF-AAAI Sub-Committee

Committee on Credit & Collections

Issues Related to DAVP

IBF's Committee on Marketing & Communication

Highlights of the PosiTVity Report

Indian TV Fest

Broadcasting Content Complaints Council (BCCC)

The report identifies seven roles that television plays in a viewer's life—Education, Personality Development, Social Interaction, Exposure, Opportunity, Awakening and Rejuvenation. The report has been widely covered and quoted. It dispels the notion that television is only a medium of entertainment. It has amplified the often-unsaid and hugely under-rated the power of television as a catalyst for change. It has also reiterated that television is a medium to influence public opinion, stir up sentiments and awaken the masses.

Although television has grown as a medium with an overreaching effect on the country's social and economic tastes, there is a huge disconnect in the prices that television advertising inventory attracts. This issue has since been confronting every broadcaster.

In a one-of-its-kind initiative, the IBF's Committee on Marketing and Communication will hold the first edition of Indian TV Fest 2012 on November 2-3 in Goa. The Fest intends to bring the entire broadcasting industry under one roof, helping it collaborate, exchange, ideate, view, review, showcase and participate in global conversation. The Fest will provide an excellent opportunity for the industry to network, exchange ideas and interact with professionals, entrepreneurs and global experts from the entire value chain of broadcasting. It will revolutionize the way broadcasting is perceived in India. IBF has received an overwhelming response to the Fest after its brochures, mailers and publicity material came into public domain.

The first Press Conference pertaining to the official announcement of the Indian TV Fest 2012 was organized on 1 August 2012 which was widely covered.

The Broadcasting Content Complaints Council (BCCC), the independent self-regulatory body for non-news Channels set up by IBF in June 2011, completed its first year of operation under the Chairmanship of Justice (Retd.) A.P. Shah and 12 other Members — four eminent persons, four representatives of national-level statutory commissions and four nominees of Broadcasting Industry.

In the last one year, there is a rapid increase in the number of complaints handled by BCCC in view of various measures implemented by IBF Member Channels and increased awareness of the television audience. Till 31 July 2012, BCCC received 6,830 complaints and suggestions, including 782 specific complaints. The Council disposed of an overwhelming number of these to the satisfaction of complainants. Most complaints pertained to portrayal of vulgarity/obscenity and violence on television.

The BCCC's functioning has been widely acknowledged, both by stakeholders and the Ministry of Information and Broadcasting. IBF Member Channels have shown great enthusiasm and are open to the idea of making suitable changes in programme content in line with viewer feedback provided to them by BCCC.

The BCCC has, so far, held 16 meetings, each yielding extremely encouraging results in the Council's quest to uphold and strengthen high standards of self-regulation based on the principles of autonomy, transparency and accountability.

20 21


The BCCC, so far, has issued 4 Advisories which are to sensitize the broadcasters pertaining to these topics.1) Advisory on Depiction of Women 2) Advisory on Telecast of Award Functions3) Advisory on Depiction of Animals4) Advisory on Participation of Children in Reality Shows

Given the crucial role the BCCC has come to play, IBF set up a full-fledged Secretariat to aid and assist its day-to-day work. The new Secretariat became functional from 1 May 2012.

The BCCC also held two interactive sessions with Channel heads/S&P heads/Content heads to develop a better understanding about IBF's Self-Regulatory Guidelines and make television content suitable for unrestricted viewing.

IBF had decided to commission the first national broadcast media-centric study through an open tender. The objective has been to get an independent and accurate understanding of penetration and access of the broadcast media, especially television, across India.

The Survey has been designed to produce estimates of broadcast media penetration at various population strata levels and to get an understanding of broadcast access and consumption behaviour based on various parameters.

The Survey's first phase would involve two parts. The first part would be to design the study so as to meet the Survey's objectives. IBF's Committee on Research and Insight has awarded the Pilot Project for Andhra Pradesh (sample size 21,463) and Maharashtra (sample size 25,575) to Nielsen. The agency has informed that the report would be ready soon.

MIB authorized Central Board of Film Certification (CBFC) to certify advertisements of separate and distinct products, which happen to share the brand name of an alcohol/tobacco product. But in the last 2 years, the CBFC has not approved a single brand extension commercial. This has led to an annual loss of around Rs 400 crores in the business of TVCs. The business has moved to other competing industries that do not attract this ban.

IBF, along with representatives of News Broadcasters Association (NBA), Advertising Standards Council of India (ASCI), Confederation of Indian Alcoholic Beverage Companies (CIABC) and Tobacco Institute of India (TII), has held meetings with Ministry of Information and Broadcasting and conveyed that there should be a distinction between brand extension ads and surrogate ads. Genuine brand extension ads should not be scuttled as it is a legitimate right. There is no restriction on brand extension ads in Print Media and Outdoor Media (Hoardings). The Ministry of Information and Broadcasting has agreed that self-regulation is the best way forward and suggested to draft Self-Regulatory Guidelines with regard to advertisement of Brand Extension Products.

IBF has submitted a draft of Self-Regulatory Guidelines for telecast of brand extension ads on Channels. IBF is advocating Self-Regulatory Guidelines not only with Ministry of Information and Broadcasting but also intends to take it up with Ministry of Health & Family Welfare and Ministry of Consumer Affairs.

Broadcast India Survey Pilot Project

Brand Extension Guidelines

It was, meanwhile, learnt that the Ministry of Information and Broadcasting intends to set up an Inter-Ministerial Committee to examine the matter and give its recommendations. IBF has requested MIB that any such committee, if constituted, should also have IBF representation.

The Amendment Bill, introduced in December 2011, sought to amend Clause 1, Section 31D of the Copyright Act, providing statutory license to radio broadcasters, enabling them to broadcast musical works in public interest. But television broadcasters had to pay a hefty sum to the music companies. This was not the case when the Bill was first introduced in the Rajya Sabha in 2010 because at that time, statutory licensing was equally applicable to radio and TV. After intense lobbying and advocacy by IBF and getting all stakeholders to reach a point of consensus, the Bill has finally been passed by the Parliament. It is a landmark legislation that also keeps the broadcasters' interests paramount. All industry bodies have welcomed it.

To codify working and business relationship between IBF and AAAI members so that mutuality of interest and equity in law is established, IBF and AAAI signed an agreement in 2001. Since the initial agreement tilted in favour of the agencies, a more balanced revised agreement was signed in 2008, which was in force till 31 March 2010. The IBF Board has authorized an IBF Sub-Group comprising Mr. Sunil Lulla and Mr. Punit Goenka to re-negotiate the terms with AAAI and draft a revised IBF-AAAI agreement.

The key features of the revised agreement shall include reduced uniform credit period of 45 days, transition from Cost Per Rating Point (CPRP) to Cost Per Thousand (CPT), banning of defaulting client from all media for one year or till the satisfactory settlement of dues, development and implementation of integrated electronic billing etc.

News Access Guidelines for use of General Entertainment Footage: The IBF's Committee on Regulatory Affairs & Legal Issues headed by Mr. Punit Goenka has drafted guidelines for use of General Entertainment Footage. The Committee decided that if a GEC, Sports or any other channel provides free footage to news channels under certain conditions, the latter may run it at the timings, for such durations, subject to such conditions as is expressly permitted by the channel. If the news channel wishes to run the content of any GEC/Sports/any other genre, prior written permission of such channel is required for the news channels to use the footage. No footage may be used without such prior written consent. The guidelines have been adopted by the IBF Board and subsequently sent to NBA.

The IBF Board has agreed to implement Deutsche Bank's Software Solution for Ad Spots Payments and Invoice Reconciliation Engine (ASPIRE).

ASPIRE is intended to be a workflow automation solution that facilitates a digital interchange across the information and financial supply chain in the broadcasting industry. The objective is to provide a uniform platform where communication between multiple broadcasters and agencies can be standardized through a central engine without altering the individual workflows of respective counter-parties. The solution suggested facilitation of a common settlement mechanism which aids reconciliation of invoices raised by broadcasters

Copyright Amendment Bill

IBF-AAAI Agreement

Regulatory Committee

Deutsche Bank's ASPIRE

22 23


against payments made by agencies. DB will facilitate replicating existing commercial rules of engagement between agencies and broadcasters (credit periods, part payments, payment on value date of only specific invoices approved). The IBF-AAAI Sub-Committee has been authorized to oversee the implementation of ASPIRE. The IBF Board further decided to form a small committee of senior IBF members to oversee smooth implementation of ASPIRE.

IBF, Indian Society of Advertisers (ISA) and Advertising Agencies Association of India (AAAI) have agreed to come on board to establish the Broadcast Audience Research Council (BARC) as a Section 25 company. Its sole objective is to commission and oversee the next generation of broadcast audience research in India.

There has been considerable debate in various foras, extending even to Parliament, about TV audience measurement system, or the 'TRP system'. Several committees were formed—most recent being the Ministry of Information and Broadcasting –appointed Dr Amit Mitra Committee on TV Audience Measurement, which recommended the establishment of BARC, representing the interests of all key stakeholders.

The equity pattern of the three BARC entities—IBF, ISA and AAAI—will have a respective holding of 60, 20 and 20 per cent. Correspondingly, a 10-member Board would be announced with 6, 2 and 2 directors each from IBF, ISA and AAAI. With this initiative, IBF looks forward to heralding a new generation of representative, reliable and robust broadcast audience measurement.

Broadcast Audience Research Council (BARC)

New IBF Members

Uday Shankar

This will provide an opportunity to advertisers, broadcasters and advertising agencies to have transparent and robust research and in-depth insights in the rapidly changing television viewership landscape. In a recent meeting between the authorized representatives of IBF, ISA and AAAI, most of the residual areas of disagreement have been ironed out and a draft of the proposed Articles of Association of BARC was initialized by all three parties. The draft will be adopted formally by the three organizations in their forthcoming Board Meetings and the formal documents will be duly executed soon thereafter.

Given that audience measurement, particularly for television, has so many direct and indirect areas of interface with the wider community and the entire country, BARC believes that it needs the guidance and insight of highly respected thinkers and professionals to set and achieve the highest possible standards of capability and practice in the area. To this end, BARC is establishing the “BARC Advisory High Table (BAHT)”. The object of BAHT will be defined as, “To continually vision the future of BARC against the backdrop of a rapidly transforming economic, social and media landscape in India”. Letters of Invitation have been sent to all the prospective members of the BARC Advisory High Table and confirmations have started coming in.

We welcome Food Food, B4U, AATH and Polimer TV as the new ad hoc members of the IBF.

By the order of the Board of Directors of Indian Broadcasting Foundation

President – IBF


AUDITOR'S REPORT The MembersIndian Broadcasting Foundation Delhi

We have audited the attached Balance Sheet of Indian Broadcasting Foundation as at 31st March 2012 and also the Income and Expenditure Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

This report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditor's Report) Order, 2003 [as amended by the Companies (Auditor's Report) (Amendment) Order, 2004] issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, since in our opinion and according to the information and explanations given to us, the said Order is not applicable to the Company.

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

b) In our opinion, proper books of accounts as required by law have been kept by the company, so far as appears from our examination of the books.

c) The Balance Sheet and Income and Expenditure Account dealt by this report are in agreement with the books of accounts.

d) In our opinion the Balance Sheet and Income and Expenditure Account dealt with by this report comply with the mandatory accounting standards, to the extent applicable, specified by the Institute of Chartered Accountants of India referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified, as on 31st March 2012 from being appointed as director in terms of clause (g) of sub-section (1) Section-274 of Companies Act 1956.

Further we report that:

24 25


f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts along with significant accounting policies & notes to accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In case of Balance Sheet, of the State of affairs of the Company as at 31st March 2012;

ii) In case of Income and Expenditure Account, of excess of expenditure over of the company for the year ended on that date.

For Chartered Accountants

Firm's Regn. No. 000756N

Sd/-

Partner(Membership No. 094380)

Place: New DelhiDate: 31st August, 2012

S.S. Kothari Mehta & Co.

Naveen Aggarwal

Indian Broadcasting FoundationBalance Sheet as at 31st March, 2012

Amount (Rs.)

Particulars Note No. As at 31 March 2012 As at 31 March 2011

I. EQUITY AND LIABILITIES

(1) Member's Funds(a) Entrance fee 2 9,750,000 6,300,000 (b) Reserves and Surplus 3 55,029,826 54,846,490 (2) Non-Current Liabilities(a) Long term provisions 4 2,828,241 2,450,936 (3) Current Liabilities(a) Other current liabilities 5 52,580,225 64,188,823 (b) Short-term provisions 6 34,092 30,062

Total 120,222,384 127,816,311

II. ASSETS

(1) Non-current assets(a) Fixed assets

(i) Tangible assets 7 26,119,675 26,642,419 (ii) Intangible assets 8 22,926 55,211

(b) Non-current investments 9 1,500,000 99,990 (c) Long term loans and advances 10 12,800 18,249 (d) Other non-current assets 11 9,965,746 37,263,681 (2) Current assets(a) Trade receivables 12 - 35,950,000 (b) Cash and bank balances 13 68,980,681 26,166,143 (c) Short-term loans and advances 14 7,982,024 1,471,222 (d) Other current assets 15 5,638,532 149,396

Total 120,222,384 127,816,311

Significant Accounting Policies 1Other Notes to Accounts 21-31 The accompaying notes are an integral part of the Balance Sheet.

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

For Chartered Accountants Firm's Regn. No. 000756N

Sd/- Sd/- Sd/- Sd/-

Partner President Vice President TreasurerMembership No. 094380 Place : New Delhi Sd/- Sd/-Date : 31st August, 2012

Director Deputy Director

Place: Noida, Date: 31st August, 2012

S.S. Kothari Mehta & Co. For and on behalf of the Board

Naveen Aggarwal Uday Shankar Sunil Lulla Punit Goenka

K.V.L. Narayan Rao C. Radhakrishnan

26 27


Indian Broadcasting FoundationIncome & Expenditure Account for the

Year Ended 31st March 2012 Amount (Rs.)

Particulars Note No. For the Year ended For the Year ended2011-12 2010-11

Income:

I. Subscription 16 28,340,588 14,300,000

II. Other Income 17 7,706,869 2,749,301

III. Total Revenue (I +II) 36,047,457 17,049,301

Expenditure:

Employee benefit expense 18 7,118,369 6,317,229

Depreciation and amortization expense 19 864,657 783,608

Other expenses 20 27,931,095 3,871,827

IV. Total Expenses 35,914,121 10,972,664

V. Surplus/(Deficit) Before Tax(III-IV) 133,336 6,076,637

VI. Surplus/(Deficit) for the Year 133,336 6,076,637

Significant Accounting Policies 1

Other Notes to Accounts 21-31

The accompaying notes are an integral part of the Income & Expenditure Account.

This is the Income & Expenditure Account referred to in our attached report of even date


Sd/- Sd/- Sd/- Sd/-

Partner President Vice President TreasurerMembership No. 094380 Place : New DelhiDate : 31st August, 2012 Sd/- Sd/-


Place: Noida, Date: 31st August, 2012

S.S. Kothari Mehta & Co. For and on behalf of the Board



Note 1Significant Accounting Policies:-1. The Company follows the mercantile system of accounting and recognizes income and expenses on

accrual basis. The accounts are prepared on historical cost basis, as a going concern and are consistent with the generally accepted accounting policies.

Subscription from the members is recognised on accrual basis considering the reasonable certainty for the ultimate collection.

Additional contribution received for specific projects have been recognised as income to the extent the same has been utilised for the respective projects and balance unutilised portion has been shown as other current liability.

a) Fixed assets are stated at cost inclusive of all related and other incidental expenses.b) Depreciation on fixed assets is provided on Straight Line Method on pro-rata basis at the rates specified

in Schedule XIV (as amended) to the Companies Act, 1956. In the case of assets costing up to Rs. 5000/-, depreciation is charged at the rate of 100% in the year of purchase.

c) Intangible asset in the form of software is being written off over a period of 5 years from the date of acquisition.

Investments are classified into long term or current. Long-term investments are stated at acquisition cost. Provision

a) Retirement benefits in the form of Provident fund / Pension Schemes is defined contribution schemes and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due.

b) Leave Encashment liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

c) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

d) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

The company is exempt from tax on income under Section 11 of the Income Tax Act, 1961; hence no provision has been made for the same.

Forfeited entrance fee is transferred to Capital Reserve in the case of removal or resignation of any member.

2. REVENUE RECOGNITION

3. FIXED ASSETS AND DEPRECIATION

4. INVESTMENTS

5. RETIREMENT BENEFITS

6. TAXATION

7. FORFEITURE OF ENTRANCE FEE

for diminution in the value of long-term investments is made only if such a decline is other than temporary. Current investments are valued at lower of cost and market rate on individual investment basis.

28 29


Notes to Financial Statements

2 Entrance Fees

3 Reserves and Surplus

Particulars Amount (Rs.) Amount (Rs.)

Opening Balance 6,300,000 4,850,000

Add: Received During the year 3,500,000 1,500,000

Less: Forfeited During the year 50,000 50,000

Total 9,750,000 6,300,000

Particulars As at 31 March 2012 As at 31 March 2011 Amount (Rs.) Amount (Rs.)

Capital Reserve:

Opening Balance 1,450,000 1,400,000

Add: Transferred from Entrance Fee 50,000 50,000

Closing Balance 1,500,000 1,450,000

Special Reserve:

Opening Balance 19,295,173 14,446,792

Add : Transferred from Income & Expenditure Account - 4,848,381

Less : Transferred to Income & Expenditure Account (Net) 1,377,422 -

Closing Balance 17,917,751 19,295,173

General Reserve

Opening Balance 17,829,800 17,829,800

Add : Transferred from Special Reserve - -

Closing Balance 17,829,800 17,829,800

Surplus / (Deficit)

Opening balance 16,271,517 15,043,261

(+) Surplus/(Deficit) For the current year 133,336 6,076,637

Add : Transfer from special reserve (Net) 1,377,422 -

Less : Transfer to special reserve - (4,848,381)

Closing Balance 17,782,275 16,271,517

Total 55,029,826 54,846,490

As at 31 March 2012 As at 31 March 2011

30 31

4 Long Term Provisions

5 Other Current Liabilities

6 Short Term Provisions


Provision for employee benefits

Leave Encashment 1,277,570 1,039,059

Gratuity 1,550,671 1,411,877

Total 2,828,241 2,450,936


Other payables

- Self Regulatory Guidelines Fund 1,799,794 4,200,000

- Broadcast India Survey Fund 48,009,618 57,250,000

-Other Payables 2,758,008 2,738,823

-TDS Payable 12,805 -

Total 52,580,225 64,188,823


Provision for employee benefits

Gratuity (un funded) 20,310 18,781

Leave Encashment (un funded) 13,782 11,281

Total 34,092 30,062


32 33

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,676,2

30

22,8

79,38

2 2

3,295

,938

Tot

al

30,

660,

152

384

,539

5

03,2

23

30,

541,

468

4,0

17,7

33

832

,372

4

28,3

12

4,4

21,7

93

26,

119,

675

26,

642,

419

Previo

us Y

ear

29,7

17,89

3 9

85,89

9 4

3,640

3

0,660

,152

4,01

8,545

7

82,79

6 5

,545

4,01

7,733

2

6,642

,419

26,4

77,41

1

# in

cludin

g ad

dition

s for

Self

Regu

latory

Guid

eline

s fun

d of

Rs. 1

,22,86

6

Parti

cula

rsGr

oss

Carr

ying

Val

ueAm

ortis

atio

nNe

t Ca

rryi

ng V

alue

Bala

nce

Addi

tions

De

duct

ions

/Ba

lanc

e Ba

lanc

e De

prec

iatio

n De

duct

ions

/ Ba

lanc

e Ba

lanc

e Ba

lanc

e as

at

1st

Adjs

as a

t 31

st

as a

t 1s

t fo

r th

eAd

js a

s at

31s

t as

at

31st

as

at

31st

Ap

ril 2

011

Mar

ch 2

012

April

201

1Ye

arM

arch

201

2M

arch

201

2M

arch

201

1

Softw

are 2

10,04

8 -

-

2

10,04

8 1

54,83

7 3

2,285

-

1

87,12

2 22

926

5521

1

Tot

al

210

,048

-

-

2

10,0

48

154

,837

3

2,28

5 -

1

87,1

22

22,

926

55,

211

Previo

us Y

ear

192

,400

17,6

48

-

210

,048

154

,025

812

-

1

54,83

7 5

5,211

3

8,375

9 Non Current Investments

10 Long Term Loans and Advances

11 Other Non Current Assets

12 Trade Receivables

13 Cash and Bank Balances

Particulars As at 31 March 2012 As at 31 March 2011Amount (Rs.) Amount (Rs.)

Other Investments

Investment in Equity Instruments (Non Trade, Unquoted)150000 equity shares (Previous yr. 9999) of Broadcast Audience Research Council (100% subsidiary) 1,500,000 99,990 Total 1,500,000 99,990


Security deposits (others)

Unsecured, considered good 12,800 18,249Total 12,800 18,249


Other Bank Balances (Refer Note No.13.1)

Fixed Deposit 9,700,000 36,859,626 Interest Accrued 265,746 404,055 Total 9,965,746 37,263,681


Unsecured, considered good

Outstanding for a period less than six months - 35,950,000 Total - 35,950,000


Cash & Cash EquivalentsBalances with Schedule banks in :Saving Account 575,315 1,143,932 Cash on Hand 30,974 18,917 Other Bank BalancesFixed Deposits with Bank (Refer Note No.13.1) 68,124,392 14,000,000 Cheques In Hand 250,000 11,003,294 Total 68,980,681 26,166,143

Am

ount

(Rs

.)

Am

ount

(Rs

.)


34 35

13.1

14 Short Term Loans and Advances (Unsecured, Considered Good)

15 Other Current Assets

Particulars As at 31 March 2012 As at 31 March 2011

Amount (Rs.) Amount (Rs.)

Fixed Deposits with Bank

-Upto 3 months maturity from date of acquisition 800,000 10,000,000

-Upto 12 months maturity from date of acquisition 32,500,000 -

-Maturity more than 12 months but within one year from the reporting date 34,824,392 4,000,000

Shown as Current Assets 68,124,392 14,000,000

-Maturity more than 12 months but after one year from 12 months from the reporting date 9,700,000 36,859,626

Shown as Non-current Assets 9,700,000 36,859,626

Total 77,824,392 50,859,626


Other loans and advances

Prepaid Expenses 27,922 22,112

Share Application Money - 1,400,010

Advance for Broadcast fest 7,048,411 -

TDS recoverable 899,691 49,100

Employees Advance 6,000 -

Total 7,982,024 1,471,222


Interest accrued 5,638,532 149,396

Total 5,638,532 149,396

16 Subscription

17 Other Income

18 Employee Benefit Expenses

19 Depreciation & Amortization

Particulars For the Year ended For the Year ended2011-12 2010-11

Membership Subscription 16,700,000 14,300,000

Subscription for:

Self Regulatory Guidelines Fund 2,400,206 -

Broadcast India Survey Fund 9,240,382 -

Total 28,340,588 14,300,000


Interest Income 7,706,869 2,578,191

Interest on TDS Refund - 171,110

Total 7,706,869 2,749,301

Particulars For the Year ended For the Year ended

2011-12 2010-11

Salaries and Wages 6,544,960 5,845,589

Contribution to Provident and Other Funds 442,172 357,090

Staff Welfare Expenses 131,237 114,550

Total 7,118,369 6,317,229


Depreciation 832,372 782,796

Amortization 32,285 812

Total 864,657 783,608

Amount (Rs.)

Amount (Rs.)

Amount (Rs.)

Amount (Rs.)


36 37

20 Other ExpensesParticulars For the Year ended For the Year ended

2011-12 2010-11

Expenses on Special Project:

- Self Regulatory Guidelines Expenses 2,277,340 -

- Broadcast India Survey Expenses 9,240,382 -

Frame Support Exp. 2,214,699 -

Production cost for digitalisation campaign 1,045,688 -

IBF's Website Exp. 165,950 -

Legal & Consultancy Charges 9,224,075 547,934

Travelling & Conveyance Expenses 1,231,668 970,641

Repair & Maintenance:

- Building 925,918 862,064

- Plant & Machinery 25,716 32,031

Auditor's Remuneration

- Audit fees 121,330 110,300

- Income Tax Matters 16,545 -

- Out of Pocket Expense 6,618 5,515

Rates & Taxes 78,989 78,200

Board Meeting Expenses 185,160 69,420

Conference & Meeting Expenses 96,003 303,088

Books & Periodicals 221,046 188,554

Loss on Sale of Fixed Assets 59,908 37,094

Car Maintenance Expenses 75,400 50,395

Communication Expenses 238,482 219,806

Electricity & Water Charges 114,138 108,693

Printing & Stationery 145,077 105,072

Miscellaneous Expenses 43,598 28,494

Entertainment Expenses 177,365 154,526

Total 27,931,095 3,871,827

Amount (Rs.) Other Notes to Accounts

21. The company is a Small-and Medium Sized Company as defined in the general Instructions in respect of Accounting Standards notified under the Companies Act, 1956. Accordingly, the company has complied with the Accounting Standards as applicable to Small and Medium Sized Company.

22. Special reserve has been created under Section 11 of the Income Tax Act, 1961, by transferring the unutilised amount in excess of 15% of the total income for the purpose of construction of the building/office of the company, to carry out research and other works relating to the interest of the company and setting up of branch offices in other parts of India.

Further, during the year, company has incurred expenditure of Rs 22,14,699/- for the purpose of doing research on impact of television on India, which is utilised from special reserve created under Section 11 of the Income Tax Act, 1961, by transferring the unutilised amount in excess of 15% of the total income in the previous years . Accordingly, this amount has been appropriated from special reserve after netting off the amount required in above para.

23. In the opinion of the management, the value on realisation of current assets, loans & advances in the ordinary course of activities would not be less than the amount at which they are stated in the Balance Sheet and provisions for all known liabilities has been made.

24. Sundry Creditors include Rs. 25,88,555/- collected from IBF members as contribution towards expense sharing incurred by Joint Working Committee of IBF and AAAI in pursuance to the agreement dated 26th March 2008.

25. As per the directions of honourable Supreme Court, Company has implemented a Self Regulatory Guidelines for content for non news channels and complete redressal mechanism. Accordingly, the management of the company has started receiving additional contributions from the members for meeting the cost of the implementation. Similarly, during the year IBF’s Committee on BARC, Research and Insight proposal has been made functional with the start of Broadcast India Survey. Accordingly, expenditure incurred during the year on the said activity and contribution received to that extent has been shown separately in the Income & Expenditure account.

26. During the year company’s management has taken a important step to recruit secretary general for the company. In respect of its appointment, it has hired a professional agency and accordingly it has incurred professional fee of Rs. 57.08 lacs, which is included in legal & professional charges.

27. In pursuance to the Board resolution, Company has paid some advance as a part of initial seed funding support, for the proposed Broadcast fest to be held in the financial year 2012-13. The overall amount paid/to be paid as advance will be recovered from the Exhibitions, Delegate Fees, Sponsorship Revenues and Partnership Fees. Accordingly, this amount has been shown seprately under the heading of Short Term Loans and Advances in note no. 14.


28.EMPLOYEE BENEFITS

In accordance with the Accounting Standard on Employee Benefits (AS 15) (Revised 2005) notified by the Companies (Accounting Standards) Rules, 2006, the following disclosures have been made:

a. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at last drawn salary plus dearness allowance for each completed year of service. The Scheme is unfunded.

b. The Company has a defined benefit leave encashment plan, which is unfunded. Every employee, from the date of joining gets 12 leaves in year for each completed year of service subject to maximum of 240 leaves with an encashment capping of 90 days on exit.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plan (as per Actuarial Valuation as on March 31, 2012).

Net employee benefit expense (recognised in the Statement of Profit & Loss for the year ended March 31, 2012)

2011-2012 2010-2011

Leave Gratuity Leave GratuityEncashment Encashment

Current Service Cost 1,07,922 1,51,076 96,144 1,31,796

Interest Cost on benefit obligation 79,826 1,08,730 69,384 101,162

Expected return on plan assets Past Service Cost - - - -

Actuarial (gain) / loss recognised in the year 53,264 (1,19,483) (28,129) (7,83,373)

Net benefit expense 2,41,012 1,40,323 1,37,399 99,585

Actual return on Plan Assets - - - -

38 39

Particulars

Net Asset / (Liability) recognised in the Balance Sheet as on March 31, 2012

2011-2012 2010-2011

Leave Encashment Gratuity Leave Encashment Gratuity

Present Value of Defined Benefit Obligation 12,91,352 15,70,981 10,50,340 14,30,658

Fair Value of Plan Assets - - - -

Net Asset / (Liability) recognized in the Balance Sheet (12,91,352) (15,70,981) (10,50,340) (14,30,658)

Particulars

Contribution to Defined Contribution Plans:

Particulars 2011-2012 2010-2011

Provident fund / Pension Fund 4,11,031 3,25,048

Changes in the present value of Defined Benefit Obligation are as follows:

2011-2012 2010-2011

Leave Encashment Gratuity Leave Encashment Gratuity

Opening defined benefit obligation 10,50,340 14,30,658 9,12,941 13,31,073

Interest Cost 79,826 1,08,730 69,384 1,01,162

Past Service Cost - - - 6,50,000

Current Service Cost 1,07,922 1,51,076 96,144 1,31,796

Benefits Paid - - - -

Actuarial (gain) / loss on obligation 53,264 (1,19,483) (28,129) (7,83,373)

Closing defined benefit obligation 12,91,352 15,70,981 10,50,340 14,30,658

The principal assumptions used in determining leave liability and gratuity liability for the Company's plan is shown below:

Particulars 2011-2012 2010-2011

Discount Rate 7.60% 7.60%

Rate of increase in Compensation 10% 10%

Rate of Return on Plan Assets - -

Average Outstanding Service of Employees upto Retirement (years) 20.56 18.92

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Particulars


40

29. There are no Micro and Small Enterprises, to whom the Company owes dues as at 31st March 2012. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Further during the year also company has not paid any interest to any such parties.

30. Figures of the previous year have been redrawn to confirm to the current year's classification as per the notification of revised Schedule VI under The Companies Act, 1956 for the financial commencing on or after 1st April 2011.

31. Financial figures have been rounded off to the nearest of Rupee.


Partner President Vice President TreasurerMembership No. 094380 Place : New DelhiDate : 31st August, 2012


Place : Noida, Date: 31st August, 2012

S.S.Kothari Mehta & Co. For and on behalf of the Board



Sd/-

Sd/- Sd/-

Sd/- Sd/- Sd/-

IBF Board of Directors for 2011-2012

PRESIDENT

Mr. Uday ShankarSTAR India Pvt. Ltd.

VICE PRESIDENT

Mr. Sunil LullaTimes Television Network

TREASURER

Mr. Punit GoenkaZee News Ltd.

OTHER BOARD MEMBERS

Mr. B. SaikumarNetwork 18

Mr. I. VenkatEenadu TV

Mr. Jawahar GoelZee Network

Mr. Jayant M. MathewMM TV Ltd.

Mr. K. MadhavanAsianet Communications

Mr. K.V.L. Narayan RaoNDTV

Mr. Man Jit SinghMultiscreen Media Pvt. Ltd.

Mr. Markand AdhikariSri Adhikari Bros. TV Network Ltd.

12th IBF AGM, Delhi – 19th September, 2011

Dinner with the I&B Minister, Delhi – 19th September, 2011


Indian Television Fest 2012 Media Announcement, Mumbai – 1st August, 2012


Mr. Raj NayakViacom 18

Mr. Siddharth JainTurner International India Pvt. Ltd.

Mr. Rajat SharmaIndia TV


13 thannual report

2011-12

Indian Broadcasting FoundationB-304, 3rd Floor, Ansal Plaza

Khelgaon Marg, New Delhi-110049, IndiaTel.: 91-11-43794400 Fax: 91-11-43794455

Email: [email protected] Website: www.ibfindia.com

For details, log onto www.indiantvfest.com

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