CORPRATE ACCOUNTING ASSINGMENT

By N.Santhoshni B.Com(general) 2nd Year

SUN TV NETWORK LIMITED

CONTENTS

Companys Profile...........................................................................................4 Founder Of The Company............................................................................5 Corporate Information................................................................................6 History Of The Company.............................................................................7 Approval Of Merger.....................................................................................8 Subsidiaries..................................................................................................10 Products And Operations...........................................................................11 Financial Information.................................................................................13 Notes To Accounts......................................................................................16 Shareholding Pattern.................................................................................22 Auditors Report..........................................................................................23 Conclusion......................................................................................................30

COMPANYS PROFILE

SUN TV LIMITED

Type Industry Founded Headquarters Area served

Private Media, film production, distribution, telecommunication 1993 Chennai, Tamil Nadu, India 27 countries including U.S.A, Canada, Europe, Singapore, Malaysia, Srilanka, South Africa, Australia and New Zealand Kalanidhi Maran Sun TV Dinakaran Suryan FM Red FM 93.5 Sun Pictures Sun Direct DTH Sun Group Sun TV Network Web site

Key people Products

Parent Website

FOUNDER OF THE COMPANY

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Kalanithi Maran
Born 1964 Tamilnadu India

Occupation Known for Net worth Spouse Children

Entrepreneur Founder of Sun Network US $ 4 billion (2010) Kaveri Kavya

CORPORATE INFORMATION BOARD OF DIRECTORS:

Kalanithi Maran-chairman & Managing Director Kavery Kalanithi-Joint Managing Director

S.Selvam-Director S.Sridharan-Independent Director J.Ravindran- Independent Director M.K.Harinarayanan- Independent Director Nicholas Martin Paul- Independent Director

SECRETARY:

R.Ravi-Company Secretary & Compliance Officer

BANKERS:

City Union Bank,Mandaveli,Chennai. Royal Bank Of Scotland,N.V,Chennai. Kotak Mahindra Bank,Teynampet, Chennai. Standard Chartered Bank,Haddows Road, Chennai. KVB, Teynampet, Chennai. ICICI Bank, Teynampet, Chennai. HDFC Bank,ITC Centre, Chennai. Axis Bank,Mylapore, , Chennai. Corporation Bank, Mylapore, Chennai. Indian Bank,Kodambakam, Chennai.

AUDITORS:

M/s S.R.Batliboi & Associates, Chartered Accountants, TPL House,Second Floor, 3,Cenotaph Road,Teynampet,Chennai-18.

REGISTERED OFFICE:

OFFICERS:

Murasoli Maran Towers, 73,MRC Nagar Main Road, MRC Nagar,Chennai-28.

K.Vijaykumar-Chief Operating Officer V.C.Unnikrishnan-Chief Financial Officer S.Kannan-Chief Technical Officer

HISTORY OF THE COMPANY

Our Company was incorporated as Sumangali Publications Private Limited on December 18, 1985. The word `private' in the name of our Company was deleted with effect from July 1,1996

pursuant to Section 43A(1A) of the Companies Act, 1956. The name of our Company was changed to Sun TV Limited by a special resolution of the members passed at an extraordinary general meeting held on March 23, 2000. The fresh certificate of incorporation consequent to the change of name was granted to our Company on March 27, 2000, by the Registrar of Companies, Tamil Nadu. The word 'private' was reinserted in the name of the Company by the provisions of Section 43A(2A) of the Companies Act, 1956 on October 9, 2001. The status of our Company was subsequently changed to a public limited company by a special resolution of the members passed at an extraordinary general meeting held on December 15, 2005. The fresh certificate of incorporation consequent on change of name was granted to our Company on December 27, 2005, by the Registrar of Companies, Tamil Nadu. Additionally, the registered office was shifted from 182, Kodambakkam High Road, Chennai 600 034, India to 367/369, Anna Salai, Chennai 600 018, India with effect from December 12, 2005 by a resolution of our Board dated December 5, 2005.

Broadcasting:
Sun TV was first launched in Tamil, on April 14,1993 with three hours of programming everyday, by Mr. Kalanithi Maran. The amount of programming was gradually increased over a period of time with Sun TV becoming a 24 hour channel in January 1995. Sun TV is currently a free to air channel. Following the launch of Sun TV, we launched Sun News, our news and current affairs based channel in May 2000. We launched KTV, a 24 hour film based Tamil channel with its primary focus on films and film based programme in October 2002. We launched Sun Music, the first 24 hour Tamil music channel, in September, 2004. This channel features film and non film based programmes. Sun News, KTV and Sun Music were subsequently converted into pay channels. We launched our first Malayalam channel Surya TV in October 1998. The channel has a programming mix of both film based and non film based programmes. We launched a film and music based 24 hour Malayalam language channel, Kiran TV, in January 2005.

FM RADIO:

We launched our first radio Frequency Modulation (FM) channel in Tamil in three major cities of Tamil Nadu, i.e., Chennai in May 2003 and in Coimbatore and Tirunelveli in March 2003.

APPROVAL OF MERGER
27th November, 2006.
The Board of Directors of SUN TV Limited have in principle approved the scheme of arrangement viz., Amalgamation of Gemini TV Private Limited with Sun TV Ltd., and Merger of All Divisions of Udaya TV Private Limited, except the FM Radio Division of Udaya TV Private Limited with Sun TV Ltd. The Board of Directors have appointed M/s. Enam Financial Consultants Private Limited and M/s. DSP Merrill Lynch Limited as advisors.Gemini TV Private Limited, owns five television channels, Gemini TV, Teja TV, Gemini News, Gemini Music and Gemini Cable Vision, and is operating with a revenue of Rs. 17,469 lakhs for the year ended 31.3.2006. Gemini TV is the No.1 Telugu Channel in theCountry for the past several years (Source:TAM). Udaya TV Private Limited, owns four television channels, Udaya TV, Udaya Movies, Udaya Varthegalu and Udaya TV II, and is operating with a revenue of Rs. 9,431 lakhs for the year ended 31.3.2006. Udaya TV is the No.1 Kannada channel in the Country for the past several years (Source: TAM).

Mr. Kalanithi Maran, Chairman & Managing Director of SUN TV Limited says that With this proposed merger Sun TV Limited shareholders should benefit immensely from the highly profitable operations and strong growth plans of both Gemini TV Private Limited and Udaya TV Private Limited. Sun TV Limited will have an integrated growth strategy for all south Indian language channels, and thus build a dominant presence in entire south India.Mr. A.M. Prasad, of Gemini TV Private Ltd., says The integration of Gemini TV Private Limited into Sun TV Limited would be value accretive for all Gemini TV shareholders on account of the business synergies between the two companies and the benefits of being part of a larger corporate entity. Mr. Selvam, of Udaya TV Private Ltd., says We are very happy to be fully integrated with Sun TV Limited which will, no doubt, help us consolidate and further build up our presence in he Kannada language markets.Sun TV Limited currently operates four television channels Sun TV, KTV, Sun News and Sun Music - in Tamil language and two television channels Surya TV and Kiran TV in Malayalam language, and three FM Radio Stations, and another three FM Radio Stations through its subsidiaries. The two subsidiaries of Sun TV Ltd., Viz., Kal Radio Ltd and South Asia FM Ltd., jointly holds 41 FM Radio Licences for FM Radio Stations across India. The revenue for the year ending 31st March, 2006 of Sun TV Ltd., is Rs.33, 911 Lakhs and for the half year ending 30th September, 2006, is Rs.20, 494 Lakhs.With this proposed merger Sun TV Ltd., will become one of the largest television broadcasters in India.

SUBDIARIES
The two subsidiaries Kal Radio Limited and South Asia FM Limited together own 41 licenses of which 40 Radio stations were fully operational for the year under review. The revenue of the two

subsidiaries were at Rs. 86.99 crores for the year under review as against Rs. 56.24 Crores for the previous year ended 31 st March, 2010. After accounting for minority interest in South Asia FM Limited the share of loss of the two subsidiaries (Kal Radio Limited and South Asia FM Limited) is Rs. 1.68 crores as against Rs. 39.43 crores in the previous year. Ministry of Corporate Affairs, Government of India has vide its general circular No. 2/2011 granted general exemption from the requirement to attach various documents in respect of subsidiary companies, as specified in sub-section (1) of Section 212 of the Companies Act, 1956. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies, as required by the said circular, is disclosed elsewhere in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies. During the previous year your company had incorporated a wholly owned subsidiary Sun TV Network Europe Limited in United Kingdom to Broadcast and distribute its channels in U.K. and Europe and it has started earning revenues. The total revenue of Sun TV Network Europe Limited is Rs. 13.47 crores as against Rs. 3.32 Crores in the previous year and the Net Loss after taxes is Rs. 2.88 crores as against Rs. 8.05 Crores in the previous year.

PRODUCTS & OPERATIONS OF THE COMPANY

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Television Channels Category Entertainment Channels Music Channels Movie Channels News Channels Comedy Channels Kids Channels Tamil Sun TV Sun Music K TV Sun News Adithya TV Chutti TV Telugu Gemini TV Gemini Music Gemini Movies Gemini News Gemini Comedy Kushi TV Kannada Udaya TV Udaya Music Udaya Movies Udaya News Udaya Comedy Chintu TV Malayalam Surya TV Kiran TV Kochu TV

Print media:

Dinakaran - (Daily Morning Newspaper) Tamil Murasu - (Daily Evening Newspaper) Kungumam Mutharam Vannathirai Kumguma Chimizh

Radio stations:
Sun Network owns two Radio brands: Suryan FM and for other territories than Tamil Nadu, Red FM. Sun is one of the largest Radio broadcasters in India.

Tamilnadu

TAMIL

Chennai

SURYAN FM 93.5 MHZ Trichy Coimbatore Madurai

Tirunelveli

Tuticorin

Puducherry

State Kerela Andhra pradesh

Language MALAYA LAM TELUGU

1 Kochi Rajamundry

RED FM 93.5 MHZ 2 3 Trissur Kannur Hyderabad Tirupati

4 Kozhikode Vijayawada

5 Thiruvanan thapuram Vishakapat nam

6 Warangal

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Karnatak a Maharas htra Uttar pradesh Gujarat Madhya pradesh

with a 48.9% stake

KANNAD A HINDI /OTHER HINDI /OTHER HINDI /OTHER HINDI /OTHER HINDI /OTHER HINDI /OTHER HINDI /OTHER

Bengaluru Aurangabad Lucknow Rajkot Indore Asansol Gangtok New Delhi

Mangalore Pune Varanasi Vadodara Bhopal Jamshedpu r Siliguri Mumbai

Mysore Nashik Kanpur Ahmedab ad Jabalpur Guwahati Shillong Kolkata

Gulbarga Nagpur Allahabad Jaipur -

Bhubanesh war -

UP COMING CHANNELS:
1. GEMINI ACTION 2. GEMINI LIFE 3. GEMINI TV HD 4. K TV HD 5. SUN ACTION 6. SUN LIFE 7. SUN MUSIC HD 8. SUN NEWS ENGLISH 9. SUN TV HD 10. SUN TV R1 11. SURIYAN TV 12. SURYA ACTION

FINANCIAL INFORMATION Balance Sheet(Amts In Millions Of Indian Rupees) As On 31.3.2011

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Particulars SOURCES OF FUNDS Shareholders Fund

March 31,2011

March 31,2010

Share Capital Reserves & Surplus Deffered Tax Liability(Net)

TOTAL APPLICATION OF FUNDS

1970.4 21,886.7 409.8 24266.9

1970.4 18,179.7 339.1 24266.9

Fixed Assets Intangible Assets Capital Work In Progress Intangible Assets Under Development Investments Non-Current Assets Current Assets,Loans & Advances Less:Current Liabilities & Provisions Net Current Assets
TOTAL

7940.1 1876.5 151.9 18.7

5072.4 1477.4 1593.2 1520.7

5411.7 136.7 12936.7 (4205.4) 8731.3 24266.9

5066.4 300.0 9776.3 (4317.2) 5459.1 24266.9

Profit & Loss Account(Amts In Millions Of Indian Rupees) For The Year Ended 31.3.2011

Particulars

March 31,2011

March 31,2010

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INCOME

Revenues From Service Other Income

TOTAL INCOME EXPENDITURE

19237.1 467.9 19705.0 (1027.1) (1740.1) (799.8) (91.2) (19.8) (717.5) (3756.3) (8151.8) 11553.2 (3831.0) 7722.2 11490.7 19212.9 (1970.4) (327.3) (1477.80 (239.7) (772.2) 14425.5

13950.1 425.1 14375.2 (888.8) (1160.1) (718.9) (76.8) (12.0) (718.3) (2136.1) (5711.0) 8664.2 (2990.4) 5673.8 9833.1 15506.9 (591.1) (100.5) (2364.5) (392.7) (567.4) 11490.7

Cost Of Revenues Employees Remuneration General & Administration Expenses Selling Expenses Financial charges Depreciation On Fixed Assets Amortisation Of Intangible Assets
TOTAL EXPENDITURE PROFIT BEFORE TAX

Total Tax Expense

PROFIT AFTER TAX

Accumulated Profit(beginning)
PROFIT AVAILABLE FOR APPROPRIATION

Interim Dividend Tax On Interim Dividend Interim Dividend Tax On Interim Dividend Transfer To General Reserve
PROFIT C/F TO BALANCE SHEET

Cash Flow Statement(Amts In Millions Of Indian Rupees) For The Year Ended 31.3.2011

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Particulars

March 31,2011 March 31,2010

Net Profit Before Tax

11553.2

8664.2

Net Cash From Operating Activities

11413.7

7789.5

Net Cash (Used In) Investing Activities

(5822.8)

(6652.0)

Net Cash (Used In) Financing Activities

(5069.9)

(1159.4)

Net (Decrease)/Increase In Cash & Cash Equivalents Cash & Cash Equivalents (beginning)

517.0

(16.8)

329.8

346.6

Cash & Cash Equivalents(end)

846.8

329.8

Notes to Accounts Year End : Mar '11: 1.1Background:

Sun TV Network Limited (''Sun TV or ''the Company'') was incorporated on December 18,1985 as Sumangali Publications Limited. The

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Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India. The Company is listed on the Bombay Stock Exchange (''BSE'') and the National Stock Exchange (''NSE'') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka,Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company''s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company''s film production / distribution division ''Sun Pictures'' undertakes production / distribution of movies in the Tamil language. During current year, the Company released a blockbuster movie simultaneously in three languages titled ''Enthiran'' in Tamil and ''Robot'' in Telugu and Hindi''. The Company earned revenues of Rs.179 crores, including Rs. 8 crores expected towards satellite rights which has not been included in the revenues in current year. The Company has spent Rs.132 crores on the production of this blockbuster.

Quantitative information as per the Act:

Due to the nature of its business, the requirements relating to the quantitative details of sales and the information under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company except to the extent disclosed in these financial statements.

1.2 Contingent Liabilities not provided for:

31.03.2011 Income Tax* 719.4 31.03.2010 587.7

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Customs Duty**

5.0 724.4

5.0 592.7

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Company''s claim is likely to be accepted by appellate authorities. ** The Company has received demand for differential customs duty on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

1.3 Dues to Micro, Small and Medium Enterprises:

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the current and previous year.

1.4 Leases:
Operating leases (As a Lessee) The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Employee benefit plans Gratuity:

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 15 days salary (last drawn salary) for each completed

17

year of service.The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Gratuity plan. The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed. The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period over which the obligation is to be settled.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.

1.5 Related party disclosures (to the extent not disclosed elsewhere in these financial statements):
1. Controlling Party Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence Kal Comm Private Limited Kal Cables Private Limited Kal Investments (Madras) Private Limited Network Cable Solutions Private Limited Sun Direct TV Private Limited Sun Academy Private Limited Kungumam Publications Private Limited

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Udaya FM Private Limited Sun 18 Media Services South Private Limited Kal Airways Private Limited Kal Holdings Private Limited Kungumam Nithyagam Private Limited Kal Publications Private Limited D.M.S Entertainment Private Limited HFO Entertainment Private Limited D.K. Enterprises Private Limited Sun Foundation Murasoli Maran Family Trust Kal Media Services Private Limited Spicejet Limited Sun Business Solutions Private Limited

3. Subsidiary Companies South Asia FM Limited Kal Radio Limited Sun TV Network Europe Limited

4. Associates AV Digital Networks (Hyderabad) Private Limited Asia.Radio Broadcast Private Limted

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Digital Radio (Kolkata) Broadcasting Limited Metro Digital Networks (Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5. Key Management personnel Mr. Kalanithi Maran - Chairman and Managing Director Mrs. Kavery Kalanithi - Joint Managing Director

6. Relatives of Key Management personnel Mrs. Mallika Maran

1.6 Export Obligation:

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods. Accordingly, the Company currently has an export obligation aggregating to Rs. 2,028.8 million (March 31,2010 Rs. 243.9 million).

1.7 Prior year comparatives:

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Prior year figures have been regrouped wherever necessary to conform to the current year''s classification.

FINANCIAL HIGHLIGHTS(Rs. In Millions)

Particulars

March 31,2011 19705.0 (8132.0) 11573.0 (19.8) 11553.2 (3831.0) 7722.2 11490.7 (1970.4) (327.3) (1477.80 (239.7) (772.2) 14425.5 19.6

March 31,2010 14375.2 (5699.0) 8676.2 (12.0) 8664.2 (2990.4) 5673.8 9833.1 (591.1) (100.5) (2364.5) (392.7) (567.4) 11490.7 14.40

Total Income Total Expenditure(excluding Interest & Financial Charges) Profit Before Interest & Tax Interest & Financial Charges
PROFIT BEFORE TAX

Provision For Taxation

PROFIT AFTER TAX

Accumulated Profit(beginning) Interim Dividend Tax On Interim Dividend Interim Dividend Tax On Interim Dividend Transfer To General Reserve
PROFIT C/F TO BALANCE SHEET Earnings Per Share(Face Value Rs,5/-)

Shareholding Pattern As On 31.3.2011

21

Category

% To Total Capital 77.00 0.04 9.55 3.02 10.39

Promoter Group Financial Institutions/Bank Non Residents(NRI/OCB/FIIS) Mutual Funds Others Total

100.00

Distribution Of Shareholding As On 31.3.2011

Category

No.Of Holders

% To Total

No.Of Shares

%To Total

1-10000

29010

99.16

2523002

0.64

Above 100000

245

0.84

391561618

99.36

Total

29255

100

39,40,84,620

100

Auditor's Report (Sun TV Network) Year End : Mar '11

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1. We have audited the attached Balance Sheet of Sun TV Network Limited (''the Company'') as at March 31,2011 and also the Profit and Loss Account and the Cash Flow Statement 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. 2. 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. 3. As required by the Companies (Auditor''s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Furtherto ourcomments in theAnnexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary forthe purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the

23

accounting standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956; v. On the basis of the written representations received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and vi. In our opinion and to the best of our information and according to the explanations given to us, the said 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; a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011; b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. Annexure referred to in paragraph 3 of our report of even date Re: Sun TV Network Limited (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) All fixed assets have not been physically verified by the management during the year, but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. (c) There was no disposal of substantial part of fixed assets during the year. (ii) (a) The Management has conducted physical verification of inventory at reasonable intervals during the year.

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(b) The procedures of physical verification of inventory followed by management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (iii)(a) The Company has granted unsecured loans to two Companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 30.9 million and the year-end balance of loans granted to such Companies was Rs. 28.8 million. (b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company. (c) The loans granted are re-payable on demand. We are informed that the Company has not demanded repayment of any such loan during the year, and thus, there has been no default on the part of the parties to whom the money has been lent. The payment of interest has been regular. (d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. (e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of Order are not applicable to the Company and hence not commented upon. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of services. The activities of the Company did not involve sale of goods. During the course of our audit, we have not

25

observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas. (v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered. (b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. (vi) The Company has not accepted any deposits from the public. (vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956fortheproductsoftheCompany. (ix)(a)The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance income-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. The provisions relating to sales tax are not applicable to the Company. Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund,

26

investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to sales tax are not applicable to the Company. c) According to the records of the Company, the dues outstanding of income-tax and customs duty, on account of any dispute, are as follows:

Nature Of The Statute

Nature Of Dues

Amount(Rs In Millions

Income Tax Act,1961 Income Tax Act,1961 Income Tax Act,1961 Income Tax Act,1961 Income Tax Act,1961 Customs Act,1962

Income Tax

5.8*

Period To Which The Amount Relates FY2002-03

Forum Where Dispute Is Pending

Income Tax

4.9*

FY2004-05

Income Tax

190.0

FY2005-06

Income Tax

387.0

FY2006-07

Income Tax

142.4

FY2007-08

Differential Customs Duty

5.0

FY2007-08

Commissioner Of Income Tax(Appeals) Commissioner Of Income Tax(Appeals) Commissioner Of Income Tax(Appeals) Commissioner Of Income Tax(Appeals) Commissioner Of Income Tax(Appeals) Customs,Excise and Service Tax Appellate Tribunal

According to information and explanations given to us, there are no dues of wealth-tax, service tax, excise duty, sales tax and cess which are outstanding on account of any dispute.

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* Out of the above, an amount of Rs. 10.7 million has been deposited with the concerned authorities under protest. (x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. (xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company did not have any outstanding debentures during the year. (xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. (xvi) The Company did not have any term loans outstanding during the year. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. (xix) The Company did not have any outstanding debentures during the year. (xx) We have verified that the end use of money raised by public issues is as disclosed in the notes to the financial statements. (xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

S.R. BATLIBOI &ASSOCIATES Firm registration number: 101049W Chartered Accountants

per S Balasubrahmanyam Partner Membership No.:053315

Chennai May 26,2011

CONCLUSION
These are the financial information of the Sun Tv network Limited company.It is a merger of Gemini Limited and someother company mentioned above.

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