UNIVERSAL MEDIA NETWORK LIMITED
ANNUAL REPORT 2001-2002
Your Directors have pleasure in presenting the 11th Annual Report of the
Company with the Audited Statement of Accounts and the Auditors' Report
thereon for the Financial year ended 31st March, 2002.
In view of marginal profit of the Company during the year, the Directors
express their inability to recommend any dividend for the Year ended
Board of Directors has recommended Bonus Shares in its Board Meeting to
members in the ratio of 1 : 5 i.e. One Fully Paid-up Bonus Shares for every
Five number of Equity Shares held in the Company, subject to approval of
members in General Meeting. A sum of Rs. 3,00,00,000/- ( Rupees Three
Crores Only ) is proposed to be capitalized from Share Premium Account by
issuance of 1,50,00,000 Equity Shares of Rs.2/-.
REVIEW OF OPERATIONS
During the year under review your company performance was satisfactory and
your directors are confident of improvement in performance of the company
in the current year.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company had no foreign exchange earnings during the period under
review. The foreign exchange outgo during the year was Rs.65,000/-
PARTICULARS OF EMPLOYEES
None of the employee of the Company was in receipt of remuneration in
excess of limits prescribed under Section 217(2A) of the Companies Act,
1956. Hence, particulars as required under the Companies (Particulars of
Employees) Rules, 1975 are not given.
Shri Santosh Kumar Jain and Shri Siddhartha Srivastava resigned from the
Board of Directors of the Company with effect from 30 st October, 2001 and
15 th November, 2001, respectively. The Board of Directors place on record
their appreciation forthe valuable services rendered by them during the
tenure of their office.
Shri Manish A. Pardiwala has been appointed as an additional Director of
the Company with effect from 30 th October, 2001. In terms of section 260
of the Companies Act, 1956, he holds office upto the date of ensuing Annual
General Meeting. The Company has received notice from a member pursuant to
section 257 of the Companies Act, 1956 signifying his intention to propose
the candidature of Shri Manish A. Pardiwala as Director of the Company. The
appointment of Director requires the approval of members, for which
necessary resolution has been incorporated in the notice of Annual General
In accordance with the provisions of the Companies Act, 1956 and the
Companies Articles of Association, Shri P .R. Parasuram retires by rotation
at the ensuing Annual General Meeting and being eligible offers himself for
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) they have 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
Company as at 31 st March, 2002 and of the profit of the Company for the
year ended on that date;
iii) they have taken proper and sufficient care forthe maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of The Company and for
preventing and detecting fraud and other Irregularities;
iv) they have prepared the annual accounts on a going concern basis.
The Company has not accepted any deposit within the meaning of Section 58A
of the Companies Act, 1956 and the rules made thereunder.
Pursuant to Section 292A of the Companies Act, 1956 and Clause 49 of the
Listing Agreement the Board has constituted the Audit Committee comprising
of the following Directors as its members:
2) Shri Paresh Shah
3) Shri Santosh Kumar Jain
4) Shri Manish Pardiwala
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Your company is not covered by schedule which requires to furnish details
in Form A & B as per the provision of Section 217(1) (e) of the Companies
Act, 1956 read with the Companies ( Disclosures of Particulars in the
report of Board of directors ) Rules, 1988.
M/S P K. Ajitsaria & Co., Chartered Accountants, Auditors of the Company,
have expressed their desire not to seek reappointment as Auditors of the
Company. The Board therefore recommends the appointment of M/S. Prodyot
Bhattacharya & Associates, Chartered Accountants, Mumbai, as the Auditors
of the Company at the ensuing Annual General Meeting. The Company has
received a consent letter from them to the effect that their appointment,
if made, would be within the prescribed limits under Section 224 (1 B) of
the Companies Act, 1956. The Notes to Accounts referred to in the Auditors'
Report are selfexplanatory, do not call for any further comments.
A certificate from the Auditors of the Company regarding compliance of
conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement is attached to this Report.
The Board expresses its sincere gratitude to the shareholders, bankers and
clients for their continued support. The Board also wholeheartedly
acknowledges the dedicated efforts of all the staff and employees of the
For and on behalf of the Board of Directors
ASHOK KUMARMISHRA RR.PARASURAM
Managing Director Director
Place: Mumbai Date: 4 th July, 2002.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENTS:
Entertainment is now thought of as a commodity which continuously evolved
with the current market supply and demand factors. It is a potential
revenue generator for the economy, though currently the share of
entertainment revenue in India's GDP is not even a percentage. The
increased avenues & with latest technologies in entertainment, this
industry is ready to "take-off". Factors that induces the growth of this
industry by improving access to more and better avenues of entertainment
are higher standard of living, increased urbanisation and advancement in
The industry needs to invest in technology and infrastructure to scale up
operations, for which it will require funds. It has to organise its
activities in a very systematic manner if it intends to source funds from
capital market, private equity investors or from any financial institution.
Television continues to be the leading entertainment medium in India. Cable
& satellite television has been primarily responsible for the rapid growth
of television in India. It reaches to almost 50.6% of the total population
of the Country.
Digital technology is now being used in every segment of the entertainment
industry. Going forward, digital technology is expected to pervade the
industry. This will revolutionise both creation and delivery of
entertainment content. The major broadcasters in India have already gone
digital. Channels are also focusing on acquiring the best technology
available worldwide, be it cameras, editing equipment, special effects
gizmos or graphic design devices.
The Channel industry is a capital intensive one with high cost of
equipments. In the initial stages, the company has to bear heavy
depreciation and interest costs as a result of additional purchase of
Television continues to be the leading entertainment medium in India, with
television viewership accounting for the largest slice of an urban Indian's
media consumption pie. According to the Indian Readership Survey 2001 ( IRS
2001 ), the share of television has increased from 62% of media consumption
in 1995 to 72% in 2001. Television garnered 40.5% of the total advertising
expenditure (ad spend) in the country in 2001, second only to the print
media, as per the industry estimates.
The Rs 94 on television industry in India is broadly segmented into
television broadcasting, cable television and television software with the
3 segments accounting for 38%, 43% and 19% of total industry size
Television accounted for 40.5% of total ad spend in 2001, up from 39.4% in
2000, according to industry resources. In urban areas, it reached 78.7% of
the population, up from 78% in 2000, and in rural areas, its reach
increased to 39.8% from 35% in 2000.
The Government of India (Gol) has liberalised the uplinking policy to allow
the country to develop as a centre for broadcasting. .
The political and economic environment in India is quite fluid and has its
impact on the policy of the Government. Although the GDP has grown by 5.4%,
it has no impact on entertainment industry. Recessionary conditions in the
domestic and global economies appear to have hardened. Weak independent
channels not forming part of a package or bouquet would find it hard to
survive. They might fold up or may be acquired by a package or bouquet. The
main sources of revenue for the channels will be from ad revenues and this
will continue for at least next 3 to 4 years. There will be growth in
demand, but it will be only for quality programme.
In the coming days, more channels and bouquets are expected to come
together to form larger bouquets. This consolidation will be driven by the
need for bouquets to offer the full range of programming genre and for more
effective ground distribution.
Standard entertainment will no longer be acceptable and channels will need
standout programmes that create an identity for the channel. The content
will be the driver of channel success.
Looking ahead, the outlook of the industry appears to be strong and the
primary engines of growth for the entertainment industry will be growth in
GDP, change in population demographics and increasing adoption of digital
technology by the industry
In terms of future prospects, the television broadcasting segment is
expected to grow to a size of Rs 80.93 bn by 2006. According to industry,
reports on advertising trends, the total adspend (calculated on the basis
of current prices) in the country in 2001 was Rs 78.55 bn. Total adspend is
expected to increase to Rs 85.93 bin in 2002, Rs 96.52 bn in 2003 and Rs
103.83 bn in 2004. The principal driver for this increase would be growth
in GDP, which is expected to be about 10% in nominal terms.
The trends in the current year are encouraging. The economy is picking up.
The company also expects increase in adspend and demand for quality
content. The company is also exploring possibilities for uplinking of
Channels. During the current year the company expects improvement in the
overall operation and profitability.
The long term objective of the Company is to remain as strong player in the
entertainment industry with strong emphasis on quality programme and
technology upgradation. Your company is focusing on acquiring the best
technology. With increase in the number of channels and heightened
competition for viewership, content will be the most important factor for
the success of any channel.The channel will have to create an identity for
themselves by producing quality programmes. The Company will strive to
improve its position in the market place.
Your company's outlook in the near term remains positive. Based on
initiatives already in place, and those under implementation, your company
looks forward, confidently, to successfully take on competition from
existing as well as new players.
INTERNAL CONTROL SYSTEMS ANDTHEIRADEQUACY
The Company has in place adequate internal control systems and procedures
commensurate with the size and nature of its business .these procedures are
designed to ensure
* That all assets and resources are used efficiently and are adequately
* That all internal policies and statutory guidelines are complied with;
* The accuracy and timing of financial reports and management information.
FINANCIAL OPERATIONAL PERFORMANCE.
During the year under review, the sale of software aggregated Rs 92.64 lacs
and resulting in a Profit AfterTax of Rs 10.48 lacs. In the current year,
the company is expecting good revenue from sale of software.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT NUMBER
OF PEOPLE EMPLOYED.
The Company believes that people are the key ingredient to the success of
an organization. The Company recognizes the importance and contribution of
its Human resources for its growth and development and is committed to the
development of its people. The Company has started introducing methods and
practices for Human Resources Development.
Statement in the Management's Discussion and Analysis describing the
Company's projections estimates, expectations or predictions may be forward
looking predictions within the meaning of applicable securities laws and
regulations. These forward looking statements are based on certain
assumptions and expectations of future events over which the Company
exercises no control. The Company can not guarantee that these assumptions
and expectations are accurate or will be realised. Actual results may
differ materially from such estimates, projections, etc.
whether expressed or implied.
Significant factors that could make a difference to the Company's business
include, government regulations, policy of Cable operators and other
The Company assumes no responsibility to publicly amend, modify or revise
any forward looking statements on the basis of subsequent development,
information or events.
For and on behalf of the Board of Directors
ASHOK KUMARMISHRA PR.PARASURAM
Managing Director Director
Place: Mumbai Date: 4 th July, 2002.