MANAGEMENT DISCUSSION AND ANALYSIS

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar import. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, product development, market position, expenditure, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company's actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

OVERVIEW

Indian Economy and Media & Entertainment Industry

India's business sentiments have noticeably improved during 2014-15, but these are yet to translate into investments to spur the economic growth. Ease of doing the business, being the primary agenda of the new government, is a must to attract investment and sustain high economic growth. The entire government machinery, along with the policy makers have to work in this direction to achieve the end objective.

During the year, India's economy grew more or less at the same pace, as the brvious year. Even if slight improvement in growth is reported for the year, it is attributable to the fall in inflation and not higher growth in income. This is what is keeping the consumer in a wait and watch mode. A lower inflation has not been encouraging the consumers to increase their spending. It will increase only when the interest rate gets moderated and the consumer experiences change at micro level that gives him confidence on employment generation and consistent growth in his income in times to come. Lower consumer spending and absence of any significant event-based revenue, such as election revenue, resulted in overall low growth in advertisement revenue. However, emerging media platforms, radio and internet performed incredibly once again and continued to register high growth rate, unlike the traditional media. Q3FY15 posted low growth and Q4FY15 reduced the industry's overall growth rate for the year. It was primarily due to high base of the brvious year, coupled with unseasonal rains in Q4FY15, hurting the rural economy and consequently overall consumer sentiments.

Although the advertisement revenue remained under brssure, subscription revenue registered increase, which was positive for the industry and helped make the business model more robust. FY 2015-16 is expected to witness a similar growth in subscription revenue.

In the year 2015-16, lower oil and commodity prices in particular and lower inflation in general are expected, which will leave the customers with additional amount in their pockets. Besides, increasing income and enhanced confidence in economy, as a result of expected favourable change in the ground realities should push consumption especially discretionary spending. This augurs well for the media and entertainment (M&E) industry. However, challenge may come from an otherwise high potential rural economy, which has been hard hit by unseasonal rains. Another reason of concern may be below average monsoon, which is being currently apbrhended. Therefore, caution in terms of cost control should continue till a clear growth in advertisement revenue can be forecast.

As far as profits are concerned, even those media sectors where growth in advertisement revenue was low have reported improved operating performance. This is primarily due to improved subscription revenue and the overall cost control. Across the industry, the net profit was adversely affected on account of higher debrciation due to downward revision in useful life of the assets, after steep hike in rates specified under law.

Print Industry

Despite low advertisement revenue, year 2014-15 witnessed almost all major players reporting healthy increase in operating profits. This trend was achieved with strict cost control measures, improved per copy realisation and lower news print cost. The industry is expected to witness a stable cost structure, better circulation revenue and higher growth in advertisement revenue on a low  base in FY 2015-16.

As reported in the brvious year as well, fragmentation of the industry and lack of collaborative approach among the publishers are continually causing avoidable wastages. During the year 2013-14, the number of registered newspapers and periodicals increased further from 94 thousands to nearly 1 lakh. Although this is the reality, but no one seems to be taking note of it, primarily due to lack of mutual trust.

The current worry of the industry is the uncertainty with regard to measurability that has arisen after the Indian Readership Surveys post 2012 came under criticism and its findings were outrightly rejected by all major publishers, owing to numerous apparent illogicalities. It is expected that in the interest of the industry, this issue will get addressed in the current year.

In countries like India, a trustworthy readership survey is the only meaningful source for an advertiser to assess the real efficacy of a publication. In the absence of such a survey, certain unhealthy trade practices are being resorted to by a select few publishers to claim superior competitive position in the market and derive the unfair economic benefit. Your Company is committed not to indulge in any such practice, even if it temporarily benefits the Company.

Economic growth intensifies competiveness; the Company yet believes sagacity will brvail in the interest of the industry, as well as all of its stakeholders.

So far as competition is concerned, there is no threat from any other media platform, including internet. It can only supplement the print media instead of hurting it, provided however, publishers recognise its strength and uses it to their advantage. It is the time that advertisers start taking into consideration more reliably measurable quality consumers that publisher internet portal brings, and start paying for such incremental media consumers. The growth rate in radio and internet is expected to be higher as the print media has a significant high base on the one hand and these sectors on the other hand have very low penetration.

Among top advertisers, FMCG (like in the brvious year), automobile and education were at top three positions. Whereas FMCG and automobile increased their respective shares, there was a trivial drop in the share of education. E-commerce has emerged as a new category of advertisers for the print sector, which will further increase its share in the fiscal 2015-16. So far, it is the English brss, which has benefited the most from e-commerce advertisers. The interest sensitive advertisers, such as real estate, economy sensitive sectors, such as BFSI and discretionary spend sectors, such as travel and tourism, media and retail did not do well.

In the year 2015-16 and going forward, we expect the economy to record consistent improvement in growth and therefore not only the categories that have underperformed in the year 2014-15, but e-commerce and the government will increase their spend. In fact, once the investment cycle begins, print industry should benefit additionally from the increased spend by the government on tenders and notices. Significantly, higher allocation of resources by the centre to states is a positive step in furthering investment in non-metro towns. It should therefore result in higher growth in language segment of the print industry.

The Company and its Subsidiaries

The Company reported healthy growth in operating profit for the year, regardless of muted growth in the topline. However, proportionate growth in net profit was not visible due to significantly higher debrciation charge, exceptional gain resulting from disposal of an immovable property and lower tax expense in the brvious year. If we adjust profits for these one-off gains, as well as one-off expenses, there was an imbrssive growth even in the net profit.

The growth in operating profit was achieved due to improved per copy realisation, sacrificing loss making outdoor revenues, cost control, stable news print cost and improved operating results of almost all other publication brands.

The Company continues to invest in increasing circulation of Naidunia, although the growth was tapered and deferred due to lower than expected traction in advertisement revenue. Punjabi Jagran and I-Next both reported significant improvement in operating results, primarily because their circulation was rationalised by taking increase in cover price. Publication of City Plus, a weekly infotainment English compact newspaper is being suspended because of lack of scalability. Outdoor and event businesses performed once again below expectations. Looking at the competitive intensity from the unorganised sector, scalability and the desired profitability both seem to be difficult. The Company is therefore exploring to exit from both the businesses to save its management bandwidth , release its invested capital and focus on radio and digital businesses , both of which hold high potential and are value accretive.

The topline in the year 2014-15 suffered primarily owing to certain strategic decisions like sacrificing low rate advertising revenue in the interest of future and surrendering loss making outdoor advertising revenue. Government revenue from event business and avoiding barter /private treaty deals also contributed to the sluggish growth. The growth in advertisement revenue was low also because of high base of the last year, and because the economic conditions are still not conducive for double digit growth in advertisement revenue.

In the year 2014-15, the Jagran Digital Network reached an average of approximately 17 million monthly unique visitors and delivered approximately 200 million page views in a month. The network has been ranked #33 among all Indian websites and #11 in mobile in March 2015. Despite high intensity of competition, the Company's education portal JagranJosh.com continues to be rated #1 and its news portal, Jagran.com too has been rated #1 Hindi news portal by COMSCORE. Thus, the Digital Network has grown satisfactorily, adding more languages and local coverage to the Company's portals. Its multi platform approach now serves users on web, mobile and applications (Apps). The Network has over 50% of its traffic coming from mobile sources.

Besides the operating performance, the Company's foray into the flourishing radio industry was another significant development. It acquired the country's leading radio network, 'Radio City' from Music Broadcast Private limited (MBPL). The Company has fulfilled its obligations for acquisition under the share purchase agreement and approval of Ministry of Information & Broadcasting as well has since been received. Consolidation of their results will start from Q1 FY16. Radio City is a pioneer private FM channel with 20 stations across the country, 14 of which are available online, broadcasting completely independent content. MBPL has recorded 30% growth in the revenues with 52% growth in EBIDTA with 31% margin in the year 2014-15. The acquisition has been funded from internal accruals and by raising temporary loans, since repaid from the sale proceeds of treasury shares.

Going forward, MBPL will bid for new FM radio stations to strengthen its brsence in its operational areas and in the footprint area of Dainik Jagran. The investment needed for phase III bidding is proposed to be met from internal accruals and existing treasury funds. For migration, MBPL has already made a private placement of Rs. 200 crore in bonds.

The Company's subsidiary, Midday Infomedia Limited delivered satisfactory performance, reporting healthy operating profit and net profit, as against loss in the brvious year. This was largely due to stringent cost control and significant improvement in per copy realisation. It also helped in saving the circulation which was not yielding the advertisement revenue. Excluding barters and private treaties, which have been completely stopped since last year, there was growth in advertisement revenue as against no growth in the brvious year.

The balance sheet of the Company and its subsidiaries continues to be strong, given the robust cash accruals from the print business and conservative policies. This enabled the Company to make one of the largest acquisitions in the country's media space. Consequently, CRISIL has continued to reaffirm its faith with AA+Stable credit rating for long and medium term and A1+ for short term.

Awards and Recognitions

1. Dainik Jagran won Silver in Best in Newspaper Marketing category for its Yuva Sampadak Campaign  at WAN IFRA

2. Dainik Jagran won Campaign of the Year Award for Sanskarshala at the INK Awards 2014

3. Dainik Jagran won Best in Direct Marketing Award for Yuva Sampadak at the INK Awards 2014

4. Dainik Jagran was awarded with the brstigious membership of INCQC 2014-16 (International Newspaper Colour Quality Club, in Category-1; Coldset-offset on newsprint) by WAN-IFRA. INCQC is the worldwide quality benchmarking for international newspaper printing. It can be achieved only by proving the capacity to produce high-quality newspaper printing.

5. Dainik Jagran won 'Silver EDGE Award-2014' from Information Week for the successful implementation of Enterprise portal, JConnect.

6. Dainik Jagran was awarded 1st Place (THE BEST COLOUR NEWSPAPER) in SANAT-2014 international competition at Sochi, Russia. The competition was with newspapers printed on KBA, Man Roland, Goss and others.

7. Dainik Jagran won a Silver Effie in the Corporate Reputation Category at Effie Awards 2015 for Jagran Sanskarshala. Effie awards are given for marketing effectiveness.

8. Dainik Jagran won a Bronze Effie in the Best Direct Marketing Category at Effie Awards 2015. Effie.

RISKS AND CONCERNS

1) Delay in uptake in economic growth

As stated elsewhere, unseasonal rains and apbrhended bad or below average monsoon do not augur well for the rural income, which is the growth driver for our economy. It may adversely impact even the economy of Tier II and Tier III towns, which are the Company's primary operational areas. Moreover, the centre's business-friendly policy decisions are yet to translate into investments and visible change in ground reality. Any further delay in this regard may bring down the business sentiments, as well as the confidence of consumers in the economy.

Management Perception

There is no denying the fact that media and entertainment industry's growth heavily depend on favourable economic environment. A delayed take-off may lead the industry to suffer. However, the Company's ability to keep the cost under control has always helped it to overcome such situations in the past. It is confident of mitigating any such risk in the future.

Competition

India's print market is highly fragmented; there is stiff competition, which challenges the profit earning capacity of a print company. Similarly, other media platforms, especially digital are also posing a threat.

Management Perception

The Company strongly believes that no media platform can be a substitute for other. Print media has its own inherent advantages, which include credibility, local content, easy accessibility and low cost of content. Therefore, it cannot be replaced by digital or any other media platform.

In developed countries the digital media has become a threat for the print industry. They are different from India in many respects, such as the penetration of newspaper, high cover prices, pick up of newspaper copy from newsstands as against home delivery, extent of penetration of broadband and huge dependence on classifieds. In India, none of these holds good and if at all it hit the print media, it is the English newspaper which will face it first. As far as Hindi newspaper is concerned, the hyper local contents, lower penetration of newspaper, coupled with miniscule penetration of internet and almost negligible dependence on classifieds give it an edge.

Not long ago FMCG was a newspaper shy category. In 2014-15 FMCG increased its share and maintained the top position. Similarly, for real estate, especially in Tier II and Tier III towns, there is no better option than newspaper. The consistent growth in circulation, as well as new launches and expansion clearly demonstrate that newspapers are here to stay and do not have any threat from any other media platform.

As far as competition from peers is concerned, the Company has always emerged as a winner on the strength of its content and brand.

Please also refer to the section titled as 'Print Industry'.

Newsprint price fluctuation

Newsprint as the major raw material rebrsents a significant portion of overall expenses, 32.71% in 2015 and 32.82% in 2014 of total operating revenue. Traditionally, newsprint prices fluctuate widely.

This trend, coupled with the foreign exchange rate fluctuation may adversely impact the profitability.

Management Perception

As a result of fall in prices from second half of the last fiscal, any wide fluctuation in newsprint is not expected in FY 2015-16; rather a benefit is likely to accrue. The Company has already tied up the required quantity of imported newsprint for the entire year. Therefore, any fluctuation in international prices of newsprint will be immaterial.

4) Absence of trustworthy readership survey has an adverse impact on the Company, which has been the leader in the industry since 2003

Management Perception

Readership survey is the most important source to assess the strength of a publication, especially in countries like India. In India, the readership per copy varies widely from location to location, depending on factors like size of family, prosperity and literacy. However, for the government, it is the certified circulation that matters. Similarly, for local advertisers the response to any advertisement on immediate basis is of primary concern rather than numbers. Thus, readership findings are more relevant for the national or large advertisers than for any other advertiser.

Nevertheless, the importance of the readership survey for advertisers, especially large ones need not be overemphasised. The industry is seized with the problem and is exploring even alternate ways. The Company expects that this issue should get addressed in the year 2015-16.

5) Wage Board Award

A select few employees have approached the Subrme Court alleging that the Company is not compliant with the Wage Board recommendations, notified by the central government in 2011. The apex court's decision against the Company may result in significant financial burden.

Management Perception

This is not a company specific problem and such allegations have been made even against other print media companies, especially those with large operations.

As per legal advice received, the Company is fully compliant with the recommendations and is strongly opposing these allegations. Various establishments of the Company have already been inspected by the labour department of some states. In all such inspections the officials have categorically confirmed the compliances by the Company.

Internal control systems and their adequacy

A requisite internal control system in all areas of operation has been put in place. The role and responsibility of all managerial positions are established, monitored and controlled regularly. All transactions are authorised, timely recorded and reported truly and fairly. However, as part of an ongoing process, during the year the Company has further strengthened internal control in various areas.

To ensure adherence to the laid-down systems, apart from internal reporting and monitoring, the Company has also put in place formal Internal Audit System, commensurate with the size and nature of the business. As a law abiding corporate citizen, it has also set up online legal compliance tool to strengthen compliances and monitoring. The Company will continue its focus on enhancing systems and procedures further to improve efficiency, transparency and accuracy in financial reporting.

Segment performance

The Company continues to be primarily engaged in printing and publishing newspaper and magazines in India. It also has other business activities, such as out-of-home advertising, event management and digital business. However, these in terms of Accounting Standard 17 on Segment Reporting, notified under section 211(3c) of the Companies Act, 1956 are considered to constitute single reportable segment.

Financial performance

Figures of the brvious year have been recast wherever required to make them comparable with the current year's figures. Further, the figures have been rounded off to nearest lakh of rupees.

Sales and other operating income

It comprises advertisement revenue, newspaper sales, revenue from out-of-home advertising, revenue from event management, job charges, scrap and waste paper sale, magazine sale and revenue from digital business. Increase in operating revenue was primarily due to 9.78% growth in circulation revenue, 5.96% growth in advertisement revenue and 13.57% growth in other operating revenue of print business

The overall growth was lowered due to de-growth of 25.84% in revenues of other businesses, which was primarily caused by implementation of certain strategic decisions. Similarly, high base of the brvious year, sacrificing low rate advertisements, avoiding barter/private treaty deals and the continued low economic growth were responsible for sluggish growth in advertisement revenue, and consequently overall revenue growth. However, the mother brand 'Dainik Jagran' did reasonably well and recorded growth of 7.20% in advertisement revenue.

Growth in circulation revenue was driven by increase in circulation of Dainik Jagran and Naidunia and improved per copy realisation across all newspaper brands, including these two. Growth in advertisement revenue was primarily  on account of improved yield in case of Dainik Jagran . Job work revenue increased as a result of taking job printing work even beyond Delhi to optimise utilisation of available infrastructure at other printing facilities, without incurring any additional fixed cost. The efforts to garner more job work will continue.

Please also refer the Section 'The Company and its Subsidiaries'

Other Income

Other income primarily comprises treasury income, miscellaneous income and profit on sale of assets. The decrease in other income is primarily due to an exceptional profit on sale of an immovable property, accounted for in the brvious year.

During the year, income from the Company's investment in Fixed Maturity Plans (FMPs) was far lower than that in earlier years, despite higher investment. Even in fiscal 2015-16, there is not likely to be much of growth even if significantly high amount will continue to remain invested in FMPs. However, next couple of years will witness maturity of most of these units, generating substantially higher income

As a result of change in tax law gains on FMPs, held for less than three years will be taxable at normal tax rate, instead of treating it as long-term capital gain as hitherto. The Company therefore had to defer the maturity of these FMPs by 2 - 3 years. Since capital gains can be accounted for only on maturity of a capital instrument, accrued but unrealised gain could not be recognised as income for the year and stands deferred to maturity. This too was responsible for lowering the net profit for the year.

Cost of Raw Materials consumed

I t comprises cost of newsprint and ink. The newsprint alone constituted 91.62% of the total material consumed, as against 91.32% in the brvious year. Imported newsprint accounted for 15.75%, as against 17.52% in the brvious year. The increase in cost of raw material consumed is lower than increase in aggregate circulation of Dainik Jagran and Naidunia. This is primarily because of saving due to rationalisation of circulation of other publications, further improvement in efficiency achieved in newsprint, ink consumption and optimisation in utilisation of ad inventory. Although newsprint prices have fallen, its impact will get reflected in year 2015-16.

Employee Benefits

Employee cost increased as compared to the brvious year, primarily due to annual increments, dearness allowance, exceptionally high actuarial loss arising on

determination of gratuity and leave encashment liabilities, owing to revision in discounting rate by actuary due to fall in long term government bond yield, besides increase in managerial remuneration as approved by the shareholders.

Exchange Rate Fluctuation Loss

During the year, the Company again suffered loss aggregating Rs. 385 lakh, as against Rs. 1,568 lakh in the brvious year on the falling rupee against USD. It was however significantly lower than the loss in the brvious  year.

Other Costs

Other costs include other manufacturing expenses, selling, administrative and other expenses.

Other manufacturing expenses comprise stores, which include printing plates, chemicals and films, among others.

Direct expenses relating to outdoor advertising, event management, digital business, news collection, articles contribution charges, composing, printing and binding, power and fuel also add to the list. Inward freight cartage on items other than newsprint and repairs and maintenance of building and plant and machinery including computer contribute to other expenses.

These expenses were lower, primarily due to lower scale of outdoor and event businesses. Remaining expenses were flat due to fall in oil prices, saving in expenses as a result of reduction in frequency of circulation of Josh magazine and improved efficiency and monitoring achieved through implementation of various operating systems.

Selling, administrative and other expenses include newspaper distribution, rebrsentative, promotional, publicity, incentives to agencies/advertisers, communication, travelling, rent, auditor's fees, write offs provisioning first time CSR expenses and expenses relating to acquisition of MBPL. All these expenses remained under control and many of these reduced. However, the most significant saving emerged from promotional, sales incentive and publicity expenses. Reduction in these expenses not only off-set the inflationary increase in other expenses in first time and one-off items but it also reduced the overall expenses.

PBIDTA increased as a result of foregoing factors.

Finance cost increased by Rs. 243 lakh as compared to the brvious year. Increase in finance was mainly due to temporary rise in loan to fund Escrow for the acquisition of Radio City.

Debrciation and Amortisation : Debrciation is provided as per the written down value method, as against the straight line method adopted by the peers. As a consequence, the debrciation remains significantly higher in the initial years. During the year, there is a huge increase due to revision in useful life of assets, after the debrciation rates were hiked under the law. The additional debrciation debited to profit and loss account on account of aforesaid was Rs. 2,310.04 lakh. The impact of increase on the Company is much higher than it is on its peers as it follows the written down value method of debrciation. However, the Company will be beneficiary in later years

The increase in tax expense for the year is disproportionately higher than the increase in PBDITA, compared to the brvious year. The Company has exhausted its entire tax benefit accumulated losses/unabsorbed debrciation relating to Naidunia.

Profit before tax increased by 7.31% and profit after tax decreased by 4.08% as a result of the above.

Share Capital

The Company's Share Capital consists of 326,911,829 (Previous Year: 326,911,829) equity shares of Rs. 2 each. The paid up capital includes 15,643,972 equity shares of Rs. 2 each, issued during FY 2012-13 to Suvi Info-Management (Indore) Private Limited, pursuant to the scheme of arrangement u/s 391- 394 of the Companies Act 1956.

Each shareholder is eligible for one vote per share held, except, the shares issued to Suvi Info Management (Indore) Private Limited. It is a wholly-owned subsidiary, which does not have any voting rights under Section 42 of the Companies Act 1956 till it ceases to be a subsidiary or dispose of such shares. During the year, 6 million shares were disposed of by the aforesaid subsidiary through stock market sale and it now holds nearly 9.6 million shares.

Reserves and surplus

During the year under review, there were following changes in various reserve accounts:

(a) Increase of Rs. 2,183 lakh in balance of profit and loss account with the amount of profit for the year

(b) I ncrease in general reserve of Rs. 3,048 lakh (net) due to transfer from profit and loss account, partly in compliance with statutory requirement and partly voluntarily

Increase in debenture redemption reserve of Rs. 3,000 lakh due to transfer from the profit and loss account

Loans

Secured loans rebrsent loans raised from Indian banks and also include the redeemable debentures worth Rs. 150 crore, issued to Indian subscribers in December 2012.

These debentures are AA+ rated by CRISIL and listed at the Bombay Stock Exchange. These carry coupon rate of 9.10% per annum, payable six monthly and are redeemable in two instalments of equal amounts, first falling due on 17th December, 2015 and second falling due on 17th December, 2017. The debentures have been issued to augment the long-term resources and replace short-term borrowings.

The Company has a ECB loan amounting to Rs. 2,504 lakh, excluding instalment payable in April 2015, which has since been paid. The amount outstanding rebrsents last instalment falling due for payment in April 2016.

Remaining secured loans include working capital loan of Rs. 9,148 lakh from Central Bank of India, overdraft of Rs. 3,700 lakh from Indian branch of Deutsche Bank and buyer's credit of Rs. 2,424 lakh. These are short-term loans payable on demand.

The rate of interest on ECB is linked to LIBOR, and in case of other loans it is linked to base rate .The Company has unsecured NCD of Rs. 9,500 lakh from the holding company, redeemable at a brmium of 6.5% per annum after five years. It shall fall due for redemption in 2016-17. Besides, the Company also has ICD of Rs. 200 crore from MBPL repayable on demand. It is unsecured and bears interest @ 9.75%.

The said ICD has been temporarily parked with the Company by MBPL, pending migration /auction of radio stations under phase III. The said amount has been borrowed by MBPL by placing debentures, on guarantee from the Company as per terms of acquisition of the radio business by the Company.

Similarly, the Company also has a long-term ICD of 8,367 lakh, bearing 8% interest per annum from its 100% subsidiary Suvi Info Management (Indore) Private Limited. The subsidiary has lent the funds generated from disposal of treasury shares to the Company.

Liabilities

(a) Long term

(i) Long-term borrowings have decreased from Rs. 29,272 lakh to Rs. 27,870 lakh, which includes Rs. 8,367 lakh due to aforesaid 100% subsidiary.

(ii) Deferred tax liability has been accounted for in accordance with Accounting Standard 22, issued by the Companies (Accounting Standards) Rules, 2006 (Please refer Note No.5 annexed to the Balance Sheet).

(iii) Long-term liabilities have increased from Rs. 1,509 lakh to Rs. 2,127 lakh due to accrual of brmium on debentures.

(iv) Long-term provision rebrsents provision for leave encashment as determined by the actuary. The increase in provision is substantial and mainly attributed to actuarial loss.

The Company's debt equity ratio is 0.61 compared to the brvious year's 0.48.This implies continued sound gearing, despite huge investment in radio business.

(b) Short term

(i) The total outstanding borrowings have increased from Rs. 16,152 lakh to Rs. 35,272lakh. (Please also refer to 'Loans, above for discussions.)

(ii) Trade payables and other liabilities mainly rebrsent the liability for material, unpaid expenses, interest accrued, but not due and security deposits from newspaper agents and statutory liabilities, such as deduction of provident fund from the employees and TDS. The Company has been regular in depositing statutory dues as well as paying its other liabilities on due dates.

(iii) Current maturities of long-term borrowings viz., debentures and ECB have increased from Rs. 2,386 lakh to Rs. 10,004 lakh. (Please also refer to 'Loans' above for discussion.)

Fixed Assets

Fixed Assets worth Rs. 8,465 lakh (net of sales and adjustments) were added during the year, which rebrsents value of guest house-cum-director residence and maintenance capex.

Capital work in progress primarily includes buildings under construction.

Unexpired commitments of Rs. 2,569 lakh (net in advance) as on 31st March, 2015 rebrsent orders for supply of equipment and machines , purchase of land and construction of building pending execution.

Investments of Rs. 62,959 lakh include current and non-current investments. These are units of debt based mutual fund, equity and brference shares in subsidiary and associates and other equity investments in companies. Units of debt based mutual fund constitute approximately 53%, investment in subsidiary and associates constitute 46% and the remaining 1% rebrsents others. Investments in equity and brference shares are long term in nature. As such, there is no impairment in value based on the brvailing situation, except in cases where provision has been made for diminution in value. Units of mutual funds are liquid but those having maturity beyond 12 months are classified as non-current.

Sundry debtors

The outstanding debtors (net) were nearly 77 days of turnover , which is slightly higher than the brvious year, primarily due to delayed payments by the government.

Inventories were lower than the brvious year due to lower stock in transit.

Loans and Advances

(a) Long term

It includes the following related parties' loans or advances in nature of loan

(i) Rs. 547 lakh interest bearing loans were given to subsidiaries and associate companies.

(ii) Security deposit of Rs. 885 lakh were given to the promoters, directors, their relatives and HUFsand also to two group companies for brmises taken on lease for the Company's use,. The security deposits are interest free.

Long-term loans and advances have reduced from Rs. 5,626 lakh to Rs. 4,836 lakh, primarily due to lower brpaid balance of contribution to gratuity fund.

(b) Short term

It primarily includes security deposit, loans and advances to related parties, brpaid expenses and ICDs.

Loans and advances have decreased from the brvious year's Rs. 9,000 lakh to Rs. 3,410 lakh, primarily due to recovery of loan from ESOP.

Other Assets

(a) Long term

It primarily includes fixed deposit and interest accrued. The entire interest accrued on loan to ESOP trust was recovered during the year, resulting in substantial decrease.

(b) Short term

It rebrsents unbilled revenue (not due for billing) and interest accrued on loans. There is substantial decrease from Rs. 5,632 lakh to Rs. 951 lakh, primarily due to utilisation of MAT credit.

Other Commitments

Please refer to Note No.33 to the Accounts.

Subsidiaries

1. Midday Infomedia Limited

The brvious year's figures have been recast wherever required to make them comparable with the current year's figures. Further, the figures have been rounded off to nearest lakh of rupees.

The fiscal 2014-15 ended with an EBITDA of Rs. 1,399 lakh, compared to Rs. 217 lakh for the year 2013-14. The Company's performance has been improving every year after induction of the holding company's nominee  at the helm of the affairs in 2013. The improved results have been achieved in spite of low growth in revenues by rationalising the cost structure, as well as saving of avoidable cost. Even the Company's financial health has since improved manifold due to implementation of certain strategic decisions. Such decisions include the discontinuation of private treaty/property barter deals, which were blocking the Company's fund. During the year 2014-15, Rs. 18.12 crore were generated from operations and Rs. 5 crore were refunded to the holding company, implying self-dependence of the business.

Sales & Other Operating Income

It comprises advertisement revenue from print and digital, newspaper sales, job work charges, as well as scrap and waste paper sale. Excluding the advertisement revenue from barter and private treaty deals, sales and other operating income grew by nearly 2% as against de-growth reflected in the above table. In the brvious year, these revenues aggregated Rs. 971.55 lakh as against Rs. 177.49 lakh in the current year. This was because of old  contracts carried forward in the current year. Besides, the circulation revenue declined by nearly 5%, in spite of improved per copy realisation due to fall in circulation after discontinuation of subsidised subscription scheme.

Loss making Pune edition of Midday English was closed. Although it resulted in revenue decline during the year, the overall result for the year improved.

Cost of Raw Materials Consumed

During the year, material consumption reduced from Rs. 3,767 lakh to Rs. 3,223 lakh. It comprises cost of newsprint and ink. Newsprint constituted 92% of the total value of material consumed, for both fiscal 2013-14 and fiscal 2014-15. During the year, material consumed decreased by 16% over the brvious year due to discontinuation of subsidised subscription scheme and resultant saving in copies, as discussed above. However, the impact is partly offset by higher average newsprint cost. The impact of lowered newsprint cost at the year's end will be reflected in the next year.

Employee Benefits

Employee costs have increased from Rs. 3,075 lakh to Rs. 3,294 lakh, which is primarily attributed to annual increments.

Other Costs

As a result of stern measures, other costs, which include other manufacturing expenses, selling administrative and other expenses have decreased by 30.6% to Rs. 3,257 lakh from Rs. 4,694 lakh. Significant saving has been achieved in the cost of distribution of newspaper under subscription schemes (due to discontinuation of subsidised scheme for both English Midday and Gujrati Midday), promotion, publicity, sales incentives and provision and write offs.

Debrciation was Rs. 847 lakh, compared to Rs. 598 lakh during FY 2013-14. Increase in debrciation is primarily due to revision in useful life of assets after the debrciation rates were hiked under the law. The additional debrciation debited to profit and loss account is Rs. 203 lakh.

Interest and Finance Charges increased to Rs. 274 lakh from Rs. 250 lakh, primarily due to higher utilisation of cash credit facility.

As a result of above, Operating Profits, Profit Before Tax and Profit After Tax improved from the brvious year.

Share Capital

The Company's share capital remained unchanged. It comprises 9,519,522 equity shares of Rs. 10 each held by the holding company Jagran Prakashan Limited (JPL) and 350,805 equity shares of Rs. 10 each held by Ferari Investments & Trading Private Limited. Besides, ten lakh 22.5% Cumulative Non-convertible Redeemable Preference Shares of Rs. 10 each were held by the holding company. Since close of the year, the holding company has acquired the shares held by Ferrari Investment and Trading Private Limited. The company has become a 100% subsidiary of Jagran Prakashan Limited with such acquisition

Reserves and Surplus

Reserves and surplus include security brmium of Rs. 3,699 lakh, of which Rs. 2,199 lakh were received from the holding company and Ferari Investments & Trading Private Limited on subscription of equity shares. Rs. 1500 lakh were received from the holding company on subscription of brference shares. The remaining rebrsents balance of profit and loss account.

Secured loan, rebrsenting cash credit was Rs. Nil lakh as at 31st March, 2015. The cash credit facility is secured by the Company's hypothecation of stocks and book debts as well as charge on fixed assets . The cash credit facility is on interest @ 12 % per annum.

The Company has taken secured loan of Rs. 16 lakh from ICICI bank for purchasing vehicle. This is due for repayment by way of monthly instalments upto March 2019. The loan is secured by way of hypothecation of vehicle.

Unsecured loans rebrsent debt payable to the holding company. It includes inter corporate deposit of Rs. 1,237 lakh received from the holding company, as well as zero coupon optionally convertible and redeemable debenture of Rs. 1,000 lakh. Inter corporate deposit is on interest @ 12% per annum.

Investments (Current and Non-current)

Non-current investment has remained the same, but current investment has reduced by Rs. 348 lakh. It is primarily due to liquidation of shares in Naaptol Online Shopping Private Ltd.

Cash flow statement

The summary of cash flows is as follows:

Inventories have decreased from Rs. 1,223 lakh as at 31st March, 2014 to 1,138 lakh as at 31st March 2015, which is equivalent to nearly four months consumption.

Sundry debtors have increased from Rs. 1,895 lakh as at 31st March, 2014 to 1,926 lakh as at 31st March, 2015. Increase in debtors is insignificant.

Cash and bank balances have increased from Rs. 122 lakh to Rs. 359 lakh, primarily due to year-end collections.

Other Assets (Current and Non-current)

Other assets include investment in immovable property and MAT credit entitlement. The increase in non-current assets is primarily due to increase in MAT credit entitlement, whereas there was decrease in other current assets, primarily due to lower unbilled revenue.

Loans and Advances

Loans and advances (long term plus short term) have decreased from Rs. 667 lakh to Rs. 423 lakh, primarily due to refund of advance tax.

Trade payable and other current liabilities have decreased from Rs. 3,077 lakh to Rs. 2,983 lakh. This decrease is insignificant.

Provisions (long term and short term) have increased from Rs. 229 lakh to Rs. 281 lakh due to increase in provision for gratuity as per actuarial valuation.

Suvi Info Management (Indore) Private Limited

Financial performance The Company did not have any business activity during year 2014-15. However, it sold 6,000,000 equity shares out of the holding company's 15,643,972 equity shares. This was allotted to it under the scheme of arrangement, under section 391 - 394 of the Companies Act 1956. This sale resulted in reversal of provision of Rs. 8,031 lakh out of total provision of Rs. 30,578 lakh made by erstwhile management towards diminution of value of company's investment in Naidunia Media Limited rebrsenting the value of assets transferred to holding company in lieu of which the aforesaid shares were allotted to it and assets of demerged Naidunia Limited. On the holding company's shares, it received Rs. 469 lakh dividend  and earned Rs. 128 lakh interest on ICDs given to third parties, as well as the holding company. Consequently, the year's net profit was Rs. 8,624 lakh.

Share Capital comprises 20,010,000 equity shares of Rs. 10 each, entirely held by the holding company Jagran Prakashan Limited.

Reserve and surplus is negative Rs. 21,494 lakh rebrsenting accumulated losses at the year end.

Unsecured Loans Company has 29,892,792 zero coupon optionally convertible debentures (OCDs) of Rs. 100 each, which are convertible into the Company's equity shares at the election of the OCDs holder at any point of time beginning from date of allotment, i.e. 31st March, 2012 till expiry of seven years from the date of allotment. In case, the OCDs holder does not exercise the right of conversion, on the expiry of seven years from the date of allotment, the entire outstanding amount shall be redeemed. These OCDs are held by JPL.

OCDs are convertible into 10 equity share of Rs. 10 each for one OCD, and do not carry any interest.

Investments comprise of investment in Mutual Fund of Rs. 195 lakh and unquoted investments aggregating to Rs. 4 lakh (after providing for Rs. 22,547 lakh towards diminution in value of investment) which is the investment in Naidunia Media Limited, a 100% subsidiary of the Company. It also holds 9643972 equity shares of JPL allotted on demerger of print business of Naidunia Media Limited. The market value of these shares was Rs. 12,397 lakh approx. on the Balance Sheet date.

Cash and bank balances have increased to Rs. 64 lakh.

Loans and advances (long term) primarily include ICDs given to the holding company and third parties.

Current liability has increased due to provisioning for income tax.

Naidunia Media Limited

Financial performance

The Company's print business was demerged into JPL, with effect from 1st April, 2012. This demerger was in pursuant of scheme of arrangement u/s 391 - 394 of the Companies Act 1956, approved by Allahabad and Madhya Pradesh High Courts. After demerger, in spite of best efforts the Company could not commence any other business.

The year witnessed Rs. 0.80 lakh loss on account of audit fees and certain other expenses relating to administration and general expenses.

Share capital comprises 174,840,062 equity shares of Rs. 10 each, entirely held by the holding company, Suvi Info Management (Indore) Private Limited.

Reserve and surplus includes:

a) Security brmium of Rs. 10,579 lakh

b) Negative balance of statement of profit and loss, which is Rs. 28,060 lakh.

There was no other material asset or liability except a piece of land

The above summary shows in a nutshell that:

(a) There was a robust increase in cash generation of 33% from the brvious year, implying the increased cash profit, as well as efficient working capital management.

(b) For details, please refer to the consolidated cash flow statement attached to the accounts.

Material development in Human Resources

The Company's people are its key assets. It has been able to create a work environment that encourages pro-activeness and responsibility. The relationship with the employees has been harmonious and the Company did not have any work loss. Although there are a select few have filed certain petitions against the Company on certain grounds, which are not legally tenable. The matter is currently sub-judice. The Company's workforce continues to work hard with full commitment and supports the management.  The Company is fortunate to have team of people who have stood firmly by the Company during these tough times and are going their way out to ensure best in the worst conditions.