Board of Directors - Jagran Prakashanjplcorp.in/JPLWeb/UserFiles/RPT_Year_Download_4.pdf · 2008-05-02 · Merchants’ Chamber of Uttar Pradesh, 14/76, Civil Lines, Kanpur- 208 001

Board of DirectorsMr. Mahendra Mohan GuptaChairman and Managing Director

Mr. Sanjay GuptaWhole Time Director and CEO

Mr. Dhirendra Mohan GuptaWhole Time Director

Mr. Sunil GuptaWhole Time Director

Mr. Shailesh GuptaWhole Time Director

Sir Anthony J. F. O’ Reilly

Mr. Gavin K. O’Reilly

Mr. Anuj Puri

Mr. Bharatji Agrawal

Mr. Kishore Biyani

Mr. Naresh Mohan

Mr. Rashid Mirza

Mr. Vijay Tandon

Mr. Vikram Bakshi

Audit Committee

Mr. Vijay TandonChairman


Mr. Kishore Biyani

Mr. Naresh Mohan

Shareholders/InvestorsGrievance CommitteeMr. Bharatji AgrawalChairman

Mr. Rashid Mirza

Mr. Sunil Gupta

Mr. Sanjay Gupta

Remuneration CommitteeMr. Naresh MohanChairman


Mr. Kishore Biyani

Mr. Vijay Tandon

Company Secretary & Compliance Officer

Mr. Amit Jaiswal

Registrar & Share Transfer Agent

Karvy Computershare Private LimitedKarvy House, 46, Avenue 4Street no.1, Banjara Hills,Hyderabad 500 034

AuditorsM/s J. N. Sharma & Co., Chartered Accountants58/4, Birhana Road, Post Box No. 389,Kanpur 208 001

Bankers to the CompanyCentral Bank of IndiaBank of BarodaICICI Bank LimitedAllahabad BankState Bank of IndiaUnion Bank of IndiaOriental Bank of Commerce

Registered OfficeJagran Building, 2Sarvodaya Nagar,Kanpur-208 005

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Jagran Prakashan Limited

CONTENTS

Sr/No. Particulars Page No.

1 Notice 03

2 Directors’ Report 13

3 Corporate Governance Report 17

4 Management Discussion and Analysis Report 32

5 Compliance Certificate on Corporate Governance 41

6 Auditors’ Report 42

7 Balance Sheet 45

8 Profit and Loss Account 46

9 Cash Flow Statement 47

10 Schedules to Accounts 49

11 Significant Accounting Policies 59

12 Balance Sheet Abstract and Company’s General 67Business Profile

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30th Annual Report 2005-2006

NOTICENOTICE is hereby given that the 30th Annual GeneralMeeting of the Members of JAGRAN PRAKASHAN LIMITEDwill be held on Friday, September 29, 2006 at 11:30 A.M. atMerchants’ Chamber of Uttar Pradesh, 14/76, Civil Lines,Kanpur- 208 001 to transact the following business:

Ordinary Business:

1. To consider and adopt the Audited Balance Sheet asat 31st March 2006 and the Profit & Loss Account forthe year ended on that date together with the Reportof Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Dhirendra MohanGupta, who retires by rotation and being eligible offershimself for re-appointment.

3. To appoint a Director in place of Mr. Sunil Gupta, whoretires by rotation and being eligible offers himselffor re-appointment.

4. To appoint a Director in place of Sir Anthony J.F.O’Reilly, who retires by rotation and being eligibleoffers himself for re-appointment.

5. To confirm the payment of Interim Dividend on EquityShares for the year 2005-06.

With Special Notice:

6. To appoint Auditors to hold office from the conclusionof this meeting until the conclusion of next AnnualGeneral Meeting of the Company and to fix theirremuneration:

“RESOLVED THAT pursuant to the provisions ofSection 224, 225 of the Companies Act, 1956 and onthe recommendations of the Audit Committee, PriceWaterhouse, Chartered Accountants, be and arehereby appointed as Statutory Auditors of theCompany in place of retiring Auditors, J.N. Sharma &Co., Kanpur who have shown their unwillingness forre-appointment, to hold office from the conclusion ofthis Annual General Meeting to the conclusion of thenext Annual General Meeting at a remuneration andactual out of pocket expenses to be decided by theBoard.”

Special Business:

7. To consider and if thought fit, to pass, with or withoutmodif icat ion(s), the fol lowing resolut ion as anOrdinary Resolution:

“RESOLVED THAT Mr. Anuj Puri who was appointedby the Board of Directors as an Additional Director ofthe Company with effect from November 18, 2005and who holds office upto the date of the ensuingAnnual General Meeting of the Company in terms ofSection 260 of the Companies Act, 1956 (“the Act”)and in respect of whom the Company has received anotice, in writing, from a member under Section 257of the Act proposing his candidature for the office ofDirector of the Company, be and is hereby appointedas a Director, liable to retire by rotation.”

8. To consider and, if thought fit, to pass, with or withoutmodif icat ion(s), the fol lowing resolut ion as anOrdinary Resolution:

“RESOLVED THAT Mr. Bharatji Agrawal who wasappointed by the Board of Directors as an AdditionalDirector of the Company with effect from November18, 2005 and who holds office upto the date of theensuing Annual General Meeting of the Company interms of Section 260 of the Companies Act, 1956(“the Act”) and in respect of whom the Company hasreceived a notice, in writing, from a member underSection 257 of the Act proposing his candidature forthe office of Director of the Company, be and is herebyappointed as a Director, liable to retire by rotation.”


“RESOLVED THAT Mr. Kishore Biyani who wasappointed by the Board of Directors as an AdditionalDirector of the Company with effect from November18, 2005 and who holds office upto the date of theensuing Annual General Meeting of the Company interms of Section 260 of the Companies Act, 1956(“the Act”) and in respect of whom the Company hasreceived a notice, in writing, from a member underSection 257 of the Act proposing his candidature forthe office of Director of the Company, be and is herebyappointed as a Director, liable to retire by rotation.”


“RESOLVED THAT Mr. Naresh Mohan who wasappointed by the Board of Directors as an AdditionalDirector of the Company with effect from November18, 2005 and who holds office upto the date of theensuing Annual General Meeting of the Company interms of Section 260 of the Companies Act, 1956(“the Act”) and in respect of whom the Company hasreceived a notice, in writing, from a member underSection 257 of the Act proposing his candidature forthe office of Director of the Company, be and is herebyappointed as a Director, liable to retire by rotation.”


“RESOLVED THAT Mr. Rashid Mirza who wasappointed by the Board of Directors as an AdditionalDirector of the Company with effect from November18, 2005 and who holds office upto the date of theensuing Annual General Meeting of the Company interms of Section 260 of the Companies Act, 1956(“the Act”) and in respect of whom the Company hasreceived a notice, in writing, from a member underSection 257 of the Act proposing his candidature forthe office of Director of the Company, be and is herebyappointed as a Director, liable to retire by rotation.”

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“RESOLVED THAT Mr. Vi jay Tandon who wasappointed by the Board of Directors as an AdditionalDirector of the Company with effect from November18, 2005 and who holds office upto the date of theensuing Annual General Meeting of the Company interms of Section 260 of the Companies Act, 1956(“the Act”) and in respect of whom the Company hasreceived a notice, in writing, from a member underSection 257 of the Act proposing his candidature forthe office of Director of the Company, be and is herebyappointed as a Director, liable to retire by rotation.”


“RESOLVED THAT Mr. Vikram Bakshi who wasappointed by the Board of Directors as an AdditionalDirector of the Company with effect from November18, 2005 and who holds office upto the date of theensuing Annual General Meeting of the Company interms of Section 260 of the Companies Act, 1956(“the Act”) and in respect of whom the Company hasreceived a notice, in writing, from a member underSection 257 of the Act proposing his candidature forthe office of Director of the Company, be and is herebyappointed as a Director, liable to retire by rotation.”

14. To consider, and if thought fit, to pass, with or withoutmodification(s), the following resolution as a SpecialResolution:

“RESOLVED THAT pursuant to the provisions ofSection 269, 198, 309 and 311 read with ScheduleXIII and other applicable provisions of the CompaniesAct, 1956 (including any statutory modification or re-enactment thereof), the consent of the members beand is hereby accorded to the re-appointment of Mr.Mahendra Mohan Gupta as Chairman and ManagingDirector of the Company for a period of five years witheffect from October 01, 2006 on the following termsand condit ions as recommended by theRemuneration Committee:-

I. Salary

Within the scale of Rs. 4,00,000 – 50,000– 6,00,000per month

II. Perquisites

1. The Chairman and Managing Director shall beent i t led to perquisi tes l ike furnishedaccommodation or house rent allowance in lieuthereof, together with reimbursement ofexpenses for utilisation of gas, electricity, water,re-imbursement of ordinary medical expensesand leave travel concession for self and hisfamily including dependents, c lub fees,premium towards personal accident insuranceand mediclaim and all other payments in thenature of perquisites and allowances as agreed

by the Board of Directors, from time to time,subject however, that the aggregate monetaryvalue of the perquisites in any year shall notexceed Rs. 9,00,000/-(Rupees Nine Lacs only).

Explanation

“Family” here means the spouse, dependent childrenand dependent parents of the Chairman andManaging Director.

For the purpose of calculating the above ceiling,perquisites shall be evaluated at actual cost. If theactual cost is not determinate, these shal l beevaluated as per Income Tax Rules, whereverapplicable.

Use of Company Car for off icial purposes andTelephone at residence (including payment for localcalls and long distance official calls), shall not beincluded in the computation of perquisites for thepurpose of calculating the said ceiling.

2. Gratui ty payable as per the Rules of theCompany and encashment of leave at the endof the tenure wi l l not be included in thecomputation of the ceiling on perquisites to theextent the same are not taxable under theIncome Tax Act.

III. Overall remuneration

The aggregate of the remuneration as specifiedabove or paid additionally in accordance with therules of the Company in any financial year, which theBoard in its absolute discretion pay to the Chairmanand Managing Director from time to time, shall notexceed the limits prescribed from time to time underSection 198, 309 and other applicable provisions ofthe Companies Act, 1956 read with Schedule XIII tothe said Act as may from time to time, be in force.

IV. Minimum Remuneration

Notwithstanding the foregoing, where in any financialyear during the currency of the tenure of the Chairmanand Managing Director, the Company has no profitsor its profits are inadequate, the remuneration andother terms will be subject to Schedule XIII of theCompanies Act, 1956.

RESOLVED FURTHER THAT Board of Directors ofthe Company be and is hereby authorized to do allsuch acts, deeds, matters and things as may benecessary or desirable to give effect to thisresolution.”


“RESOLVED THAT pursuant to the provisions ofSection 269, 198, 309 and 311 read with ScheduleXIII and other applicable provisions of the CompaniesAct, 1956 (including any statutory modification or re-enactment thereof), the consent of the members beand is hereby accorded to the re-appointment of

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Mr. Sanjay Gupta as Whole Time Director anddesignated as “Chief Executive Officer” of theCompany for a period of five years with effect fromOctober 01, 2006 on the fol lowing terms andconditions as recommended by the RemunerationCommittee:-

I. Salary

Within the scale of Rs. 4,00,000 – 50,000- 6,00,000per month

II. Perquisites

1. The Whole Time Director shall be entitled toperquisites like furnished accommodation orhouse rent allowance in lieu thereof, togetherwith reimbursement of expenses for utilisationof gas, electricity, water, re-imbursement ofordinary medical expenses and leave travelconcession for self and his family includingdependents, c lub fees, premium towardspersonal accident insurance and mediclaim andall other payments in the nature of perquisitesand allowances as agreed by the Board ofDirectors, from time to time, subject however,that the aggregate monetary value of theperquisi tes in any year shal l not exceedRs.9,00,000/-(Rupees Nine Lacs only).

Explanation

“Family” here means the spouse, dependentchildren and dependent parents of the Wholetime Director.

For the purpose of calculating the above ceiling,perquisites shall be evaluated at actual cost. Ifthe actual cost is not determinate, these shallbe evaluated as per Income Tax Rules, whereverapplicable.

Use of Company Car for official purposes andTelephone at residence (including payment forlocal calls and long distance official calls), shallnot be included in the computat ion ofperquisites for the purpose of calculating thesaid ceiling.

2. Contribution to Provident Fund, SuperannuationFund or Annuity Fund will not be included in thecomputation of the ceiling on perquisites to theextent these either singly or put together are nottaxable under the Income Tax Act.



The aggregate of the remuneration as specifiedabove or paid additionally in accordance with therules of the Company in any financial year, which the

Board in its absolute discretion pay to the WholeTime Director from time to time, shall not exceed thelimits prescribed from time to time under Section 198,309 and other appl icable provisions of theCompanies Act, 1956 read with Schedule XIII to thesaid Act as may from time to time, be in force.


Notwithstanding the foregoing, where in any financialyear during the currency of the tenure of the WholeTime Director, the Company has no profits or its profitsare inadequate, the remuneration and other termswill be subject to Schedule XIII of the Companies Act,1956.



“RESOLVED THAT pursuant to the provisions ofSection 269, 198, 309 and 311 read with ScheduleXIII and al l other appl icable provisions of theCompanies Act, 1956 ( including any statutorymodification or re-enactment thereof), the consent ofthe members be and is hereby accorded to the re-appointment of Mr. Dhirendra Mohan Gupta as WholeTime Director of the Company for a period of five yearswith effect from October 01, 2006 on the followingterms and condit ions as recommended by theRemuneration Committee:-

I. Salary

Within the scale of Rs. 4,00,000 – 50,000 – 6,00,000per month

II. Perquisites


Explanation


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The aggregate of the remuneration as specifiedabove or paid additionally in accordance with therules of the Company in any financial year, which theBoard in its absolute discretion pay to the WholeTime Director from time to time, shall not exceed thelimits prescribed from time to time under Section 198,309 and other appl icable provisions of theCompanies Act, 1956 read with Schedule XIII to thesaid Act as may from time to time, be in force.


Notwithstanding the foregoing, where in any financialyear during the currency of the tenure of the WholeTime Director, the Company has no profits or its profitsare inadequate, the remuneration and other termswill be subject to Schedule XIII of the Companies Act,1956.



“RESOLVED THAT pursuant to the provisions ofSection 269, 198, 309 and 311 read with ScheduleXIII and al l other appl icable provisions of theCompanies Act, 1956 ( including any statutorymodification or re-enactment thereof), the consent ofthe Members be and is hereby accorded to the re-appointment of Mr. Sunil Gupta as Whole Time Directorof the Company for a period of five years with effectfrom October 01, 2006 on the following terms andconditions as recommended by the RemunerationCommittee:-

I. Salary


II. Perquisites


Explanation




2. Contribution to Provident Fund, SuperannuationFund or Annuity Fund will not be included in thecomputation of the ceiling on perquisites to theextent these either singly or put together are nottaxable under the Income Tax Act.





Notwithstanding the foregoing, where in any financialyear during the currency of the tenure of the Wholetime Director, the Company has no profits or its profits

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are inadequate, the remuneration and other terms will besubject to Schedule XIII of the Companies Act, 1956.



“RESOLVED THAT pursuant to the provisions ofSection 269, 198, 309 and 311 read with ScheduleXIII and al l other appl icable provisions of theCompanies Act, 1956 ( including any statutorymodification or re-enactment thereof), the consent ofthe members be and is hereby accorded to the re-appointment of Mr. Shailesh Gupta as Whole TimeDirector of the Company for a period of five years witheffect from October 01, 2006 on the following termsand condit ions as recommended by theRemuneration Committee:

I. Salary


II. Perquisites


Explanation


For the purpose of calculating the above ceiling,perquisites shall be evaluated at actual cost. If theactual cost is not determinate, these shall beevaluated as per Income Tax Rules, whereverapplicable.

Use of Company Car for official purposes andTelephone at residence (including payment for localcalls and long distance official calls), shall not beincluded in the computation of perquisites for thepurpose of calculating the said ceiling.

2. Contribution to Provident Fund, Superannuation

Fund or Annuity Fund will not be included in thecomputation of the ceiling on perquisites to theextent these either singly or put together are nottaxable under the Income Tax Act.





Notwithstanding the foregoing, where in any financialyear during the currency of the tenure of the Wholetime Director, the Company has no profits or its profitsare inadequate, the remuneration and other termswill be subject to Schedule XIII of the Companies Act,1956.


19. To consider, and if thought fit, to pass, with or withoutmodification the following resolution as an OrdinaryResolution:

“RESOLVED THAT pursuant to the provisions ofSection 94(1)(a) and other applicable provisions, ifany, of the Companies Act, 1956, the Authorised ShareCapital of the Company be and is hereby increasedfrom Rs.55, 00,00,000/-(Rupees Fifty Five Croresonly) divided into 5,50,00,000 (Five Crore Fifty Lacs)Equity Shares of Rs. 10/-(Rupees Ten only) each toRs. 75,00,00,000/- (Rupees Seventy Five Crores only)divided into 7,50,00,000 (Seven Crore Fifty Lacs)Equity Shares of Rs. 10/-(Rupees Ten only) each bycreation of additional 2,00,00,000 (Two Crores) EquityShares of Rs. 10/- each (Rupees Ten only)aggregating to Rs. 20,00,00,000/- (Rupees TwentyCrores only), ranking paripassu with the existingEquity Shares of the Company.

RESOLVED FURTHER THAT the Board be and ishereby authorized to take all such steps as may benecessary, proper or expedient to give effect to thisresolution.”

20. To consider and, if thought fit, to pass, with or withoutmodification, the following resolution as a SpecialResolution:

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“RESOLVED THAT pursuant to the provisions of Section16 and all other applicable provisions, if any, of theCompanies Act, 1956, the existing Clause V of theMemorandum of Association of the Company be and ishereby deleted and substituted by the following: -

V. “The Authorised Share Capital of the Company isRs. 75,00,00,000 (Rupees Seventy Five Crores only)divided into 7,50,00,000 (Seven Crore Fifty Lacs)Equity Shares of Rs 10/- (Rupees Ten only) each,with power to increase or reduce the capital of theCompany and to divide the shares in the capital forthe time being into several classes and to attachthereto respectively such preferential, deferred,qualified or special rights, privileges or conditions,as may be determined by or in accordance with theArticles of Association of the Company and to vary,modify, amalgamate or abrogate any such rights,privileges or conditions in such manner as may bepermitted by the Act or the Articles of Association ofthe Company, for the time being.”


21. To consider, and if thought fit, to pass, with or withoutmodification, the following resolution as a SpecialResolution:

“RESOLVED THAT pursuant to the provisions ofSection 31 and all other applicable provisions, if any,of the Companies Act, 1956, the existing clause 3 ofthe Articles of Association of the Company be and ishereby deleted and substituted by the following:-

3. The Authorised Share Capital of the Company is Rs.75,00,00,000/- (Rupees Seventy Five Crores only)divided into 7,50,00,000 (Seven Crore Fifty Lacs)Equity Shares of Rs. 10/- (Rupees Ten only) eachcapable of being increased or decreased inaccordance with the Company’s regulations andlegislative provisions for the time being in force inthat behalf with the powers to divide the Share Capitalwhether original or increased or decreased intoseveral classes and attach thereto respectively suchrights and privileges as are allowed under ApplicableLaw.


22. To consider and, if thought fit, to pass, with or withoutmodification, the following resolution as an OrdinaryResolution:

“RESOLVED THAT subject to the guidelines issuedby the Securities & Exchange Board of India, pursuantto the provisions of the Companies Act, 1956 and

Article No.160 of the Articles of Association of theCompany and subject to such other approvals,permissions, sanctions as may be necessary, andsubject further to such terms, conditions, alterations,modifications, changes and variations as may bespecified while giving such approvals which theBoard of Directors of the Company (hereinafterreferred to as the “Board” which expression shall alsoinclude a Committee thereof) be and is herebyauthorized to accept, if it thinks fit, the Company beand is hereby authorized to capital ize uptoRs.10,03,90,200 out of Securities Premium Accountand transfer to Share Capital Account towards issueand al lotment of Equity Shares not exceeding1,00,39,020 Equity Shares of Rs. 10 each, as BonusShares credited as fully paid up, to the members ofthe Company holding Equity Shares of Rs. 10 eachwhose names stand on the register of members ofthe Company as on the Record Date, in the proportionof 1 new fully paid up Equity Share of Rs. 10 each forevery 5 existing Equity Shares of Rs. 10 each, heldas on the Record Date.

RESOLVED FURTHER THAT any of such New EquityShares which, on an exact distr ibut ion in theproportion aforesaid would fall to be allotted infractions, be allotted in the name of Director(s) of theCompany upon trust to sell the same and divide thenet proceeds amongst the shareholders entitled tosuch fraction pro rata in accordance with their rights.

RESOLVED FURTHER THAT the Bonus Shares soissued and allotted be treated for all purposes as anincrease of the Equity Capital of the Company heldby each such member/ person and not as incomeand that the said Equity Shares be issued andal lot ted, interal ia, on the fol lowing terms andconditions:

(i) The New Equity Shares of Rs. 10 each to beissued and allotted as Bonus Shares shall besubject to the Memorandum and Articles ofAssociation of the Company and shall rank paripassu in all respects and carry the same rightsas the then existing Equity Shares of theCompany, notwithstanding the date or dates ofallotment thereof, including entit lement topayment of full Dividend, if declared, for theFinancial Year in which the same are allotted.

(ii) No letters of Allotment shall be issued to theallottees of the Bonus Shares and the ShareCertificates in respect of the New Equity Sharesshall be issued and dispatched to the allotteesthereof within the period prescribed or that maybe prescribed in this behalf from time to time,except that the Bonus Shares will be credited tothe demat accounts of the allottees who areholding the existing Equity Shares in electronicform.

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(iii) the allotment of the fully paid New Equity Sharesas Bonus Shares to the extent that they relate tonon-resident members of the Company, shallbe subject to the approval of the Reserve Bankof India, under the Foreign ExchangeManagement Act, 1999, if necessary and

(iv) the Bonus Issue is not made in lieu of Dividend.

RESOLVED FURTHER THAT for the purpose of givingeffect to this resolution, the Board be and is herebyauthorized: -

(a) to do all such acts, deeds, matters and thingsas i t may in i ts absolute discret ion deemnecessary or desirable and to sett le anyquestion, difficulty or doubt that may arise inregard to the issue and distribution of BonusShares, as it may think fit; and

(b) to accept on behalf of the Company, conditionsor modifications, if any, relating to the issue ofthe Bonus Shares which may be required,proposed or suggested by RBI or any otherconcerned authorities, which the Board in itsdiscretion thinks fit and proper.”

23. To consider and, if thought fit, to pass, with or withoutmodification the following resolution as a SpecialResolution:

“RESOLVED that pursuant to the provisions of Section31 and all other applicable provisions, if any, of theCompanies Act, 1956, the Articles of Association ofthe Company be and is hereby altered in the mannerand to the extent that the existing clause 153 of theArticles of Association of the Company be and ishereby deleted and substituted by new clause asreproduced below and a new clause 153A be and ishereby inserted after clause 153 and before clause154 of the Articles of Association of the Company asreproduced below:

153. Notwithstanding anything contained in the Articles ofAssociation of the Company, unpaid and unclaimeddividend shall be dealt with in accordance withSection 205A and 205C of the Companies Act, 1956as amended from time to time.

153A. No unclaimed or unpaid dividend shall be forfeitedby the Board.


BY ORDER OF THE BOARD For JAGRAN PRAKASHAN LIMITED

Place : Kanpur (AMIT JAISWAL)Date : July 29, 2006 COMPANY SECRETARY

Notes:

1. The relative Explanatory Statements, pursuant toSection 173 of the Companies Act, 1956, in respectof the business under Item Nos. 6 to 23 above, areannexed hereto.

2. The relevant detai ls of persons seeking re-appointment/appointment as Directors under ItemNos. 2 to 4 and 7 to 13 above, as required by Clause49 of the Listing Agreement entered into with theStock Exchanges are given in Corporate Governancesection of the Annual Report. Members are requestedto refer to the Corporate Governance section of theAnnual Report.

3. A Member entitled to attend and vote is entitled toappoint a proxy to attend and vote instead of himselfand the proxy need not be a member of theCompany.

Proxies, in order to be effective must be received atthe Company’s Registered Office not less than 48hours before the meeting. Proxies submitted onbehalf of limited companies, societies, partnershipf i rms, etc. must be supported by appropriateresolution / authority as applicable, issued on behalfof the nominating organization.

4. Corporate Members intending to send their authorizedrepresentatives to attend the Meeting are requestedto send a certified copy of the Board resolutionauthorizing their representatives to attend and voteon their behalf at the Meeting.

5. The Register of Members and Share Transfer Booksof the Company will be closed from Wednesday,September 20, 2006 to Friday, September 29, 2006,both days inclusive for the purpose of Annual GeneralMeeting.

6. Shareholders holding shares in physical form arerequested to advise any change of addressimmediately to the Company’s Registrar and ShareTransfer Agents, Karvy Computershare PrivateLimited. Shareholders holding shares in electronicform must send the advise about change in addressor bank mandate to their respective DepositoryParticipants and not to the Company or its ShareTransfer Agents.

7. Copies of the Annual Report will not be distributed atthe Annual General Meeting. Members are requestedto bring their copies to the meeting.

8. Members are requested to send in their queries atleast a week in advance to the Company Secretary atthe Registered Office of the Company to facilitateclarifications during the meeting.

9. Pursuant to Sect ions 205A and 205C of theCompanies Act, 1956, there is no unclaimed/unpaiddividend, debenture interest and interest on depositas well as the principal amount of debentures anddeposits as at March 31st, 2006.

10. In case of jointholders only one jointholder, whosename is in highest order shall be entitled to vote.

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ANNEXURE TO THE NOTICE EXPLANATORY STATEMENT PURSUANT TO PROVISIONSOF SECTION 173 (2) OF THE COMPANIES ACT, 1956.

Item No. 6

J.N. Sharma & Co. Chartered Accountants, retiringStatutory Auditors, have shown their unwillingnessto be appointed as Auditors of the Company for theFinancial Year 2006-2007. Therefore, in compliancewith Article 158 of the Articles of Association of theCompany and based on the recommendations of theAudit Committee, the Board at its meeting held onJuly 29, 2006 recommended the appointment of PriceWaterhouse as Statutory Auditors for the FinancialYear 2006-07, in place of retiring Auditors, M/s J.N.Sharma & Co. at a remuneration and actual out ofpocket expenses to be decided by the Board. TheCompany has received a special notice from amember, proposing the appointment of Pr iceWaterhouse as the Statutory Auditors to hold officefrom the conclusion of this meeting till the conclusionof next Annual General Meeting of the Company anda certificate to the effect that their appointment, ifmade, would be within the prescribed limits undersection 224(1B) of the Companies Act, 1956, hasbeen obtained from them.

None of the Directors of the Company is concernedor interested in the proposed resolution.

Item Nos. 7 to 13

Mr. Anuj Puri, Mr. Bharatji Agrawal, Mr. Kishore Biyani,Mr. Naresh Mohan, Mr. Rashid Mirza, Mr. Vijay Tandonand Mr. Vikram Bakshi were appointed as AdditionalDirectors of the Company on November 18, 2005 andare Independent Directors in terms of Clause 49 ofthe Listing Agreement. As per the provisions ofSection 260 of the Companies Act, 1956, all the aboveDirectors hold office only up to the date of the ensuingAnnual General Meeting of the Company, and areeligible for appointment as Director. The Companyhas received notices under Section 257 of theCompanies Act, 1956, in respect of each of thecandidates, proposing their appointment as Directorof the Company, along with the requisite deposit.

Brief resume with nature of expertise in specificfunctional areas and name of other companies inwhich abovementioned persons are holdingdirectorships and the Chairmanships/Membershipsof Committee of the Board are given in the CorporateGovernance section of the Annual Report.

None of the persons seeking appointment under ItemNos.7 to 13 hold any shares in the Company.

The Board feels that the Company will benefit fromexperience and expertise of these persons andrecommends the passing of these resolutions.

Each of such Directors is concerned or interested inthe resolution relating to his appointment. No otherDirector is concerned or interested in the resolutions.

Item No. 14

Mr. Mahendra Mohan Gupta was appointed asChairman and Managing Director of the Company forthe period of 5 years w.e.f. 01.01.2005 by the Boardof Directors of the Company. He is looking after theaffairs of the Company as Chairman and ManagingDirector.

In view of the conversion of the Company from PrivateLimited to Public Limited, his appointment for theperiod on fresh terms, condit ions includingremuneration as set out in the body of resolution, incompliance with Section 269, 198, 309, 311 andSchedule XIII to the Companies Act, 1956 has beenmade by the Board subject to the consent of themembers in Annual General Meeting for a period of 5years w.e.f. 1st October, 2006.

Brief resume with the nature of expertise in specificfunctional areas and name of other companies inwhich Mr. Mahendra Mohan Gupta is holdingdirectorships and the Chairmanships/Membershipsof Committee of the Board are given in the CorporateGovernance section of the Annual Report.

The Board is of the view that due to Mr. MahendraMohan Gupta’s vast experience and knowledge, hisre-appointment as Chairman and Managing Directoron fresh terms and condit ions includingremuneration, will be in the interest of the Company.

The proposed resolution should also be constitutedas an abstract of terms and conditions of appointmentof Mr. Mahendra Mohan Gupta, which is required tobe sent to every member pursuant to Section 302 ofthe Companies Act, 1956.

Mr. Mahendra Mohan Gupta, himself, Mr. DhirendraMohan Gupta and Mr. Shailesh Gupta, being hisrelat ives are deemed to be interested in theresolution.

The Board of Directors recommend the resolutionfor the approval of the members.

Item No. 15

Mr. Sanjay Gupta was appointed as Whole TimeDirector of the Company for the period of 5 years w.e.f.1.10.2005 by the Board of Directors. He also holdsthe position of Editor & Chief Executive Officer (CEO)of our Company. He is looking after the affairs of theCompany as Whole Time Director.


Brief resume with nature of expertise in specificfunctional areas and name of other companies in

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which Mr. Sanjay Gupta is holding directorships andthe Chairmanships/Memberships of Committee ofthe Board are given in the Corporate Governancesection of the Annual Report.

The Board is of the view that due to Mr. Sanjay Gupta’svast experience and knowledge, his re-appointmentas Whole Time Director on fresh terms and conditionsincluding remuneration, will be in the interest of theCompany.

The proposed resolution should also be constitutedas an abstract of terms and conditions of appointmentof Mr. Sanjay Gupta, which is required to be sent toevery member pursuant to Section 302 of theCompanies Act, 1956.

Mr. Sanjay Gupta, himself is deemed to be concernedor interested in the resolution.


Item No. 16

Mr. Dhirendra Mohan Gupta was appointed as WholeTime Director of the Company for the period of 5 yearsw.e.f. 01.10.2005 by the Board of Directors of theCompany. He is looking after the affairs of theCompany as Whole Time Director.


Brief resume with nature of expertise in specificfunctional areas and name of other companies inwhich Mr. Dhirendra Mohan Gupta is holdingdirectorships and the Chairmanships/Membershipsof Committee of the Board are given in the CorporateGovernance section of the Annual Report.

The Board is of the view that due to Mr. DhirendraMohan Gupta’s vast experience and knowledge hisre-appointment as Whole Time Director on freshterms and conditions including remuneration, will bein the interest of the Company.

The proposed resolution should also be constitutedas an abstract of terms and conditions of appointmentof Mr. Dhirendra Mohan Gupta, which is required tobe sent to every member pursuant to Section 302 ofthe Companies Act, 1956.

Mr. Dhirendra Mohan Gupta, himself and Mr.Mahendra Mohan Gupta being his relative, aredeemed to be concerned or interested in theresolution.


Item No. 17

Mr. Sunil Gupta was appointed as Whole TimeDirector of the Company for a period of 5 years w.e.f.1.10.2005 by the Board of Directors. He was lookingafter the affairs of the Company as Whole TimeDirector.


Brief resume with nature of expertise in specificfunctional areas and name of other companies inwhich Mr. Sunil Gupta is holding directorships andthe Chairmanships/Memberships of Committee ofthe Board are given in the Corporate Governancesection of the Annual Report.

The Board is of the view that due to Mr. Sunil Gupta’svast experience and knowledge his re-appointmentas Whole Time Director on fresh terms and conditionsincluding remuneration, will be in the interest of theCompany.

The proposed resolution should also be constitutedas an abstract of terms and conditions of appointmentof Mr. Sunil Gupta, which is required to be sent toevery member pursuant to Section 302 of theCompanies Act, 1956.

Mr. Sunil Gupta, himself is deemed to be concernedor interested in the resolution.


Item No. 18

Mr. Shailesh Gupta was appointed as Whole TimeDirector of the Company for the period of 5 years w.e.f.01.10.2005 by the Board of Directors of the Company.He is looking after the affairs of the Company asWhole Time Director.


Brief resume with nature of expertise in specificfunctional areas and name of other companies inwhich Mr. Shailesh Gupta is holding directorshipsand the Chairmanships/Memberships of Committeeof the Board are given in the Corporate Governancesection of the Annual Report.

The Board is of the view that due to Mr. ShaileshGupta’s vast experience and knowledge his re-appointment as Whole Time Director on fresh terms

12


and conditions including remuneration, will be in theinterest of the Company.

The proposed resolution should also be constitutedas an abstract of terms and conditions of appointmentof Mr. Shailesh Gupta, which is required to be sent toevery member pursuant to Section 302 of theCompanies Act, 1956.

Mr. Shailesh Gupta, himself and Mr. Mahendra MohanGupta being his relative is deemed to be concernedor interested in the resolution.


Item No. 19 to 21

The present Authorised Share Capital of theCompany is Rs. 55,00,00,000/- (Rupees Fifty FiveCrores only) divided into 5,50,00,000 (Five Crore FiftyLacs) Equity Shares of Rs.10/- (Rupees Ten) each.The Paid-up Share Capital of the Company is50,19,50,970/- (Rupees Fifty Crore Nineteen LacsFifty Thousand Nine Hundred and Seventy Only). Inorder to faci l i tate further issue of capital , theAuthorised Share Capital of the Company is proposedto be increased from Rs. 55,00,00,000 (Rupees FiftyFive Crores only) to Rs. 75,00,00,000 (Rupees SeventyFive Crores only) divided into 7,50,00,000 (SevenCrore fifty lacs) Equity Shares of Rs.10 (Rupees Ten)each by creation of 2,00,00,000 (Two Crore) EquityShares of Rs.10 (Rupees Ten) each. The proposedincrease of the Authorised Share Capital of theCompany requires approval of Members in theGeneral Meeting. The alterations in the Memorandumof Association in Clause V as proposed in Item No.20and the Articles of Association in Clause 3 asproposed in Item No.21 are consequential changesto reflect the proposed change in the Authorised ShareCapital of the Company proposed in Item No.19.

A copy of the existing Memorandum and Articles ofAssociation of the Company together with a copy ofthe proposed alterations are open for inspection atthe Registered Office of the Company during thebusiness hours upto the date of the Annual GeneralMeeting.

The Directors of the Company recommend theresolutions as at Item No.19 to 21 to seek yourapproval for increasing the Authorized Share Capital,altering the Memorandum and Article of Association.

None of the Directors of the Company is deemed tobe concerned or interested in the proposedresolution.

Item No. 22

The Equity Shares of the Company are listed onNational Stock Exchange of India Limited and BombayStock Exchange Limited, and are actively traded. Inorder to increase liquidity and enhance the values ofinvestors, the Board of Directors of the Company atits Meeting held on July 29, 2006, recommended anissue of Bonus in the proportion of 1 (One) new EquityShare(s) of the Company of Rs. 10/- each for every 5(Five) existing Equity Share(s) of the Company of Rs.10/- each held by the members on the Record Date

to be fixed by the Board.

The proposed Bonus Issue shall be by capitalizingupto Rs.10,03,90,200 out of Securities PremiumAccount and transferring to Share Capital Accounttowards issue and allotment of Equity Shares notexceeding 1,00,39,020 Equity Shares of Rs. 10/- eachas Bonus Shares credited as fully paid up. Theproposed Bonus Issue is also in compliance withthe SEBI Guidelines.

As per Article 160 of the Articles of Association, it isnecessary for the members to approve the issue ofBonus Shares and capital izat ion of amountaccordingly.

It is also necessary to authorize the Board of Directorsof the Company to delegate the power to Bonus IssueCommittee for carrying out al l formali t ies andactivities in connection with the issue of BonusShares that may be prescribed by SEBI and StockExchanges on which the securities of the Companyare listed and any other regulatory authority.


The Directors of the Company are deemed to beconcerned or interested in the issue of Bonus Sharesto the extent of their shareholdings in the Company.

Item No. 23

In order to bring Article 153 in line with the amendedprovisions of the Companies Act, 1956, the existingArticle is sought to be substituted as given in thebody of resolution.

Further, one of the primary conditions for listing ofshares of the Company with the Stock Exchanges isthat the Articles of Association of the Company shouldbe in accordance with the model regulat ionsprescribed by the Stock Exchanges. In this regard,the Company has given an undertaking to NationalStock Exchange of India Limited and Bombay StockExchange Limited to amend the Art ic les ofAssociation of the Company, at the first GeneralMeeting of the Company held after the listing of itsshares. The amendment is for inserting the Clause153A stating that ‘No unclaimed or unpaid dividendshall be forfeited by the Board’.

As per the provisions of Section 31 of the CompaniesAct, 1956, approval of the shareholders by way of aspecial resolution is required to amend the Articlesof Association of a Company. Accordingly, theamendment to the Articles of Association of theCompany is proposed for approval of the members.

A copy of the Memorandum and Articles of Associationof the Company together with the proposed alterationis available for inspection by the members of theCompany at its Registered Office of the Companyduring the business hours upto the date of the AnnualGeneral Meeting.


None of the Directors is concerned or interested inthe Resolution.

13


DIRECTORS’ REPORT TO THE MEMBERSOF JAGRAN PRAKASHAN LIMITEDThe Directors of the Company have pleasure in presentingherewith the 30th Annual Report alongwith Audited Accounts ofthe Company for the year ended on 31st March 2006.

FINANCIAL RESULTS:

The summarized financial performance of the Companyfor the financial year ended 31st March 2006 as comparedto previous year is as under:

(Rs. in Lacs)

For the year For the yearended on ended on

31.03.2006 31.03.2005

PARTICULARS

Sales and Other Income 48353.18 37747.19

Total Expenditure 40702. 82 35054.28

Profit before Interest, Depreciation, Prior Period

Adjustments, Extra Ordinary items and Tax 7650. 36 2692.92

Less: Interest 761.09 686.87

Less: Depreciation 2012.06 1756.68

Profit before Prior Period Adjustments, Extra 4877.21 249.37Ordinary Items and Tax

Less: Prior Period Adjustments and Extra 300.00 50.26Ordinary items

Profit Before Taxes 4577.2 1 199.11

Less: Taxation 1407. 20 76.08

Profit After Taxes 3170.0 1 123.03

Balance Brought Forward from Previous Year 3277.01 4644.23

Balance available for Appropriations 6447. 02 4767.26

Appropriations:

Transfer to Debenture Redemption Reserve 250.00 250.00

Transfer to General Reserve 350.00 100.00

Proposed Dividend 0.00 1000.00

Interim Dividend 2007.80 0.00

Tax on Dividend 281.59 140.25

Balance carried to Balance Sheet 3557. 63 3277.01

FINANCIAL HIGHLIGHTS:

During the year under review, our Company recorded anincrease in total revenue of 28.10%, which was contributedby the increases in al l revenue streams includingadvertisement revenue, which increased by 31.52% andcirculation revenue which increased by 17.02% comparedwith the previous year as detai led in ManagementDiscussion and Analysis Report forming part of AnnualReport.

As a result of growth in total revenue, Profit before InterestDepreciation, Prior Period adjustments, Extra OrdinaryItems and Taxes; Profit before Tax and Profit after Tax haverecorded manifold growth from the previous year. In relation

to total revenue, Profit before Interest Depreciation, PriorPeriod adjustments, Extra Ordinary Items and Taxesincreased from 7.13% to 15.82%, Profit before Taxincreased from 0.53% to 9.47% and Profit after Taxincreased from 0.33% to 6.56%. Networth of the Companyafter Foreign Direct Investment and Initial Public Offer hasincreased from Rs. 68.57 crores as at 31.03.2005 to Rs.486.57 Crores as at 31.03.2006

DIVIDEND:

Interim dividend of Rs.5 per share on 4,01,56,077 equityshares declared and paid to the shareholders whose nameappeared in the Register of Members on November 18,2005 is final dividend for the year.

FOREIGN DIRECT INVESTMENT:

Independent News & Media PLC, a Company based inIreland and listed on London and Dublin Stock Exchangesthrough its Wholly Owned Subsidiary, Independent News& Media Investments Limited (INMIL) has invested in theEquity to the extent of 26 % of our pre-issue capital pursuantto approval accorded by Ministry of Information andBroadcasting, Government of India. They are our strategicpartners. Subsequent to Initial Public Offer (IPO), theirshareholding is diluted to 20.8% of our Equity ShareCapital.

CONVERSION FROM PRIVATE LIMITED TO PUBLIC LIMITEDCOMPANY:

The Company was converted from Private Limited to PublicLimited Company pursuant to the resolut ion ofshareholders passed on 18th November, 2005.Accordingly, the name of the Company was changed fromJagran Prakashan Private Limited to Jagran PrakashanLimited to reflect the status of the Company as PublicLimited Company.

INITIAL PUBLIC OFFER (IPO):

Pursuant to the Prospectus dated February 3rd 2006, theCompany made an IPO of 1,00,39,020 equity shares ofRs.10/- each for cash at a premium of Rs.310/- per equityshare aggregating to Rs.321.25 Crores through fresh issueof Equity Shares. In addition, there was a Green ShoeOption at the same price of 15,05,853 equity shares loanedto the Stabilizing Agent by a shareholder of the Company atthe price of Rs.320/- per equity share aggregating Rs.48.18 Crores. The IPO was over subscribed 12.29 timesconsidering Green Shoe Option as part of issue size and14.13 times without such consideration. Entire Green ShoeOption money was utilized by Stabilizing Agent, as informedto us by them, to stabilize the market price.

Out of IPO proceeds of Rs. 321.25 Crores received by theCompany in February 2006, amount of Rs. 19.80 Croreshas been paid for issue expenses, amount of Rs. 2.71Crores has been deposited as refundable security depositwith BSE and balance Rs. 298.75 crores has beentemporarily invested, as per the terms of prospectus inFDRs of bank and units of mutual fund.

Subsequent to the IPO, the Company’s paid-up sharecapital , and i ts securi t ies premium increased toRs. 50.19 Crores, Rs. 369.06 Crores (net of issueexpenses) respectively.

On February 22, 2006 the equity shares of the Companywere listed on Bombay Stock Exchange Limited and

14


National Stock Exchange of India Limited, Mumbai.

CHANGE IN SHARE CAPITAL:

The Company’s Capital comprises of Equity shares of the facevalue of Rs.10/- each. The Authorised Share Capital of theCompany was increased from Rs. 15,00,00,000 to Rs.55,00,00,000; Paid-up Equity Share Capital increased from Rs.10 Crores to Rs.12.35 Crores on Foreign Direct Investment onsubscription of 23,55,716 equity shares, then from Rs. 12.35Crores to Rs. 40.15 Crores on issue of fully paid bonus shares(in the ratio of 2.25 new equity shares for every one existingequity share held); and then from Rs. 40.15 Crores to Rs. 50.19Crores on allotment pursuant to IPO of 1,00,39,020 equity sharesduring the year.

BONUS SHARES:

The Board recommends the issue of 1 Bonus Share forevery 5 existing Equity Shares held in the Company bycapitalizing Rs. 10,03,90,200 out of Securities PremiumAccount.

DIRECTORS:

In terms of Shareholders Agreement entered into betweenIndependent News & Media Investments Limited (formerlyknown as Independent Print ing Company Limited),Promoters and Promoters‘ Group and the Company,nominees of INMIL namely, Sir Anthony J.F. O’Reilly, Mr.Gavin K. O’Reilly and Mr. Berry Brennan were appointed asAdditional Directors on the Board of the Company on July25, 2005. Subsequently in the Extra Ordinary GeneralMeeting held on August 17, 2005, appointment of theseDirectors was confirmed by the members.

In compliance with the provisions of Clause 49 of theList ing Agreement, the Board of the Company wasrestructured. Mr. Yogendra Mohan Gupta and Mr. SandeepGupta (Whole Time Directors); Mr. Devendra Mohan Gupta,Mr. Shailendra Mohan and Mr. Berry Brennan (Directors)resigned on November 18, 2005. The Board has placedon record its appreciation of the services rendered by themas Directors.

Mr. Anuj Puri, Mr. Bharatji Agrawal, Mr. Kishore Biyani, Mr.Naresh Mohan, Mr. Rashid Mirza, Mr. Vijay Tandon and Mr.Vikram Bakshi were appointed as Additional Directors, whoare Independent Directors in terms of Clause 49 of TheListing Agreement, on November 18, 2005. As per theprovisions of Section 260 of the Companies Act, 1956, theseDirectors shall hold office only up to the date of the AnnualGeneral Meeting of the Company. The Company hasreceived notices proposing appointment of all the abovepersons as Directors. Resolut ions seeking theirappointment have been incorporated in the Notice of theensuing Annual General Meeting.

Mr. Sandeep Gupta and Mr. Sameer Gupta were appointed

as Alternate Directors to Sir Anthony J.F. O’Reilly and Mr.Gavin K. O’Reilly on March 24, 2006. Subsequently on March25, 2006 both Mr. Sandeep Gupta and Mr. Sameer Guptaresigned from the position of Alternate Director. Mr. EamonnO‘ Kennedy and Mr. Devendra Mohan Gupta have beenappointed as Alternate Directors to Sir Anthony J. F. O’Reillyand Mr. Gavin K. O’Reilly, by the Board of Directors in itsmeeting held on July 29, 2006.

Mr. Dhirendra Mohan Gupta, Mr. Sunil Gupta and Sir AnthonyJ.F. O’ Reilly are directors liable to retire by rotation andbeing eligible, offer themselves for re-appointment, whichis also proposed in the Notice of the forthcoming AnnualGeneral Meeting.

MANAGING DIRECTOR/ WHOLE TIME DIRECTOR/SECRETARY OF THE COMPANY:

The Board in its Meeting held on July 29, 2006, has re-appointed Mr. Mahendra Mohan Gupta as Chairman andManaging Director; Mr. Sanjay Gupta as Whole TimeDirector designated as Chief Executive Officer; Mr.Dhirendra Mohan Gupta, Mr. Sunil Gupta and Mr. ShaileshGupta as Whole Time Directors for a period of five yearsw.e.f. October 1st , 2006 on the fresh terms and conditions.The fresh terms and conditions are contained in the Noticeof the ensuing Annual General Meeting.

The necessary resolutions for obtaining the approval ofthe shareholders for the appointment of Mr. MahendraMohan Gupta, Mr. Sanjay Gupta, Mr. Dhirendra MohanGupta, Mr. Sunil Gupta and Mr. Shailesh Gupta have beenincluded in the notice of the ensuing Annual GeneralMeeting.

Mr. Amit Jaiswal, Company Secretary of the Company hasalso been appointed as the Compliance Officer of theCompany.

FIXED DEPOSITS:

The Company has not accepted any public deposit and,as such, no amount on account of principal or interest onpublic deposits was outstanding on the date of the BalanceSheet.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956as amended by the Companies (Amendment) Act, 2000,the Directors confirm that:

In the preparation of the annual accounts, the applicableaccounting standards have been followed along with properexplanations relating to material departures.

i Appropriate accounting policies have been selectedand appl ied consistent ly and they have madejudgments and estimates that are reasonable andprudent, so as to give a true and fair view of the stateof affairs of the Company as on 31st March 2006 andof the Profit of the Company for that year.

15


ii Proper and sufficient care has been taken for themaintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and otherirregularities.

i i i The annual accounts have been prepared on a goingconcern basis.

AUDITORS:

The term of present Auditors of the Company, M/s J.N.Sharma & Co., Chartered Accountants, Kanpur expires atthe conclusion of the ensuing Annual General Meeting andthey have expressed their unwillingness to be reappointed.

Therefore, the Board recommends the appointment of PriceWaterhouse, Chartered Accountants, as Statutory Auditorsto hold office until the conclusion of the next Annual GeneralMeeting. A letter of consent has been received from themto act as auditor, if appointed and stating that theirappointment would be within the prescribed limits ofSection 224(1B) of the Companies Act, 1956

AUDITORS’ REPORT:

The notes to Accounts’ referred to in the Auditors’ Reportare self-explanatory and therefore, do not call for any furthercomments. Please also refer to Clause 12(iii)(c) of theCorporate Governance Report forming part of AnnualReport.

CORPORATE GOVERNANCE:

A Report on Corporate Governance as stipulated underClause 49 of the Listing Agreement and the certificate onCorporate Governance received from practicing CompanySecretary is presented in a separate section forming partof the Annual Report.

MANAGEMENT DISCUSSION AND ANAL YSIS REPORT:

Management Discussion and Analysis Report for the yearunder review as stipulated under Clause 49 of the ListingAgreement is presented in a separate section forming partof the Annual Report.

STATUTORY INFORMATION:

A. PARTICULARS OF EMPLOYEES

As required under Section 217(2A) of the CompaniesAct, 1956, read with the Companies (Particulars ofEmployees) Rules, 1975 as amended, a statementof information relating to the employees has beengiven in the Annexure hereto.

B. CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

CONSERVATION OF ENERGY

Although the operations of the Company are not energyintensive, steps are being taken to conserve energy in allpossible ways. The details relating to Disclosure ofParticulars with respect to conservation of energy in FormA to the Rules are not applicable to the printing andpublication Industry.

TECHNOLOGY ABSORPTION

The Company has not imported any specific technologyfor its printing and publication operations, although it hasadvanced technology printing machines, which are handledby the Company’s in-house technical team.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company being primarily engaged in printing andpublication of Newspaper does not have at present anysource to generate foreign exchange earning. The detailsof earnings and outgo in foreign exchange are as under.

(Rs. in lacs)

Year ended Year ended

31.03.2006 31.03.2005

Foreign exchange earned NIL NIL

Foreign exchange outgo

i. Import of Raw Materials 7422.71 12804.51

ii. Import of stores and spares 80.61 64.43

iii. Import of Capital goods 366.07 91.67

iv. Travelling Expenses 39.20 68.58

v. Interest on Term loan 265.09 174.81

vi . Other Expenses 1.73 1.70

ACKNOWLEDGMENTS:

The Directors of the Company take this opportunity to placeon record appreciation for the continued cooperation andsupport extended by the Authorities, Company’s Bankers,Credit Rating Agencies, Advisors, Stock Exchanges,Registrar and Share Transfer Agents, Businessassociates, Readers, Hawkers, as wel l as ourShareholders at large. Your Directors also deeplyacknowledge the contribution made by all the employeesof the Company at all levels.

ON BEHALF OF THE BOARD OF DIRECTORS For JAGRAN PRAKASHAN LIMITED

Place : Kanpur (MAHENDRA MOHAN GUPTA)Date : July 29, 2006 CHAIRMAN & MANAGING DIRECTOR

16


ANNEXURE TO THE DIRECTORS’ REPORT

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars ofEmployees) Rules, 1975:

A. Employees employed throughout the Financial Year:

Sl. . Name Designation Qualification Age Date of Experience Relative Gross LastNo. Years Joining Remuneration Employment

1 Mr. Mahendra Mohan Gupta Chairman and B.Com. 65 18 July 1975 45 years Brother of Mr. Yogendra Mohan Gupta, 29,82,137 First EmploymentManaging Director Mr. Dhirendra Mohan Gupta and Father

of Shailesh Gupta

2 Mr. Yogendra Mohan Gupta Whole Time M.Sc. 68 18 July 1975 48 years Brother of Mr. Mahendra Mohan Gupta, 16,73,747 First Employment(resigned w.e.f. 18.11.2005) Director Mr. Dhirendra Mohan Gupta and

Father of Mr. Sunil Gupta.

3 Mr. Dhirendra Mohan Gupta Whole Time B.A. 62 October 1st 40 years Brother of Mr. Yogendra Mohan Gupta, 28,63,053 ManagingDirector 2000 and Mr. Mahendra Mohan Gupta. Director, Jagran

Limited

4 Mr. Sunil Gupta Whole Time M. Com. 44 April 1st 1983 24 years Son of Mr. Yogendra Mohan Gupta 29,77,668 First EmploymentDirector

5 Mr. Sanjay Gupta Whole Time B.Sc. 43 October 1st 23 years Brother of Mr. Sandeep Gupta 29,93,648 Managing Director,Director 2000 Jagran Prakashan

(Delhi) Pvt. Ltd.

6 Mr. Sandeep Gupta Executive B.Tech 41 July 1st 1993 17 years Brother of Mr. Sanjay Gupta 24,67,972 First EmploymentPresident(Technical)

7 Mr. Sameer Gupta Executive M.Com 39 January 1st 19 years Son of Mr. Yogendra Mohan Gupta 24,86,073 Whole Time DirectorPresident (MIS) 2002 and Brother of Mr. Sunil Gupta Jagran Infotech

Limited

B. Employees employed during a part of the Financial Year: NIL

Notes- The Remuneration includes Salary, Allowances and Monetary value of perquisites as per respective terms of appointment.

- The nature of employment of all the persons engaged is contractual.

- All the employees have adequate experience and expertise to discharge the responsibilities assigned to them.

- Persons retained by the Company and drawing not less than Rs. 24 Lacs for the year OR not less than Rs. 2 Lacs per month.

Sl. . Name Designation Qualification Age Date of Experience Relative Gross LastNo. Years Joining Remuneration Employment

(Rs.)

1 Mr. Indrajit Sen Head of Jagran Engage, M.M.S., Bits 53 February25, 28 years None 4,04,528 President, Prime a division of the company. Pilani 2006 Site - a division of

Mudra Communications Pvt. Ltd

ON BEHALF OF THE BOARD OF DIRECTORS For JAGRAN PRAKASHAN LIMITED

Place : Kanpur (MAHENDRA MOHAN GUPTA)Date : July 29, 2006 CHAIRMAN & MANAGING DIRECTOR

17


REPORT ON CORPORATE GOVERNANCECorporate Governance is based on the principles ofintegrity, fairness, equity, transparency, accountability andcommitment to values. Good governance practices stemfrom the culture and mindset of the organization.

In compliance with the requirements of Clause 49 of ListingAgreement entered into with the Stock Exchanges, theDirectors present hereunder the Corporate GovernanceReport for the first time post listing:

1. LISTING OF THE COMPANY’S SHARES ON STOCKEXCHANGES:

The Company’s shares were listed on National StockExchange of India Limited (NSE) and Bombay StockExchange Limited (BSE) on 22nd February, 2006.

2. COMPANY’S PHILOSOPHY ON CORPORATEGOVERNANCE:

Corporate Governance is an integral part of management,execution of business plans, policies and processes asthe Company believes that it is a tool to attain and enhancethe competi t ive strengths in business and ensuresustained performance for continuously enhancing thevalue for every stakeholder.

Accordingly, Jagran Prakashan Limited (JPL) endeavorsto adhere to the highest levels of t ransparency,accountability and ethics in all its operations fully realisingat the same time social responsibilities. The Company’sfocus on Corporate Governance is reflected in following:

• Composition, size and functioning of and disclosuresto the Board of Directors and various Committees ofthe Board.

• Board’s commitment to discharge dut ies andresponsibilities entrusted upon them by the Statuteand to live upto the expectations of stakeholders ofthe Company and public at large.

• Strong value systems and ethical business conduct.

• Sound internal checks.

• Transparency, accountability, social responsibilityand ethics in all its operations.

• Putting in place the Code of Conduct for all themembers of Board and team of senior managementpersonnel.

• Efforts for prompt redressal of investors’ grievances.

• Appropriate delegation of authority responsibility,monitoring of performance and collective decisionmaking involving senior management team in all keydecisions.

• Automated seamless integrated work flow to ensureconsistency and timely flow of information.

3. BOARD OF DIRECTORS:

In compl iance with Clause 49 of the List ingAgreement, the Board was restructured on November18, 2005 to have an ideal mix of executive andindependent Directors to effectively monitor theperformance, and benef i t f rom the guidance,professional expertise and experience of the Directorsin management of the Company.

According to Clause 49 of the Listing Agreement, ifthe Chairman is Executive, at least half of the Boardshould consist of independent Directors. The Boardconsists of fourteen Directors. Nine Directors arenon-executive and out of these nine, seven areindependent, constituting 50% of total size of Board.

The Board comprises of Directors of repute, who areexperienced businessmen, professionals andexecutives. The executive Directors include seniorDirectors commanding respect in the industry for theirvaluable experience and contribution and the youngDirectors, who too have nearly a decade and halfexperience of the industry and are committed toestabl ish in the Company good CorporateGovernance standards. They look after their areas ofresponsibilities independently and seek guidancefrom the Chairman and Managing Director in all criticalmatters. JPL’s management team endeavours toadhere to the directions of the Board.

4. COMPOSITION OF BOARD OF DIRECTORS, AND PARTICULARS THEREOF:

Name Position No. of Board Meeting Whether attended Relationship with other Shareholding inattended during the year last AGM held on Directors the Company in

July 11, 2005 Number &Percentage

Mr. Mahendra Mohan Gupta Promoter, Executive/ Non-Independent 11 Yes Brother of Mr. Yogendra Mohan Gupta, 2674393;Director, Chairman and Managing Mr. Dhirendra Mohan Gupta, 5.33%Director Mr. Devendra Mohan Gupta,

Mr. Shailendra Mohan Gupta and Fatherof Mr. Shailesh Gupta

Mr. Sanjay Gupta Promoter, Executive/ 5 No Brother of Mr. Sandeep Gupta 1782927;Non Independent Director, CEO 3.55%

Mr. Dhirendra Mohan Promoter, Executive/ 8 No Brother of Mr. Yogendra Mohan Gupta, 2674393;Gupta Non Independent Director Mr. Mahendra Mohan Gupta, 5.33%

Mr. Devendra Mohan Gupta andMr. Shailendra Mohan Gupta.

18


Name Position No. of Board Meeting Whether attended Relationship with other Shareholding inattended during the year last AGM held on Directors the Company in

July 11, 2005 Number &Percentage

Mr. Sunil Gupta Executive/ Non Independent 11 Yes Son of Mr. Yogendra Mohan Gupta 594308;Director 1.18%

Mr. Shailesh Gupta Executive/ Non Independent 7 Yes Son of Mr. Mahendra Mohan Gupta 891465;Director 1.78%

Mr. Yogendra Mohan Gupta Promoter, Executive/(ceased to be a Director Non Independent Director 7 Yes Brother of Mr. Mahendra Mohan Gupta, 4160176;w.e.f. 18.11.2005) Mr. Dhirendra Mohan Gupta, 8.29%

Mr. Devendra Mohan Gupta, Mr. Shailendra Mohan Gupta andFather of Mr. Sunil Gupta.

Mr. Sandeep Gupta Executive/ Non Independent 7 Yes Brother of Mr. Sanjay Gupta 1782927;(ceased to be a Director Director 3.55%w.e.f. 18.11.2005)

Mr. Devendra Mohan Gupta Non Executive/ Non 1 Yes Brother of Mahendra Mohan Gupta, 2674393;(ceased to be a Director Independent Director Dhirendra Mohan Gupta, Yogendra 5.33%w.e.f. 18.11.2005) Mohan Gupta and Shailendra

Mohan Gupta.

Mr. Shailendra Mohan Gupta Non Executive/ Non 2 No Brother of Mr. Yogendra Mohan Gupta, 2674393;(ceased to be a Director Independent Director Mr. Mahendra Mohan Gupta, 5.33%w.e.f. 18.11.2005) Mr. Dhirendra Mohan Gupta and

Mr. Devendra Mohan Gupta.

Sir Anthony J.F. O’Reilly Non Executive/Non 1 NA Father of Mr. Gavin K. O’ Reilly Nil(Appointed as a Director Independent Directorw.e.f. 25.7.05)

Mr. Barry Brennan Non Executive, /Non 1 NA None Nil(Appointed as a Director Independent Directorw.e.f. 25.7.05 and ceased tobe a Director w.e.f. 18.11.05)

Mr. Gavin K. O’Reilly Non Executive/Non 1 NA Son of Sir Anthony J.F. O’ Reilly Nil(Appointed as a Director Independent Directorw.e.f. 25.7.05)

Mr. Anuj Puri Non Executive/ None NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05 )

Mr. Bharatji Agarwal Non Executive/ 1 NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05)

Mr. Kishore Biyani Non Executive/ None NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05 )

Mr. Naresh Mohan Non Executive/ 1 NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05 )

Mr. Rashid Mirza Non Executive/ 1 NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05 )

Mr. Vijay Tandon Non Executive/ 1 NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05)

Mr. Vikram Bakshi Non Executive/ None NA None Nil(Appointed as an Additional Independent DirectorDirector w.e.f. 18.11.05)

Mr. Sandeep Gupta and Mr. Sameer Gupta were appointed as alternate directors to Sir Anthony J.F. O’Reilly & Mr. Gavin K. O’ Reilly respectively, for the Board Meeting on 24.03.06and ceased to be director w.e.f. 25.03.2006.

Mr. Dhirendra Mohan Gupta, Mr. Sunil Gupta and Sir Anthony J.F. O’Reilly are directors liable to retire by rotation and being eligible offer themselves for reappointment.

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5. OUTSIDE DIRECTORSHIPS AND MEMBERSHIP OF BOARD COMMITTEES:

Name Number of Directorships in other Public Companies and Name Number of Committee positions held in other Companiesof those Companies and Names of those Companies

Chairman Member

Mr. Mahendra Mohan Gupta 1. Shakumbari Sugar and Allied Industries Limited None None

Mr. Sanjay Gupta None None None

Mr. Dhirendra Mohan Gupta None None None

Mr. Sunil Gupta 1. Shakumbari Sugar and Allied Industries Limited None None

Mr. Shailesh Gupta None None None

Mr. Yogendra Mohan Gupta(ceased to be Director w.e.f. 18.11.2005) 1. Kanchan Properties Limited None None

Mr. Sandeep Gupta(ceased to be Director w.e.f. 18.11.2005) 1. Jagran Infotech Limited

2. SPFL Securities Limited None None

Mr. Devendra Mohan Gupta(ceased to be Director w.e.f. 18.11.2005) 1. Kanchan Properties Limited

2. SPFL Securities Limited None None

Mr. Shailendra Mohan Gupta(ceased to be Director w.e.f. 18.11.2005) 1. Shakumbari Sugar and Allied Industries Limited 1. Shakumbari Sugar and

2. Kanchan Properties Limited Allied Industries Limited None

Sir Anthony J.F. O’Reilly(Appointed as Director w.e.f. 25.7.05 ) None None None

Mr. Barry Brennan(Appointed as Director w.e.f. 25.7.05 None None Noneand ceased to be Director w.e.f. 18.11.05)

Mr. Gavin K. O’Reilly(Appointed as Director w.e.f. 25.7.05 ) None None None

Mr. Anuj Puri None None None(Appointed as an Additional Directorw.e.f. 18.11.05 )

Mr. Bharatji Agarwal None None None(Appointed as an Additional Directorw.e.f. 18.11.05 )

Mr. Kishore Biyani 1. Pantaloon Retail (India) Limited None None(Appointed as an Additional Director 2. Pantaloon Industries Limitedw.e.f. 18.11.05 ) 3. PFH Entertainment Limited

4. Home Solutions Retail (India) Limited5. PFH Investment Advisory Company Limited6. PAN India Restaurants Limited7. Idiom Design & Consulting Limited8. Ambit Investment Advisory Company Limited9. In division Investment Advisors Limited10. Future Ideas Company Limited11. KB Mall Management Company Limited12. Galaxy Entertainment Corporation Limited13. Indus League Clothing Limited

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Name Number of Directorships in other Public Companies and Name Number of Committee positions held in other Companiesof those Companies and Names of those Companies

Chairman Member

Mr. Naresh Mohan 1. The Statesman Limited w.e.f. 16.04.2006 None None(Appointed as an Additional Directorw.e.f. 18.11.05 )

Mr. Rashid Mirza 1. Mirza International Limited None None(Appointed as an Additional Directorw.e.f. 18.11.05 )

Mr. Vijay Tandon None None None(Appointed as an Additional Directorw.e.f. 18.11.05 )

Mr. Vikram Bakshi 1. Ascot Hotels & Resort Limited None 1. PVR Limited(Appointed as an Additional Director 2. PVR Limitedw.e.f. 18.11.05 )

Notes : 1) Directorships held by Directors in other companies do not include alternate directorships, directorshipsin foreign companies, Section 25 and private limited companies.

2) In accordance with Clause 49, Chairmanships/Memberships only in Audit Committee & ShareholdersGrievance Committee of public limited companies have been considered for committee positions.

3) None of the directors is a member in more than 10 committees and is not a Chairman in more than 5committees across the Companies in which he is a director.

4) Relationship with other Directors means ‘Relative’ of other Directors as defined u/s 2(41) and Section6 of the Companies Act, 1956.

6. BRIEF PROFILE OF THE PRESENT DIRECTORS:

Mr. Mahendra Mohan Gupta aged 65 years, is theChairman & Managing Director and also holds theposition of Managing Editor. He holds a bachelor’sdegree in commerce. Mr. Gupta has more than 45years of experience in the print media industry. Mr.Gupta has held various key positions in the industryincluding being the Chairman of United News of India(“UNI”), President of Indian Newspaper Society (INS),President of Indian Languages NewspaperAssociation (ILNA), Council Member of Audit Bureauof Circulations, Member of Press Council of India,Member of Film Censor Board of India, Member ofBoard of Press Trust of India (PTI) besides holdingsenior honorary positions in various social andcultural organizations.

Mr. Gupta is also Member of Parliament (RajyaShabha) and presently Member on the Board of UNI,PTI, INS & Merchants’ Chambers of Uttar Pradesh.His work for the cause of society, Indian trade andindustry in general and Newspaper industry inparticular has been recognized by various social,cul tural and professional bodies in India. Forexcellence in Hindi newspaper, he has been honouredwith ‘Indira Gandhi Priyadarshini Award’ by All IndiaNational Unity Conference, New Delhi. Mr. Gupta alsoholds the post of the Non-Executive Chairman ofShakumbari Sugar and Allied Industries Limited,Jagran TV Private Limited, Rave Entertainment PrivateLimited and Rave@Moti Entertainment PrivateLimited. Mr. Gupta has been a director of ourCompany since inception of the Company.

Mr. Sanjay Gupta aged 43 years, is a whole-timeDirector and also holds the position of Editor& CEO.He holds a bachelor’s degree in science. Mr. Guptahas more than 23 years of experience in the printmedia industry. Besides being the Editor & CEO ofour Company, he is also responsible for ouroperations in the northern region comprising of NewDelhi, Haryana, Punjab, Himachal Pradesh andJammu & Kashmir. Mr. Gupta is also Director ofIndian Institute of Management, Lucknow and MotilalNehru Institute of Technology, Allahabad. Mr. Guptahas been a director of our Company since 1993.

Mr. Dhirendra Mohan Gupta aged 62 years, is awhole-time Director. He holds a bachelor’s degreein arts. Mr. Gupta has more than 40 years ofexperience in the print media industry. He is theDirector-in-charge of our operations in the westernregions of Uttar Pradesh and Uttaranchal. Mr. Guptahas been a director of our Company since inceptionof the Company.

Mr. Sunil Gupta aged 44 years, is a whole-timeDirector. He holds a bachelor ’s and a master ’sdegree in commerce. Mr. Gupta has more than 23years of experience in the print media industry. He isincharge of our operations in Bihar, Jharkhand andparts of eastern Uttar Pradesh. Mr. Gupta has been adirector of our Company since 1993.

Mr. Shailesh Gupta aged 37 years, is a whole-timeDirector. He holds a bachelor’s degree in commerce.Mr. Gupta has more than 16 years of experience inthe print media industry. He is a Member of Council

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of Audit Bureau of Circulations and heads ouradvertisement and marketing department. Mr. Guptahas been a director of our Company since 1994.

Sir Anthony O’Reilly aged 69 years, is a non-executive Director. Sir Anthony was educated inIreland at Dublin’s Belvedere College, UniversityCollege Dublin (UCD) and at the Incorporated LawSociety of Ireland. He is an honors graduate in civillaw, a solicitor and has completed a doctorate degreein agricultural marketing from the University ofBradford, England. Sir Anthony was the Chairman andPresident of HJ Heinz Company and a member ofthe Board of the New York Stock Exchange. He is theChairman of Waterford Wedgwood PLC and EircomGroup PLC. He has been a Director of IndependentNews & Media PLC since 1973, became the ExecutiveChairman in 2000 and Chief Executive in 2004. SirAnthony joined our Board on July 25, 2005 as anominee of Independent News & Media InvestmentsLimited.

Mr. Gavin K. O’Reilly aged 38 years, is a non-executive Director. He holds a bachelor’s degree inscience from Georgetown University BusinessSchool, Washington D.C. He has been a Director ofIndependent News & Media PLC since 1997 and wasappointed the Chief Operating Officer of IndependentNews & Media PLC in 2001. Mr. O’Reilly is thePresident of the World Association of Newspapersand Chairman of the National Newspapers of Ireland.He serves on the Board of a number of companiesincluding APN News & Media Limited, Australia. Mr.O’ Reilly joined our Board on July 25, 2005 as anominee of Independent News & Media InvestmentsLimited.

Mr. Anuj Puri aged 39 years, is an independentDirector. He holds a bachelor’s degree in commerce,is an Associate of the Inst i tute of CharteredAccountants of India (New Delhi), Associate of theChartered Insurance Institute, UK, Associate ofInsurance Institute of Surveyors & Adjusters (India)and an Associate of the Insurance Institute of India.Mr. Puri has over 15 years experience in multi-disciplinary consulting ranging from real estate tosocial development projects. Specifically in realestate sector, he has expertise in planning andundertaking demand assessment studies, valuationand transactional services including marketingstrategies based on technical analysis of real estatemarkets. His past experience ranges from feasibilitystudies, program requirement derivation, fund andinvestor sourcing. Mr. Puri has held various keypositions in the industry and is the Chairman of theReal Estate and Construction Committee (WesternZone) CII, a Member of National Retail Committee,CII and a Member of Public and Works DevelopmentCommittee, FICCI. At present, Mr. Puri is the ManagingDirector of Trammell Crow Meghraj PropertyConsultants Private Limited (formerly, ChestertonMeghraj Property Consultants Pvt. Ltd.). Mr. Purijoined our Board on November 18, 2005.

Mr. Bharat j i Agrawal aged 64 years, is anindependent Director. He holds a bachelor’s degreein science and a bachelor’s degree in law. Mr. Agrawalhas been practicing as an advocate for about 43years. Mr. Agrawal has been designated as SeniorAdvocate by the High Court, Allahabad in 1997 andhas been appointed as the Senior Standing Counselof the Income Tax Department in the High Court atAllahabad. He has been the Chairman and the ViceChairman of U.P. Bar Counci l and has beennominated as the Vice President (North Zone) of AllIndia Federation of Tax Practitioners. Mr. Agrawal hasbeen awarded ‘SUMMAN’ by the Income TaxDepartment in fiscal 1997. In addition, Mr. Agrawalholds various senior honorary position in varioussocial and cultural organisations. Mr. Agrawal joinedour Board on November 18, 2005.

Mr. Kishore Biyani aged 45 years, is an independentDirector. He holds a bachelor’s degree in commerceand a post graduate degree in marketing. Mr. Biyaniis the Managing Director of Pantaloon Retail (India)Limited (a Pantaloon Knowledge Group Company),a leading retail company in India and has more than18 years of work experience. His contributions to theretail industry have been recognized with severalawards including ‘The Retail Professional of the Year’at the Images Retail Awards – 2001, ‘CEO of the Year– 2001’ at the India Brand Summit, ‘Retail Face ofthe Year’ and ‘Most Admired Retailer of the Year’ atthe Images Retail Awards – 2004, ‘Retailer of theYear’ and ‘Retail Professional of the Year’ at the Reid& Taylor India Retail Summit – 2004, ‘FashionVisionary of the Year ’ at the Fifth Annual ImagesFashion Awards – 2005 and has also been a finalistat the ‘Ernst & Young Entrepreneur of the Year Award2005’. In addition, he is a Member of the IndianMerchant Chamber and Confederation of IndianIndustry (“CII”). Mr. Biyani joined our Board onNovember 18, 2005.

Mr. Naresh Mohan aged 64 years, is an independentDirector. He holds a bachelor’s degree in arts. Mr.Mohan has more than 43 years of work experience inthe print media industry. Prior to retirement in 1998,he worked with The Hindustan Times Limited asExecutive President. Subsequently, Mr. Mohan isengaged in media consultancy. Mr. Mohan has heldvarious key positions in the print media industryincluding being the President of INS, Chairman ofUNI, Chairman of Audit Bureau of Circulations andMember of Press Council of India. Mr. Mohan joinedour Board on November 18, 2005.

Mr. Rashid Mirza aged 50 years, is an independentDirector. He holds a diploma in leather technologyfrom Leather Sellers College, London and servedwith various leather companies in the U.K. Upon hisreturn to India, he joined his family business. In 1979,he along with his father promoted Mirza Tanners Ltd.(now, Mirza International Ltd.). He has around 30years of experience in the leather industry. Mr. Mirzais present ly the Managing Director of Mirza

22


Interational Limited. Mr. Mirza joined our Board onNovember 18, 2005.

Mr. Vijay Tandon aged 62 years, is an independentDirector. He graduated from the University of Delhi.Mr. Tandon is a qualified chartered accountant andfellow with Institute of Chartered Accountants of India.After qualifying as a chartered accountant in 1969,Mr. Tandon worked with Thakur, Vaidyanath Aiyar &Co., a leading firm of Chartered Accountants in NewDelhi and was a partner of the firm between 1980and 1999. As a chartered accountant and financialmanagement consultant, with over 30 years ofprofessional experience in various capacities, Mr.Tandon has been associated with number of privateand public sector companies and banks in audit ofaccounts. Mr. Tandon has extensive knowledge of thecorporate laws and was heading the CorporateDivision of Thakur Vaidyanath Aiyar & Co., CharteredAccountants. Mr. Tandon has been associated withpr int media industry in var ious capacit ies, aspublisher auditor, auditor representing the AuditBureau of Circulations and as director in AssociatedJournals Ltd. (National Herald Group of Publications).Also, as a management consultant, Mr. Tandon hasbeen associated with a number of consult ingservices in diverse sectors of economy, industry andpublic utilities funded by the Asian Development Bankand the World Bank in India as well as South & CentralAsia. Presently, Mr. Tandon is Principal Consultantwith GHK Consulting Ltd. a UK-based developmentconsultants. Mr. Tandon joined our Board onNovember 18, 2005.

Mr. Vikram Bakshi aged 51 years, is an independentDirector. He holds a bachelor’s degree in science.Mr. Bakshi has extensive experience spanning 25years in real estate, hospitality and retail. As theManaging Director & JV Partner of McDonalds India,a Joint Venture with McDonald’s Corporation of U.S.,he has successfully established McDonalds as theindustry leader in the food services sector in NorthIndia. Mr. Bakshi was nominated by Images RetailForum for “Retail Face of the Year Award 2004 & 2005.He was also nominated by ET under the category of“Entrepreneur of the year” for the Economic Timesawards 2004 & 2005. Mr. Bakshi’s role in institutionalwork includes, among others, being the Chairman,CII Sub-Committee on Tourism (Northern Region),Chairman, CII National Committee on Retailing,Chairman, CII Delhi State Council, Vice-President ofthe Hotel & Restaurant Association of Northern India,Chairman, CII Northern Region Committee onRetailing, Member Delhi State Council for Rights toInformation with the Government of National CapitalTerr i tory of Delhi , Administrat ive ReformsDepartment, Council Member of CII Northern Region& National Council. Mr. Bakshi joined our Board onNovember 18, 2005.

7. BOARD MEETING AND PROCEDURES:

7A. Scheduling and selection of Agenda Items for Boardmeetings

(i) Minimum four Board meetings are held in eachyear. Apart from the above, additional Boardmeetings are convened by giving appropriatenotice to address the specific needs of theCompany. In case of business exigencies orurgency of matters, resolutions are passed bycirculation.

(ii) All divisions/departments of the Company areencouraged to plan their functions well inadvance, particularly with regard to mattersrequiring discussion / approval / decision at theBoard / Committee meetings. All such mattersare communicated to the Company Secretary inadvance so that the same could be included inthe Agenda for the Board / Committee meetings.

(iii) The Board has complete access to anyinformation within the company and with theemployee of the company. The informationplaced before the Board includes:-

1. Annual operating plans and budgets and anyupdates.

2. Capital budgets and any updates.

3. Quarterly results for the company and itsoperating divisions or business segments.

4. Minutes of meetings of Audit committee andother Committees of the board as alsoresolutions passed by Circulation.

5. The information on recrui tment andremuneration of senior management personneljust below the Board level , includingappointment or resignation of Chief FinancialOfficer and the Company Secretary.

6. Show cause, demand, prosecution and penaltynotices which are materially important.

7. Fatal or ser ious accidents, dangerousoccurrences, any material effluent or pollutionproblems.

8. Any material default in financial obligations toand by the company, or substantial non-paymentfor goods sold by the company.

9. Any issue, which involves possible public orproduct liability claims of substantial nature,including any judgment or order which, mayhave passed strictures on the conduct of thecompany or taken an adverse view regardinganother enterprise that can have negativeimplications on the company.

10. Details of any joint venture or collaborationagreement.

11. Transactions that involve substantial paymenttowards goodwill, brand equity, or intellectualproperty.

12. Significant labour problems and their proposedsolut ions. Any signif icant development in

23


Human Resources/ Industrial Relations frontlike signing of wage agreement, implementationof Voluntary Retirement Scheme etc.

13. Sale of mater ial nature, investments,subsidiaries, assets, which is not in normalcourse of business.

14. Quarterly details of foreign exchange exposuresand the steps taken by management to limit therisks of adverse exchange rate movement, ifmaterial.

15. Non-compliance of any regulatory, statutory orlisting requirements and shareholders servicesuch as non-payment of dividend, delay in sharetransfer etc.

7B. Board Material distributed in advance

(i) Agenda and Notes on Agenda are circulated tothe Directors, in advance. Al l mater ialinformation is incorporated in the Agendapapers for facilitating meaningful and focuseddiscussions at the meeting. Where it is notpracticable to attach any document to theAgenda, the same is tabled before the meetingwith specific reference to this effect in theAgenda.

(ii) In special and exceptional circumstances,additional or supplementary item(s) to theAgenda are permitted. Sensitive subject mattersmay be discussed at the meeting without writtenmaterial being circulated in advance.

7C. Recording Minutes of proceedings at Board andCommittee meetings

The Company Secretary records the minutes of theproceedings of each Board and Committeemeetings. Draft minutes are circulated to all themembers of the Board / Committee for theircomments.

7D. Post Meeting Follow-up Mechanism

Action taken report on the decisions/minutes of theprevious meeting(s) is placed at the succeedingmeeting of the Board/Committee for noting by theBoard/Committee.

7E. Compliance

The Company Secretary while preparing the Agenda,Notes on Agenda, Minutes etc. of the meeting(s), isresponsible for and is required to ensure adherenceto all the applicable laws and regulations includingthe Companies Act, 1956 read with the Rules issuedthereunder and to the extent feasible, the Secretarial

Standards recommended by the Institute of CompanySecretaries of India, New Delhi.

7F. Board Meetings

There were 11 Board meetings held during thefinancial year 2005-06 on 16th May, 2005; 13th June,2005; 18th June, 2005; 25th June, 2005; 12th July,2005; 25th July, 2005; 18th August, 2005; 18thNovember(at 11:00 A.M.), 2005; 18th November(at12:45 P.M.), 2005; 9th December,2005 and 24thMarch, 2006.

Leave of absence was granted to the non-attendingdirectors and noted in the attendance register.

7G. Pecuniary Relationship and Transactions of Non-Executive Director with JPL:

Independent News & Media PLC is a strategic partnerholding 20.80% equity stake in the Company throughits Wholly Owned Subsidiary, Independent NewsMedia & Investments Limited (INMIL).

Sir Anthony J.F. O’ Reilly, Chief Executive and Mr. GavinK. O’ Reilly, Chief Operating Officer of IndependentNews & Media PLC representing INMIL, are non-executive directors on our Board.

Mr. Devendra Mohan Gupta and Mr. Shailendra MohanGupta were non-executive Directors of the Companyupto November 17, 2005. While Company was privatel imited, they were paid Rs. 7.5 lacs each asGuarantee Commission for providing personalguarantees for certain credit facilities taken by theCompany from the Banks.

Both Mr. Devendra Mohan Gupta and Mr. ShailendraMohan Gupta has gracefully consented to the requestof the management to waive the commission for theremaining period of the year 2005-06 as well as forfuture period on the assurance of the managementthat it will make best effort to get their personalguarantees withdrawn from the Banks.

7H. Remuneration of Directors:

i) Non-Executive Directors’ Compensation &Disclosures:

No Compensation/fees was paid to any of theseDirectors. However, s i t t ing fees, asrecommended by the Audit Committee and fixedby the Board of Directors in the Board Meetingheld on 24th March, 2006, for the subsequentmeetings, is Rs. 3500/- for each Board meetingand Rs. 2500/- for each Audit Committeemeeting. None of the non-executive Directorshas any holding in the share capital of theCompany.

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ii) Executive Directors:

Managerial Remuneration of all the ExecutiveDirectors during the financial year 2005-06 waspaid as per their terms of appointment asapproved by the shareholders The remunerationpaid to each director is as follows: -

Name of Directors Salary Value of Total(In Rs.) Perquisites (In Rs.)

(In Rs.)

Mr. Mahendra Mohan Gupta 24,00,000 5,82,137 29,82,137

Mr. Dhirendra Mohan Gupta 24,00,000 4,63,053 28,63,053

Mr. Sanjay Gupta 24,00,000 5,93,648 29,93,648

Mr. Sunil Gupta 24,00,000 5,77,668 29,77,668

Mr. Shailesh Gupta 16,80,000 5,16,384 21,96,384

Mr. Yogendra Mohan Gupta(Ceased to be director w.e.f. 18.11.2005) 15,13,333 1,60,414 16,73,747

Mr. Sandeep Gupta(Ceased to be director w.e.f. 18.11.2005) 12,10,667 372856 15,83,523

Note : 1) No bonuses, stock options and pensionwere paid to the Directors.

2) No incentives linked with performance aregiven to the Directors.

3) The Company has no stock option schemeand so no stock options are held by theExecutive Directors.

4) The term of Executive Directors is for aperiod of 5 years from the respective dateof appointment. The Company does nothave any service contract with any of thedirectors.

5) Besides above remunerat ion, theExecutive Directors are also entitled toCompany’s contribution to Provident Fund,Gratuity and encashment of leave, as perrules of the Company.

7I Demarcation of Authority and Responsibilitybetween the CMD and CEO:

Chairman and Managing Director of JagranPrakashan Limited is Mr. Mahendra Mohan Gupta andChief Executive Officer is Mr. Sanjay Gupta. There areclear demarcations of authority and responsibilitybetween the two as stated below:

• The Chairman and Managing Director is responsiblefor all strategic decisions within the guidelines givenby the Board and monitor ing the Company’sperformance periodically. His responsibilities alsoinclude preparation of business plan, decision ontaking new initiatives and representation of theCompany in the industry and at various other forums.As Chairman of the Board, he is also responsible forall Board matters and is the Managing Editor of theCompany.

• The Chief Executive Off icer is responsible forimplementat ion of business plan, formulat ingcorporate strategy, regular monitor ing of theoperations in addition to day to day affairs. He is alsothe Editor of the Company and is directly responsiblefor operations in northern region of the country.

8. BOARD COMMITTEES:

In terms of Clause 49 of the Listing Agreement, theBoard has constituted three committees i.e. AuditCommittee, Shareholders/Investors GrievanceCommittee and Remunerat ion Committee. Inaddition, the Board constituted committee to fix theprice of IPO shares and another committee to dealwith IPO related matters. Both the committees havesince been dissolved. Further, Board has alsoconstituted a Committee to open the bank accountsand give all such power of attorney/authorizations asmay be needed by the whole time directors andemployees to represent the Company before theGovernmental authorities etc.

(A) AUDIT COMMITTEE:

In compl iance with Clause 49 of the List ingAgreement and as per the requirements of Section292A of the Companies Act, 1956, an Audit Committeehas been constituted. The Audit Committee consistsof four non-executive directors.

(i) Composition and attendance in committeemeeting during the year :

Name of Committee Position Meetings MeetingsMembers held attended

Mr. Vijay Tandon Chairman (Non-Executive and 1 1Independent)

Mr. Naresh Mohan Member (Non-Executive and 1 1Independent)

Mr. Kishore Biyani Member (Non-Executive and 1 -Independent)

Mr. Gavin O’ Reilly Member (Non-Executive but non 1 -Independent)

Mr. Amit Jaiswal is Secretary to the Committee.

The primary objective of the Audit Committee is tomonitor and effectively supervise the Company‘sfinancial reporting process with a view to provideaccurate, timely and proper disclosures and theintegrity and quality of the financial reporting.

(ii) Terms of Reference

The Audit Committee shall in exercising its functionshave powers including but not limited to following:

• To investigate any activity brought to the notice of theCommittee.

• To seek information from any employee.

• To obtain outside legal or other professional advice.

• To secure attendance of outsiders with relevantexpertise, if it considers necessary.

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The Audit Committee shall perform such additionalfunction as would be assigned to it from time to timeby the Board and in particular the following-

• Overview of the company’s financial reporting processand the disclosure of its financial information toensure that the f inancial statement is correct,sufficient and credible

• Recommending to the Board, the appointment,reappointment and, if required the replacement orremoval of the statutory auditor and fixation of theaudit fees.

• Approval of the payment to the statutory auditors forany other services rendered by the statutory auditors.

• Reviewing with management the annual financialstatement before submission to the Board forapproval, with particular reference to:

• Matters required to be included in the Directors’Responsibility Statement to be included in the Boards’Report in terms of the clause (2AA) of section 217 ofThe Companies Act, 1956;

- Changes, if any, in accounting policies andpractices and reasons for the same;

- Major accounting entries involving estimatesbased on exercise of judgment by management;

- Significant adjustments made in the financialstatements arising out of audit findings;

- Compl iance with l ist ing and other legalrequirements relating to financial statements;

- Disclosure of related party transactions;

- Qualifications in the draft audit report.

• Reviewing, with the management, the quarterlyfinancial statements before submission to the Boardfor approval.

• Reviewing with the management, performance ofstatutory and internal auditors, and the adequacy ofinternal control systems.

• Reviewing the adequacy of internal audit function, ifany, including the structure of the internal auditdepartment, staffing, seniority of the official headingthe department, reporting scope and frequency ofinternal audit.

• Discussion with internal auditors on any significantfindings and follow up thereon.

• Reviewing the findings of any internal investigationsby the internal auditors into matters where there issuspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reportingthe matter to the Board

• Discussion with statutory auditors before the auditcommences, about the nature and scope of audit aswell as post-audit discussion to ascertain any areaof concern.

• To look into the reasons for substantial defaults inthe payment to the depositors, debenture holders,shareholders (in case of non payments of dividend)and creditors.

• To review the functioning of the Whistle BlowerMechanism, in case the same exists.

• Carrying out such other function as may be entrustedby the Board from time to time.

(B) REMUNERATION COMMITTEE:

In compl iance with Clause 49 of The List ingagreement, the Remuneration Committee of the Boardhas been constituted. The Remuneration Committeeconsists of four non-executive directors:

Name Position

Mr. Naresh Mohan Chairman (Non-executive and Independent)

Mr. Kishore Biyani Member (Non-executive and Independent)

Mr. Vijay Tandon Member (Non-executive and Independent)

Mr. Gavin K. O’Reilly Member (Non-executive but non-Independent)

Mr. Amit Jaiswal is Secretary to the Committee.

The terms of reference of the Committee are to determinethe company’s policy on specific remuneration packagefor Managing Director and Whole time Directors and anyother related matter referred to it by the Board from time totime in addition to recommendation/review ofremuneration to the Board.

There was no meeting of Committee held during theyear because no matter relating to remunerationcame up for consideration.

(C) SHAREHOLDERS / INVESTORS GRIEVANCECOMMITTEE :

In compl iance with Clause 49 of the List ingAgreement, the Shareholders/Investors GrievanceCommittee has been constituted by the Board for aspeedy disposal of letters/ complaints relating toshareholders/investors.

COMPOSITION OF COMMITTEE

Name of Committee Members Category

Mr. Bharatji Agarwal Chairman (Independent/Non-Executive)

Mr. Rashid Mirza Member (Independent / Non-Executive)

Mr. Sunil Gupta Member (Non-independent / Executive)

Mr. Sanjay Gupta Member (Promoter, Non-independent / Executive)

Mr. Amit Jaiswal, Company Secretary is designatedas the compliance officer and secretary member ofthe Committee.

The committee specifically looks into the redressalof shareholder and investor complaints on mattersrelat ing to refund orders, t ransfer of shares,dematerialization/ rematerialization, sub-division,consolidation of share certificates, issue of duplicateshare certificates, non-receipt of annual report, non-

26


receipt of declared dividends etc. In addition, thecommittee advises on matters which can facilitatebetter investor services and relations. As per theCertificate issued by Karvy Computershare PrivateLimited during the year under review; after the date oflisting, 389 letters/ complaints were received fromshareholders/investors, 378 of which were replied/resolved to the satisfaction of the shareholders/investors, and only 11 were pending as at 31.03.2006.These were subsequently replied/resolved.

9. CODE OF CONDUCT FOR DIRECTORS AND SENIORMANAGEMENT PERSONNEL:

In line with the amended Clause 49 of the ListingAgreement, which came into effect from 18th February2006, the Company adopted a Code of Conduct forits Directors and Senior Management. This Code isa comprehensive Code applicable to all the Directors(Executive as well as Non-Executive) as well asSenior Management Personnel. The Code lays down,in detail, the standards of business conduct, ethicsand governance.

A copy of the Code has been put on the Company’swebsite www.jagran.com

The Code has been circulated to all the members ofthe Board and Senior Management and thecompliance of the same has been affirmed by them.A declaration signed by the Chairman and ManagingDirector is annexed with the report.

10. The Company promotes ethical behaviour in all itsbusiness activities and has put in place mechanismof reporting illegal or unethical behaviour. Employeesare free to report violations of laws, rules, regulationsor unethical conduct to their immediate supervisor/notified person. No person has been denied accessto the Audit Committee. The Directors and SeniorManagement are obligated to maintain confidentialityof such reportings and ensure that the whistleblowers are not subjected to any discriminatorypractices.

11. GENERAL BODY MEETINGS

i) The details of Annual General Meetings held in last 3years are as under:

Year Da Day, Date and Time Venue

2004-05 29th AGM held on Monday, Jagran Building, 2, Sarvodaya11th July, 2005 at 11.30 A.M Nagar, Kanpur-208 005

2003-04 28th AGM held on Tuesday, Jagran Building, 2, Sarvodaya28th September, 2004 at 11.00 A.M Nagar, Kanpur-208 005

2002-03 27th AGM held on Saturday, Jagran Building, 2, Sarvodaya19th September, 2003 at 11.30 A.M Nagar, Kanpur-208 005

ii) Details of Extra-Ordinary General Meetings (EOGM) held during 2005-06:

Year Day, Date and Time Venue

2005-06 Held on Friday, 18th November, 2005 Jagran Building, 2, Sarvodayaat 12.15 P.M Nagar, Kanpur-208 005

2005-06 Held on Wednesday, 17th August, 2005 Jagran Building, 2, Sarvodayaat 11.30 A.M Nagar, Kanpur-208 005

2005-06 Held on Tuesday, 24th May 2005 Jagran Building, 2, Sarvodayaat 11.30 A.M. Nagar, Kanpur-208 005

Resolutions including Special Resolution to giveeffect to the Shareholders Agreement entered intobetween the Company and INMIL were passed at theEOGM held on 24th May 2005 and 17th August 2005.At the EOGM held on 18th November, 2005, theShareholders passed the Resolutions includingSpecial Resolut ions to approve Conversion ofCompany from Private Limited to Public Limited, IPOand other matters related thereto, to appoint Mr.Sandeep Gupta, a director’s relative as ExecutivePresident upon his vacating the seat on the Board asa result of restructuring and to amend the Objectclause of the Memorandum of Associat ion toexpressly provide for carrying on allied businesses.

The shareholders unanimously passed al l theresolutions including special resolutions, set out inthe respective notices. No resolution was put throughpostal ballot last year as per the provisions of Section192A of the Companies Act, 1956 and the rules framedthere under. No special resolution on the mattersrequiring postal ballot is proposed to be placed atthe ensuing Annual General Meet ing forshareholders’ approval.

12. DISCLOSURES:

i) Disclosures on materially significant related partytransactions

There is no significant or material related partytransactions that have taken place during the year,which have any potential conflict with the interest ofthe company at large. The detailed related partyinformation and transactions have been provided inNotes to Accounts in `Schedule 22 forming part ofAnnual Report.

All related party transactions are negotiated on armslength basis and are only intended to further theinterests of the Company.

ii) Details of Non-Compliance by the Company, penalties,stricture imposed on the Company by the StockExchanges, SEBI or any statutory authorities or any matterrelated to capital markets.

There has been no instance of non-compliance by theCompany on any matter related to capital markets duringthe last three years and hence no penalties or strictureshave been imposed on the Company by the StockExchanges or SEBI or any other statutory authority.

27


iii) Non-Mandatory Requirements

The Company has complied with following non-mandatory requirements of Clause 49 of the ListingAgreement.

(a) Remuneration Committee:

A sub-committee of Board of Directors named,as Remuneration Committee is constituted on18.11.2005.

(b) The Company has a whistle blower mechanismwherein the employees are free to reportviolations of laws, rules, regulations or unethicalconduct to their immediate supervisor or suchother person as may be not i f ied by themanagement. The confidential i ty of thosereporting violations shall be maintained andthey shall not be subjected to any discriminatorypractices.

(c) Audit Qualifications:

During the year, the Company succeeded inaddressing all audit qualifications (except the oneregarding amortization of title “Dainik Jagran”) ascontained in previous year`s audit report. In theopinion of the Directors, the title “Dainik Jagran” hasan infinite life and therefore does not need to beamortized in terms of Accounting Standard 26 issuedby the Institute of Chartered Accountants of India.However, the matter will once again be reviewed inconsultation with the auditors/experts and needful willbe done.

13. MEANS OF COMMUNICATION:

Since listing, the Company regularly intimates andpublishes its un-audited results in all the editions ofThe Economic Times of India and Dainik Jagran(Hindi). Quarterly results were sent to the StockExchanges immediately after the Board approvedthem. The financial results, official releases and otherrelevant information are regularly and promptlyupdated on the web site of the Company namelywww.jagran.com and simultaneously posted onElectronic Data Information Filing and Retrievalwebsite namely www.sebiedifar.nic.in. The latter isalso accessible through hyperlink from SEBI’s officialwebsite, www.sebi.gov.in.

Annual Report containing, inter alia, Audited AnnualAccounts, Directors’ Report, Auditors’ Report, andother important information is circulated to membersand others ent i t led thereto. The ManagementDiscussion and Analysis (MD&A) Report forms partof the Annual Report.

14. GENERAL SHAREHOLDERS INFORMATION:

(i) Annual General Meeting

Date: 29th September 2006

Time: 11.30 A.M

Venue: Merchants’ Chamber of Uttar Pradesh,14/76, Civil Lines,

Kanpur-208001.

(ii) Financial Calendar (tentative):

Financial year: 1st April to 31st March

For the year ended 31 March 2007, interim resultswill be announced as follows:

First Quarter - last week of July 2006

Second Quarter - third week of October 2006

Third Quarter - third week of January 2006

Fourth Quarter - third week of April 2007

(iii) Book Closure:

The book closure period for the purpose of AnnualGeneral Meeting is from 20th September 2006 to 29thSeptember 2006, both days inclusive.

(iv) Dividend:

An interim dividend of Rs. 5/- per share aggregatingto Rs. 20,07,80,385 was declared on 18.11.2005 andpaid on 30.11.2005, which your Directors propose tobe final for the year 2005-06.

(v) Listing on Stock Exchanges:

a) The Company’s equity shares are listed andtraded from 22.02.2006 on the following StockExchanges-

Name of Stock Exchange Stock Code

Bombay Stock Exchange Limited, Mumbai (BSE) 532705

National Stock Exchange of India Limited (NSE) JAGRAN

The ISIN Number (or demat number) of Jagran PrakashanLimited on both NSDL and CDSL is INE 199G01019.Annual listing fees for the year 2006-07 has been paid.

b) The Company’s 7.25% Secured, Redeemable,Taxable, Cumulat ive, Non-Convert ib ledebentures are listed on Wholesale Debt Market(WDM) of NSE having Stock Code: JAPR09.

The ISIN Number (or demat number) of JagranPrakashan Limited is INE 199G07016. Annuallisting fees for the year 2006-07 has been paid.

(vi) Stock Data:

Table given below shows the monthly high and lowprices and volumes of Jagran Prakashan Limited atthe Bombay Stock Exchange Limited, Mumbai (BSE)and the National Stock Exchange of India Limited(NSE) since listing (i.e. from 22nd February, 2006 to31st March, 2006)

Monthly Closing share price data and volumes, at BSE/NSE

Month NSE BSE

High (Rs.) Low (Rs.) Volume (No.) High (Rs.) Low (Rs.) Volume

February 2006 270.90 254.35 2,88,75,029 273.65 254.00 2,01,70,433

March 2006 314.35 252.65 1,20,67,087 308.85 252.70 94,61,000

Source: NSE and BSE Websites and BSE Certificate.

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(vii) Share price Performance in comparison to broad-based indices such as BSE Sensex and NSE Nifty

JPL’s Closing Share price performance relative toBSE Sensex and NSE Nifty:

Period Percentage change in(Since Listing)

22ndFeb. – 31st JPL(BSE) Sensex JPL relative JPL(NSE) Nifty JPL relativeMarch, 2006 to Sensex JPL to Nifty

7.58 11.20 3.62 8.69 12.63 3.94

(viii) Share transfer system:

In terms of SEBI Circular No. D&CC/FITT/CIR-15/2002 dated 27th December 2002, your company isproviding facility of a common agency for all the workrelated to share registry in terms of both physicaland electronic at a single point by our Registrar &Share Transfer Agents, (RTA) i .e. , KarvyComputershare Private Limited, whose address isgiven below:

Karvy Computershare Private LimitedKarvy House

46 Avenue 4, Street No.1

Banjara Hills, Hyderabad 500 034

Contact person: Mr. I.D. Chauhan, Asstt. General ManagerTel No 040-23420815 to 820Fax No. 040-23420814

Presently, the share transfers which are received inphysical form and requests received fordematerialisation/remateralisation of shares areprocessed and the share certificates are returnedwithin a period of 15 days from the date of receipt,subject to the documents being valid and completein all respects. Similarly, the processing activities ofdematerialisation/ remateralisation requests arenormally confirmed within 15 days from the date oftheir receipt, provided the documents are in order inall respects.

Mr. Sunil Gupta, Whole Time Director and Mr. AmitJaiswal, the Company Secretary are several lyempowered to approve transfer, transmission,demater ial isat ion, remateral isat ion etc.TheCompany obtains from a pract ic ing CompanySecretary half yearly certificate of compliance asrequired under clause 47(c) of the Listing Agreementand files the same with Stock Exchanges.

(ix) Shareholding Pattern:

Table give below shows the shareholding pattern ofJagran Prakashan Limited as on 31st March 2006.

a) Distribution of Shareholding by size, as on 31st March, 2006:

Category (Amount) No. of Cases % of Cases Total Shares Amount % of Amount

1 - 5000 89790 99.47% 2988780 29887800 5.96%

5001 - 10000 189 0.21% 140871 1408710 0.28%

10001 - 20000 110 0.12% 164960 1649600 0.33%

20001 - 30000 41 0.05% 100307 1003070 0.20%

30001 - 40000 22 0.02% 77570 775700 0.15%

40001 - 50000 17 0.02% 78527 785270 0.16%

50001 - 100000 25 0.03% 187058 1870580 0.37%

100001 & Above 78 0.09% 46457024 464570240 92.55%

Total 90272 100% 50195097 501950970 100%

b) Categories of Shareholding as on 31st March, 2006:

S/No. Category Shares held % of holding(No.)

1 Promoters and Promoters Group including persons acting in concert. 40156077 80.00

2 Mutual Funds & UTI 3388927 6.75

3 Banks, Financial Institutions, Insurance Companies, Central/ StateGov. Institutions/ Non-governmental Institutions, Venture Capital 901591 1.80

4 Foreign Institutional Investors (FIIs) 1032094 2.06

5 Private Corporate Bodies 994752 1.98

6 Indian Public 3534810 7.05

7 NRIs/OCBs 14189 0.03

8 Clearing Members 172657 0.34

TOTAL 50195097 100

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c) Dematerialization of shares:

Form No. Of Shares % Of Total

Held in dematerialized form in CDSL 7,37,786 1.47

Held in dematerialized form in NSDL 1,11,52,737 22.22

Physical form 3,83,04,574 76.31

Total 5,01,95,097 100

The Company’s shares are regularly traded on The National Stock Exchange of India Limited and Bombay StockExchange Limited, in electronic form.

d) Outstanding GDRs or warrants or any convertible instrument, conversion dates and likely impact on equity:

Not applicable for Jagran Prakashan Limited.

e) Investor services:

The Company under the overall supervision of Mr. Amit Jaiswal, Company Secretary is committed to provideefficient and timely services to its shareholders. The Company has appointed M/s. Karvy Computershare PrivateLimited as its registrars and share transfer agents for rendering the entire range of services to the shareholdersof the Company in regard to share transfer, refund, dematerialization, rematerialization, change of address,change of mandate, dividend etc.

f) Nomination:

Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose namethe shares shall be transferable in the case of death of all the registered shareholder/s pursuant to the provisionsof Section 109A of the Companies Act, 1956. The prescribed form for such nomination can be obtained from theCompany. Nomination facility in respect of shares held in electronic form is also available with depository participant(DP) as per the bye-laws and business rules applicable to NSDL and CDSL.

g) Address for correspondence:

Investors and shareholders can correspond with

1) The Company at the following address:-

The Company Secretary,

Jagran Building, 2 Sarvodaya Nagar,

Kanpur-208 005

Fax: +91-512-2216972

E-mail: [email protected]

Website: www.jagran.com

AND/OR

2) The Registrars and Share Transfer Agents of the Company –

Karvy Computershare Private Limited

Unit: Jagran Prakashan Limited

“KARVY HOUSE”

46, Avenue 4, StreetNo.1

Banjara Hills,

Hyderabad- 500 034

Website: www.karvy.com

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h) Printing Centers:

S.NO PLACE ADDRESS

1 KANPUR Jagran Building, 2, Sarvodaya Nagar, Kanpur

2 LUCKNOW 57 A-3, Meera Bai Marg, Lucknow

3 GORAKHPUR 23, Civil Lines, Gorakhpur

4 VARANASI Plot No. 321, Old G.T. Road, Nadesar, Varanasi

5 ALLAHABAD 7, P.D. Tandon Road, Allahabad

6 MEERUT 140-141D, Saket, Meerut.-250 006

7 DEHRADUN Plot No. 918/922, Industrial Area, Patel Nagar, Dehradun

8 AGRA Old L.I.C. Building, Jiwani Mandi, Agra

9 ALIGARH Chandra Talkies Bhawan, Agra Road, Aligarh

10 BAREILLY 130, Civil Lines, Bareilly

11 MORADABAD Jagran Bhawan, Kanth Road,(Harthala) Moradabad.

12 JALANDHAR C-120, Focal Point Extension, G.T. Road, Jalandhar.

13 NOIDA F21 to F23, Sector-8, Noida

14 HISSAR 21 Industrial Estate, Hissar

15 PATNA Rashmi Complex, 172/92/11-B/2, Circle No. 243,

Kidwai Puri, Patna

16 RANCHI 62, Kokar Industrial Area, Ranchi

17 DHANBAD Punchsheel Cinema Building, Dhaiya, Dhanbad

18 JAMSHEDPUR Shailendra Singh Complex, Dinna Road,

Mango, Distt. East Singbhum, Jamshedpur

19 BHAGALPUR Mahatma Gandhi Road, Bhagalpur

20 PANIPAT Plot No. 75, Sector - 29 Huda, Panipat

21 LUDHIANA Plot No. D360, Phase -VIII, Ludhiana

22 HALDWANI (NAINITAL) Devalchaur, Rampur Road, Haldwani

23 MUZAFFARPUR Uma Shanker Marg, Near Pani Tanki, Ramna, Muzaffarpur

24 JAMMU SIDCO Industrial Complex, Bari-Brahmana, Jammu

25 DHARAMSHALA Mahal Kuthman, Mauza Bandi, Dharamshala Distt. Kangra

26 *SILIGURI Puloke Bhawan, Burdwan Road, Siliguri

27 **BHOPAL Jagran Bhawan, 33 Press Complex, M.P. Nagar, Bhopal

28 **REWA Jagran Bhawan, Gandhi Nagar, Urrahat, Rewa

29 **INDORE 105/3 Mangaliya Road, Sanwer Road, Indore

*Printing of newspaper has been outsourced

**Owned by Jagran Prakashan Limited’s Associate Companies

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DECLARATION BY CHAIRMAN AND MANAGING DIRECTORI, Mahendra Mohan Gupta, Chairman and Managing Director of JAGRAN PRAKASHAN LIMITED, hereby confirmpursuant to clause 49(1)(D) of the Listing Agreement, that :

• The Board of Directors of JAGRAN PRAKASHAN LIMITED has laid down a code of conduct for all BoardMembers and Senior Management Personnel of the Company. The said code of conduct has also beenposted in the Investors Relation page in the website of the Company www.jagran.com

• All the Board members and Senior Management Personnel have affirmed their compliance with the saidcode of conduct for the year ended March 31, 2006.

Place: Kanpur Mahendra Mohan Gupta

Date: July 29, 2006 Chairman and Managing Director

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MANAGEMENT DISCUSSION AND ANALYSISForward-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 thataddress expectations or projections about the future, including but not limited to statements about the Company’sstrategy for growth, product development, market position, expenditure, and financial results, are forward-lookingstatements. Forward-looking statements are based on certain assumptions and expectations of future events. TheCompany cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company’sactual 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 lookingstatements, on the basis of any subsequent developments, information or events.

Overview-Financial Year 2005-06:

The year 2005-06 was eventful. During the year, long awaited strategic partnership with Independent News & MediaPLC (INM), a reputed media house of Europe publishing 175 titles of newspaper and magazines across four continentsand 21 countries of the world, materialized. We believe that JPL is the first print media Company having an overseasstrategic partner. In this year only, the value of Company was unlocked through the process of IPO and the Companymoved from a closely held Company to a regime of Corporate Governance.

National Readership Survey (NRS) 2005, which was done after a gap of a few years, also acknowledged for the firsttime “Dainik Jagran” as No.1 newspaper of the country whereas Indian Readership Survey (IRS) continued to reaffirmthe number one status of “Dainik Jagran” sixth time in a row. After NRS 2005, “Dainik Jagran” became first newspaperin the history of the Country to cross the 20 million thresholds.

To consolidate the position further in existing footprint area, three new editions viz. Muzzafarpur, Jammu and Dharamshalawere launched during the year under report.

“Dainik Jagran” within a period of about 6 years from the entry into Punjab became number one newspaper for the firsttime in three crucial towns (viz. Jallandhar, Ludhiana and Amritsar) of the State in terms of readership (Source: IRS 2006Round I.)

The year was also marked by more than expected performance registering a top line growth of over 28% and a completeturn around of bottom line as compared to the previous financial year. The largest contribution in growth was ofadvertisement revenue, which grew by about 32% as against overall industry’s growth rate of approx 15% in thecalendar year 2005. As per Pitch Madison Survey, this growth in advertisement revenue was far in excess of growthachieved by any English newspaper or any other competitor.

Given the expected growth in Indian economy, trend of growth achieved by the Company in the past, high potential fororganic as well as inorganic growth in the industry, Company’s initiatives in non-newsprint based activities and futureplans, we expect that the growth of 20% in top line is sustainable in medium term.

Industry Structure:

The structure of the Indian print media industry is highly fragmented, with over 6500 daily newspapers. The Indian printmedia and its advertising clients use two indicators to evaluate the reach of a newspaper: circulation and readership.Circulation is “Net Paid Sales” of a publication as per ABC certificate. Readership consists of respondents who haveread or looked at a publication in its periodicity (i.e., yesterday for a daily, in the last seven days for a weekly, in the lasttwo weeks for a fortnightly and in the last month for a monthly).

Set forth below is a table showing a breakdown of the print media industry by total number of readers and the percentageof the population who are readers as per IRS 2006, Round 1.

Urban & Rural Urban Rural

Base Population Millions % Millions % Millions %

Any Publication 184.37 23.50% 99.88 41.63% 84.49 15.51%

Any Daily 170.57 21.74% 93.90 39.14% 76.66 14.08%

Any Hindi Daily 62.80 8.00% 35.70 14.88% 27.10 4.98%

Any English Daily 17.45 2.22% 15.92 6.64% 1.53 0.28%

Any Magazine 57.42 7.32% 32.73 13.64% 24.69 4.53%

These figures indicate that a higher percentage of the population in the urban areas read any print media than theirrural counterparts. The overwhelming majority (about 91%) of English-language newspaper readers are located in the

33


urban area while the number of readers of Hindi-language and other Indian-language newspapers are more evenlydistributed between the urban and rural areas. The figures also show that a much lower percentage of rural residentsare readers of print media in general which indicate potential.

(i) Media penetration in India:

As per IRS 2006 Round I data, the print media penetration in Urban as well as Rural India is higher, percentage-wise, among people in the upper socio-economic classes compared with those in the lower socio-economicclasses. However, due to the sheer number of people who fall into the lower socio-economic classes, the numberof readers in the lower socio-economic classes still outnumbers those in the upper socio-economic classes onan absolute basis, which indicates that there is plenty of potential for growth in readership numbers.

(ii) India Ad-spend:

Print accounted for the largest share of ad-spend in 2005 with 47.8%, followed by the television (42%) outdooradvertising (7.3%), radio (1.7%), cinema advertising (0.30%) and Internet (0.90%). The total ad-spend in 2005was estimated to be Rs. 119.15 billion, a 15.1% increase compared with 2004. Print media ad-spend increasedby 14.9% in 2005 (Source Pitch-Madison Survey). The volume of advertisements in Hindi newspapers is increasingat a faster rate than the volume of advertisements in English newspapers. The table below sets forth the Englishnewspapers’ space and the Hindi newspapers’ space of the Indian newspaper advertisement market and thepercentage increase in total volume for each in fiscal 2006. The table also shows that total space published inHindi newspapers is over 81% of the total space published in English newspaper in 2006, which figure was 76%in 2005. However, due to higher rate per column centimeter inspite of lesser penetration, English newspaperscontinue to attract the highest advertising revenues, followed by Hindi- and other Indian-language newspapers.

Space of Advertisements Space of Advertisements Growth in advertisementsby Column Centimeters by Column Centimeters by Column CentimetersPublished in Financial 2006 Published in Financial 2005 Published in Financial

2006 Compared withFinancial 2005

English Newspapers 44002141 42298599 4%

Hindi Newspapers 35874720 32232267 11%

(Source: Tam Adex)

Note : The table does not include the figures of those publications, which were not reported in both years.

Opportunities and Threats:

The GDP continues to grow at 7% to 8% culminating into rise in overall as well as disposable incomes of theindividuals, as discussed under the paragraph titled as “Outlook”. Similarly, literacy level, which as per lastcensus was 65.2% for whole of India and 47% to 54% in most of our areas of operation, is constantly increasing.Media penetration especially in rural areas is on rise and there is a potential for increased ad- spend as percentageof GDP, which in 2004 was just 0.45% in India as against 1.32% in North America. These factors cumulativelypresent huge opportunity. Our competitive strengths such as sustained positioning of our brand “Dainik Jagran”as No.1 newspaper of the country, brand loyalty, financial capacity, pan India presence, scale of operations,strategic partnership with INM, will enable us to use every available opportunity to our advantage. JPL has avaluable but commercially unexploited asset in form of its internet portal, which is the most visited Hindi portal ofthe world. In addition, out of home advertising, which is expected to grow at a CAGR of 14% upto 2010 and shortcode service having vast potential of growth in view of rapidly increasing mobile users add to the opportunitiesavailable to the Company in print media.

Your Company is working on plans to commercially exploit the portal commensurate with its position and hasalready expanded its out of home advertising activity in a big way. Efforts are also on to take high potential shortcode service to next level. The consolidation in print media, which is highly fragmented, has just begun. It providesopportunity to expand in new markets and strengthen the positioning further in existing markets. The Companyhas been receiving various proposals of acquisitions/ joint ventures in print media and have actively been lookingat these proposals. However, cautious approach is adopted while analyzing these proposals. Your directors arecommitted to ensure that no decision is taken in haste and would like to assure you that no such investment shallbe made unless and until it is synergistic to or compliments the Company’s business and creates value for theCompany and its stake holders.

Your Directors do not perceive that the Company as such has any threat to its business or financial condition. Ofcourse, every business has risks and concerns, and we are no exception. Please refer to the “Risks and Concerns”for our views.

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Outlook:

It is estimated that print media market (circulation and advertisement revenue), which was Rs. 10900 crores(estimate) in 2005, would grow at a CAGR of 12% upto 2010, meaning thereby a market size of Rs. 19500 croresby 2010. (Source: PWC Report). According to Pitch-Madison Survey, advertising industry in 2006 is expected togrow at 17.7% to march past Rs. 14,000 crores mark and in that print media is expected to grow at 20%.

This growth in the industry over next 5 years is expected to be driven by increase in literacy levels coupled withincrease in over all and particularly disposable income levels. So far, low literacy level in India has placed a limiton the growth in the percentage of persons reading newspaper compared with percentage of the population thatis exposed to other media such as television. However, the literacy levels in India are constantly increasing moreso outside Metros and other major cities of the country.

The following chart illustrates the rise in the overall income level of the Indian population per annum:

Classes Financial Year 1995 Financial Year 2000 Financial Year 2006

(Projected)

Rich (above Rs. 215,000) 1 million households 3 million households 6 million households

Consuming(Rs.45,000-2,15,000) 29 million households 66 million households 75 million households

Climbers ( Rs. 22,000 - 45,000 ) 48 million households 66 million households 78 million households

Aspirants ( Rs. 16,000 - 22,000) 48 million households 32million households 33 million households

Destitute ( less than 16,000 ) 32 million households 24 million households 17 million households

Source: The Marketing Whitebook (2003-04)

We believe that print media industry has enormous opportunities to enhance readership number in the comingyears as literacy levels continue to rise, poverty level decline and Indian GDP continues to record robust growth of7 to 8 percent. In addition, improved infrastructure in rural areas will lead to newspaper becoming more readilyavailable to the rural population.

Risks and Concerns: -

1) Competition-

The Indian newspaper industry is intensely competitive. In each of our markets, we face competition from othernewspapers for circulation, readership and advertising. In addition, we face competition from other forms ofmedia, such as, television, radio and websites.

In the event of price competition for circulation or advertisement revenue, we may have to (1) increase number ofpages per copy, (2) reduce the cover price of our newspapers, (3) reduce our advertisement rates (4) offer otherprice incentives or (5) offer promotional schemes. Any reduction in prices or rates or the introduction of priceincentives/promotional schemes could have a material adverse effect on our results of operations.

Management Perception:

Like any other newspaper publisher, we too have competition but our competitive strengths as outlined belowenhance our capabilities to meet the competition effectively. Further, we have competed successfully in the pastand in the new markets, we have always endeavored to expand the market size and make our own readers base,more than targetting the readers of existing newspapers.

We believe that following are our competitive strengths, which help us in meeting the competition successfully:

1. Strong National Brand:

- Continued Number One position in terms of readership for past 6 successive rounds of IRS and constantlyincreasing gap from the closest competitor (Source: IRS).

- First publication in the history of country to cross mark of 20 million readers (Source NRS 2005).

- Number one newspaper in terms of readership in almost all IRS categories considered important by theadvertisers.

- Highest circulation among all daily newspapers (Source: ABC certified figures for July-December 2005).

- The most credible newspaper brand in the country (Source: Globscan Survey commissioned by BBC andReuters made public in May 2006)

- “Dainik Jagran” becoming one of the “SUPER BRANDS” of the country.

35


2. Editorial excellence ensuring trust worthy contents commands brand loyalty of the readers.

3. Pan- India Infrastructure comprising of large network of printing facilities, business offices, district offices, groundreporters deep down the village level and IT infrastructure enables us to provide localised and timely news, givesus ability to attract advertisement revenue from a vast market base and reduces our dependence on a fewermarkets.

4. Strong networth and liquidity enables us to compete successfully.

5. Sustained focus on interaction with our readers through CRM and PCC activities get us first hand feed back andthus ensures timely product improvement.

6. Large scale of operations result in economies in operations.

7. Investment in product development and upgradation of technology on regular basis keeps us always competitive.

8. Strong growth potential in our areas of operation as discussed under the headings “Overview” and “Opportunities”present enormous opportunities of future growth.

9. Our Strategic partnership with INM brings us best of the international practices in addition to potential opportunities.

2) Dependence on Advertisement Revenue-

We rely substantially on advertising customers for our revenue. During the year ended on 31st March 2006 and31st March 2005, we derived respectively 63.38% and 61.73% of our total revenues from advertisements.

Ad-spend by our customers and our ability to attract new customers is influenced largely by the circulation andreadership of our newspapers, by readership demographics, by the preference of advertising customers for onemedia over another and, with respect to national advertising, the geographical reach of our newspapers. Inaddition, ad-spend is influenced by a number of factors including the Indian economy, the performance of particularindustry sectors, shifts in consumer spending patterns and changes in consumer sentiments and tastes.


The Company has been achieving the advertisement revenue growth far ahead of industry’s overall growth rate forsome years. During the period of 3 years ended on 31.03.2005, advertisement revenue grew at a CAGR of 22.35%and in 2005-06 growth was nearly 32%. It has been possible due to our abilities to attract new advertisers,increase our card rates every year, increase in colour advertising and higher growth in market size of our areas ofoperation, which is likely to continue. Going forward, we believe that our competitive strength will enable us tomaintain our leadership position in Indian newspaper market and we will be able to continue to have thresholdnumbers of circulation and readership, which matter to the advertisers. Further, second brand of newspaperplanned to be launched shortly aims at increasing our market share.

3) Newsprint price fluctuation:

Newsprint forms the major raw material for our business and represents a significant portion of our expenses.For years ended 31st March 2006, 31st March 2005 and 31st March 2004, newsprint costs represented 46.29%,50.52%, 45.29% of our total income respectively. We have no long-term supply contract for the supply of newsprint.The price of newsprint both worldwide and in India has historically been both cyclical and volatile. It has constantlybeen increasing for past 3 years and C & F price for Russian newsprint is currently US$ 630 per tonne. We do nothedge the price of our newsprint purchases.


Non-newsprint based activities such as out of home advertising, event management and SMS service will enhanceour capability to bear the additional burden on account of any unprecedented fluctuation in newsprint prices. In thepast, we have been able to recover part of increased cost of newsprint from newspaper sale itself and if the pricesof newsprint reach uneconomical levels, we believe that all newspaper publishers will consider recovery of atleast part of such increases by increasing the cover prices.

We normally buy newsprint on a credit period of 60 days from the date of shipment, which means that we have tomake payment within 2-3 weeks of receipt of material. We do not expect any wild fluctuation in currency duringsuch a short period of time, warranting hedging, cost of which, based on our experience, is likely to be higher thanthe fluctuation difference. Moreover, fluctuation does not always have to be necessarily one sided.

4) Fall in circulation and readership-

Circulation and readership significantly influence ad-spend by our advertisers and our advertising rates. Circulationand readership are dependant on the quality of our newspapers, the reach of our newspapers and the loyalty ofour readers to our newspapers. Any failure by us to meet our readers’ preferences and quality standards couldadversely affect our circulation and readership over time.

36


Circulation in the Indian market is also affected by price and, therefore, the circulation of our newspapers may beadversely effected, if we fail to meet any price competition.

Therefore, a decline in the circulation or readership of our newspapers editions for any reason could adverselyaffect our business, results of operations and financial condition.


We have an experienced editorial team providing the editorial contents which are widely acknowledged astrustworthy. Our vast network of reporters coupled with news service agencies enables us to provide our readersin depth news of events and happenings across the world. We also regularly invest in improving the quality ofproduct and our infrastructure deep down village level ensures timely reach. “Dainik Jagran”, being 62 years oldbrand, commands loyalty of readers, which we believe does not change so easily especially when the Companyis committed to provide them the best of the product at affordable prices.

There is no denying to the fact that the Indian readers are price sensitive. Our strategy to launch low priced secondbrand newspaper in our areas of strength will create barriers to entry for any potential competitors, who areexpected to indulge more in price competition at the time of entry than those who are established in the market.Inspite of above, if there is price competition, the Company’s financial health permits to meet the competitionsuccessfully as hitherto.

5) Dependence of business on senior management team-

We have a team of professionals to oversee the operations and growth of our businesses. Our success issubstantially dependent on the expertise and services of our management team. The loss of the services of suchmanagement personnel or key personnel could have an adverse effect on our business and results of operations.Further, our ability to maintain our leadership position in the print media business depends on our ability to attract,train, motivate and retain highly skilled personnel.


The Company has a team of professional managers commensurate with its size of operations, with dependenceon no single person. In editorial, the Managing Editor is assisted by the Editor, Resident Editors and a team ofeditorial staff. Similarly, we have second line management in all our departments. Training is imparted andopportunities are provided on continuous basis to the younger members of the team to takeover from seniors.Further, JPL enjoying a leader’s position in its segment of the industry, does not have threat of losing key personnel,which is evident from the fact that we have not had any significant turnover at senior management level.

6) Exchange rate fluctuation-

As a large media Company, we are exposed to exchange rate risk. Imported newsprint, which accounted for 38.85% of our total newsprint costs in the year 2006 and 56.89% in 2005, is priced in US dollars and some of our capitalexpenditure for machines too are priced in foreign currency. In addition, we also have unhedged foreign currencyloan of US$ 4.5 millions. Accordingly, adverse movements in foreign exchange rates may adversely affect ourresults of operations.


Our dependence on imported newsprint has reduced owing to the reasons discussed else where in the report.We also do not have much of imports of capital goods due to availability of good quality plant and machinery inIndia. During the year under report, we had import of capital goods worth only Rs. 3.66 crores and in the previousyear the amount was only Rs. 0.91 crores. Further, these are one time expenditure, which is not likely to affect usmaterially. The foreign currency loan has long gestation period during which the currency can move both ways.However, we monitor the fluctuation closely. If at any point of time adverse fluctuation is expected to be higher thanhedging cost, we would hedge the loan immediately.

7) The Company’s substantial investments in various mutual fund schemes and other investment instrumentsare subject to market risk.


To minimize the risk, the Company invests predominantly in debt based mutual funds of reputed fund houses. TheCompany also manages the duration of the investment actively to mitigate the interest rate movements. TheCompany’s investment policy addresses the issue of concentration of investments with any single fund house.

8) Our foray into Out of Home Advertising:

Presently, the Company is taking hoardings, kiosks, unipoles and similar properties on short/medium termlease/sublease ranging from 1 year to 5 years and is committing itself to agreed lease rentals generally payableevery month in advance on the expectations that the Company would be able to use these properties for displaying

37


the advertisement of its clients and earn revenue. Most of these contracts are not cancellable before the expiry. Inthe event of our inability to attract the customers, we may suffer loss. In addition, we also plan to purchase and usevans for mobile advertising, which might not succeed, in which case it could adversely effect our results ofoperations and financial conditions.


We have taken one of the most experienced professional, Mr. Indrajit Sen in the business to head this activity of theCompany. He was President Primesite, an arm of Mudra Communications. He is assisted by an experiencedteam of people. This outfit of the Company known as Jagran Engage has a pan India presence and is carrying onits activities all over the country. We are cautiously exposing ourselves to the financial commitments and closelymonitoring the performance. We expect turnover of Rs. 33 crores during the current year.

9) Our investments in associate companies-

An amount of Rs. 17.10 crores, besides an amount of Rs. 10.50 lacs invested in equity, has been given to them asloan. We might also fund their future requirements including cash losses. Both these companies viz. JagranPublications Private Limited and Jagran Prakashan (MPC) Private Limited, in which we hold 50% voting rights, arecurrently incurring cash losses. If these companies do not start making profit in due course of time as expected,our investments and loan might become irrecoverable, adversely impacting our financial condition.

Further, Articles of Association of these companies restrict the transferability of the shares in such a manner thatwe can not transfer our shares without the consent of other group of shareholders.


Before association with these companies, we did not have our presence in important state of Madhya Pradesh,which is considered strategic and has lot of potential for growth. Decision of acquisition of stake and funding tothese companies is based on appraisal of their business plans. We believe that both these companies, whichhave already achieved significant circulation numbers beyond our expectations in a short period of time of abouta year since our association, would become profitable in a span of 4-5 years, which is a normal gestation periodin this industry.

10) Economic slowdown:

India’s GDP has been growing at 7 to 8 percent for sometime. Any slowdown in economy and consequent adverseimpact on advertisement budget of the advertisers as well as disposable income could adversely affect ouradvertising income, which in turn could adversely affect our results of operations.


Like some of our competitors, our business model is not so heavily dependant on advertisement revenue as toresult in operating losses in the event of some degree of economic slow down. It does not envisage more than75% contribution of advertisement revenue (including revenue from out of home advertising) in next 5 years. Weare able to recover substantial part of newsprint cost through the cover prices. We also believe that the economicslow down does not impact local market as much as it impacts national market as local market is also driven bydaily consumption requirements. Our increased focus on local market and rapid expansion of its size will mitigatethe impact of economic slow down.

Internal control systems and their adequacy

We have put in place requisite internal control system in all areas of operation. These systems have stood the testof time and ensure that the activities are carried on efficiently. The role and responsibility of all managerialpositions are defined, monitored and controlled regularly. All the transactions are authorized, timely recorded andreported truly and fairly.

In order to ensure adherence to the laid down systems, so far we have relied upon the process of internalreporting, monitoring and random checks by our own employees. However, we have initiated the steps to introducethe formal Audit System commensurate with the size and nature of business and have appointed CharteredAccountant firms in the Board meeting held on 29th July 2006.

Segment performance

The Company is engaged in printing and publishing newspaper and magazines in India, although it has takeninitiatives in expanding out of home advertising and event management activities during the year. The Companyalso has Short Code Service (7272) for mobile phone users to receive various types of information ( e.g., News,in both Hindi and English ) and access various types of services ( e.g., down loading ring tones) by SMS ( ShortMessage Service ) and voice using IVR ( Inter Active Voice Recognition) and/or ASR ( Automatic Speech Recognition),apart from doing job printing for others. However, for the fiscal under report, printing and publication of newspaper

38


Dainik Jagran has continued to be the only reportable segment in terms of Accounting Standard 17 issued by theInstitute of Chartered Accountants of India as it had contribution of approximately 97% in total revenue of theCompany.

Financial performance

Revenue break-up ( Rs in Crores )

2005-06 %age 2004-05 %age

Sale and other Operating Income 478.16 98.89 376.37 99.71

Other Income 5.37 1.11 1.10 0.29

Total Income

(Includes increase / (decrease) in stocks,which is insignificant) 483.53 100 377.47 100

Sales and other operating income

It comprises of newspaper sale, advertisement revenue, job charges, magazine/supplement sale, scrap andwaste paper sale, revenue from SMS Service and revenue from outdoor and event management activities. It hada growth of 27.05% over the previous year, which was contributed by increases in all revenue streams. Mostsignificant growth achieved was in advertisement revenue, which grew from Rs. 233.01 crores to Rs. 306.47crores, registering an increase of 31.52%, which is significantly higher than the Industry’s overall growth rate ofabout 15% in the calendar year 2005. This growth in advertisement revenue is attributed to increased focus onlocal markets and also an increase of about 75% in colour advertisement space over the previous year. Newspapersale increased from Rs. 137.04 crores to Rs. 160.37 crores, an increase of over 17%. The increase in newspapersale was a result of improved per copy realization as well as increase in Net Paid Sales of all ABC certifiededitions of ‘Dainik Jagran’ published by the Company. It increased by about 13.13% from July-December 2004 toJuly-December 2005. Revenue from SMS Service, which was started during the end of the previous year and thuswas for the full year and was Rs. 1.37 crores as against 0.08 crores in the previous year.

Further, the thrust on outdoor and event management activities in the middle of the year provided a significantgrowth in revenue from these activities, which increased from Rs. 1.06 crores to Rs. 2.82 crores.

Expenditure Analysis

(Rs. in Crores)

2005-06 Percentage 2004-05 Percentage(In relation to (In relation toTotal Income Total Income

Materials consumed 240.15 49.67 217.30 57.56

Employees Cost 56.69 11.72 44.98 11.92

Other manufacturing expenses 40.60 8.40 33.58 8.90

Selling , Administrative and other Expenses 69.58 14.39 54.68 14.49

Profit Before Interest, Depreciation,Extraordinary Items, Prior Period Adjustmentand Taxes 76.50 15.82 26.93 7.13

Interest 7.61 1.57 6.87 1.82

Depreciation 20.12 4.16 17.57 4.65

Extra Ordinary Items /Prior Period Adjustment 3.00 0.62 0.50 0.13

Profit Before Tax 45.77 9.47 1.99 0.53

Taxation 14.07 2.91 0.76 0.20

Profit After Tax 31.70 6.56 1.23 0.33

Materials consumed

It comprises of cost of newsprint and art paper (used for magazine), ink and stores which includes printing plates,chemicals, films etc. The newsprint alone constituted 86.75% of the total material consumed in the year 2005-06 asagainst 87.67% in the pervious year. In spite of sharp increase in newsprint prices witnessed by the Industry, we wereable to contain the cost of newsprint consumed mainly due to optimization of mix of imported and indigenous newsprintconsumption. Out of the total value of consumption of newsprint, imported newsprint accounted for 38.85% as against56.89% in the previous year. The reduction in imported newsprint consumption was possible owing to availability ofbetter quality of indigenous newsprint in required quantities in India as well as judicious reduction in consumption in

39


a manner that does not matter to the reader.

Employees cost

Employees cost increased by 26.03% compared with the previous year mainly due to annual increments and increasein the strength due to launch of new Editions viz: Muzaffarpur, Jammu and Dharamshala. This cost would have been stillhigher, had the Company not taken steps to rationalise the employees’ strength.

Other manufacturing expenses

Other manufacturing expenses represent printing and service charges paid to third party for printing magazine, newsservice, news collection and contribution (articles written by third party), power and fuel, insurance , inward freight andcartage on items other than newsprint and repairs and maintenance of plant and machinery, building and others. But forthe increase due to three new launches and increase caused by the increase in prices of petrol and diesel, othermanufacturing expenses would have been still lower as compared to previous year in relation to the total revenue of theCompany.

Selling Administrative and other expenses

These expenses primarily include outward freight and forwarding charges, advertising cost, brand promotion cost,telephone charges (including lease- line charges), traveling expenses, website maintenance, rent, Auditors’ fees,donations, bank and other finance charges and bad debts written-off.

As compared to previous year, these expenses have registered an increase of 27.25. Main reasons for this increase arelaunch of three new editions, increase in prices of petrol and diesel and writing–off all debts older than 3 yearsfollowing the conservative policy, besides the normal increases owing to inflation.

Other Income comprises of mainly interest earned, which increased from Rs. 0.53 crores to Rs. 4.46 crores due todeployment of IPO proceeds.

There was increase in interest expense mainly because interest on loans of Rs. 35 crores raised in the middle of theprevious year was for whole of the year under report whereas it was only for part of the year in the previous year.

Depreciation expense was higher due to additions in gross block of fixed assets as well as providing for additionaldepreciation in respect of earlier years for the reasons as detailed in note no. 5 of schedule 22 of the Accounts.

Taxation was higher due to increase in profits.

Extra Ordinary Items / Prior Period Adjustment includes an amount of Rs. 3 crores paid to the advisors in connectionwith FDI received by the Company during the year from INMIL, Ireland .

Profit after tax increased as a result of foregoing factors.

Share Capital

The Company’s Share Capital consists of only Equity Shares of Rs. 10 each. During the year under review, the paid -upcapital increased from Rs. 10 crores to Rs. 50.19 cores representing value of 50195097 Equity Shares of Rs. 10/- eachdue to FDI by INMIL, IPO and bonus issue. Number of shares allotted to INMIL was 2355716, 10039020 shares wereissued under IPO and 27800361 shares were issued as bonus shares in the ratio of 2.25 new bonus shares for everyequity share held on 18.11.2005.

Reserves and surplus

During the year under review, Securities premium received @ 456.93 per share from INMIL was utilized to the extent ofRs. 27.80 crores to issue 27800361 bonus shares of Rs. 10/- each and an amount of Rs. 21.99 crores was utilized outof Securities Premium received @ Rs. 310 per share on IPO to meet the IPO expenses.

Further, transfer of Rs. 3.50 crores to General Reserve and transfer of Rs. 2.50 crores to debenture redemption reservewas from Profit and Loss Account in compliance with statutory requirements.

The entire remaining Reserves and Surplus as reflected in the Audited Accounts represents either realized profit orpremium received on issue of Shares.

Loans

Unsecured loans were fully repaid during the year. Secured loans represent the loans raised from Indian as well asInternational banks.

It includes an ECB loan of Rs. 20.18 crores, the repayment of which is not hedged in view of long gestation period. Theexchange fluctuation on the said loan is accounted for in accordance with the accounting policy as disclosed inSchedule 22. Secured loans also include debentures of Rs. 15 crores privately placed with Bank of Baroda and listedin Wholesale Debt Market (WDM) of NSE.

The rate of interest on debentures is fixed whereas interest on other loans including working capital facilities is linkedto PLR of respective banks in case of loans in Indian currency and linked to LIBOR in case of ECB.

Deferred Tax Liability has been accounted for in accordance with Accounting Standard 22 issued by the Institute of

40


Chartered Accountants of India. (Please refer to note no. 17 of Schedule 22 annexed to the Accounts for details)

Fixed Assets

Capital expenses were mainly incurred on modernization / up-gradation of the existing facilities and for establishing 3new printing facilities at Muzaffarpur, Jammu and Dharamshala. ( Please refer to Schedule 6 of Audited Accounts fordetails) .

Capital work in progress which is part of Fixed Assets mainly include advances for capital goods which have been givento the suppliers for supplying the equipments/plants needed to increase the existing colour capacities. The total valueof orders for supply of equipments and plant pending for execution as at 31st March 2006 was Rs. 53.54 crores

Investment of Rs. 178 crores represents investments made partly out of unutilized IPO proceeds and partly out ofsurplus generated from business. Part of bank balances which is in form of FDRs of Rs. 156.46 crores too is in natureof investment made out of remaining part of unutilised IPO and FDI proceeds, which as per plan are to be utilized partlyin the current year and partly in the next year.

Sundry debtors

The debtors turnover (days) was 76 days in 2005-06 as against 75 days in 2004-05, indicating no significant increase.

Inventories were lower inspite of increase in turn over by 27.05% from the previous year.

Other current assets have increased from the previous year due to higher accrued interest on FDRs.

Loans and Advances

It includes security deposits of Rs. 576.75 lacs given to the Promoters, Directors , their relatives and HUFs and also agroup Company in respect of premises taken from them on short term lease in terms of rent agreement with them.These security deposits were given to them in the previous year and are interest free.

It also includes an amount of Rs. 1710.89 lacs given to the Associate Companies in which the Company has the shareholding, having 50% voting rights. Loan to these Companies is on interest of 12% per annum.

During the year when the Company was private limited, certain loans and deposits were given to/taken from some ofthe parties covered in the register maintained under Section 301 of the Companies Act, 1956. The loans given wereinterest bearing whereas the loans taken were without interest. In addition to these loans and deposits, there werecertain debit & credit balances in current accounts of some other such parties during the year, which were not interestbearing.

All these loans and deposits (except those given to Associate Companies’) and debit and credit balances in currentaccounts have been fully paid or recovered during the year.

Current liabilities

Current liabilities mainly represent the liability for unpaid expenses, security deposits from Newspaper Agents andstatutory liabilities such as deduction of Provident Fund from the employees and TDS. The Company has always beenregular in depositing statutory dues as well as paying its liabilities on due dates.

Provisions were higher in the previous year mainly because of proposed dividend of Rs. 10 crores and dividend tax ofRs. 1.40 crores relating thereto.

Cash flow statement

The summary of cash flows is as follows: -

1 - Surplus generated from operations Rs. 43.42 crores

2 - Generation from financial activities Rs. 363.87 crores

(A) Total Rs. 407.29 crores

Less : Cash spent on investing activities

(B) Total Rs. 244.00 crores

(C) Net increase in cash and cash equivalent (A-B) Rs. 163.29 crores

(D) Add: opening cash and cash equivalent Rs. 11.27 crores

(E) Cash and cash equivalent at the end (C+D) Rs. 174.56 crores

For details, please refer to cash flow statement attached to the Audited Accounts.

Material development in Human Resources:

Our people are our key Assets. We have been able to create a work environment that encourages pro-activenessand responsibility. The Company employed 3019 people as on March 31st 2006. The relationship with theemployees has been harmonious during the year the Company did not have any work loss.

41


COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCETo

The Members of


1. We have examined the compliance of conditions of Corporate Governance by Jagran Prakashan Limited for therelevant applicable period in the year ended on 31-03-2006, as stipulated in Clause 49 of the Listing Agreementof the said company with Stock Exchange(s).

2. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationwas limited to procedures and implementations thereof, adopted by the company for ensuring the compliance ofthe conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the company.

3. In our opinion and to the best of our information and according to the explanations given to us, we certify that thecompany has complied with the conditions of Corporate Governance as stipulated in the above mentioned ListingAgreement.

4. We state that based on the Report given by the Registrars of the Company to the Shareholders/ Investors GrievanceCommittee as on 31st March, 2006, no investor grievances matters are pending/unattended exceeding onemonth.

5. We further state that such compliance is neither an assurance as to the future viability of the company nor theefficiency of the effectiveness with which the management has conducted the affairs of the company.

For Adesh Tandon & Associates

Company Secretaries

(Adesh Tandon)

Proprietor

CP No.- 1121

Place : Kanpur

Dated : July 29, 2006

42


AUDITORS’ REPORT TO THE MEMBERS OF JAGRAN PRAKASHAN LIMITED

1. We have audited the attached Balance Sheet of M/s. JAGRAN PRAKASHAN LIMITED, as at 31st March, 2006 andthe Profit and Loss Account and Cash Flow Statement for the year ended on that date, annexed thereto. Thesefinancial statements are the responsibility of the Company’s Management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant 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 Companies (Auditor’s Report) Order 2003, issued by the Central Government of India in terms ofSection 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to above, we report that:

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appearsfrom our examination of such books.

(c) The Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report are inagreement with the books of account.

(d) In our opinion, the Profit and Loss Account and Balance Sheet and Cash Flow Statement dealt with by thisreport comply with the accounting standards referred to in Sub Sec. (3C) of Sec.211 of the Companies Act.1956, except to the extent reported in sub paragraph (f) below.

(e) On the basis of written representations received from Directors, as on 31st March, 2006, and taken on recordby the Board of Directors, none of the Directors is disqualified as on 31st March, 2006 from being appointedas a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

(f) Subject to Note No. 5 regarding change in certain accounting polices, which has resulted in reduction inprofit and fixed assets respectively by Rs. 167.05 lacs and Rs. 137.96 lacs and increase in provisions byRs. 29.09 lacs and Note No. 7 regarding non amortization of title considering its useful life as infinite andalso read with other accounting policies and notes thereon, in our opinion and to the best of information andaccording to the explanations given to us, the said accounts, give the information required by the CompaniesAct, 1956 in the manner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India;

i) In the case of Balance Sheet, of the State of Affairs of the Company as at 31st March, 2006 and

ii) In the case of Profit and Loss Account, of the Profit for the year ended on that date.

iii) In the case of Cash Flow Statement, of the cash flow for the year ended on that date.

For J. N. SHARMA & CO.

CHARTERED ACCOUNTANTS

Place : Kanpur (A.K. VERMA)

Dated : July 29, 2006 PARTNER.

(Membership no. 075755)

43


ANNEXURE TO THE AUDITORS’ REPORT( Referred to in paragraph 3 of our report of even date )

(i ) (a) The Company is in the process of preparing fixed assets register showing full particulars including quantitativedetails and situation of fixed assets, which is in the advanced stage of completion.

(b) As explained to us, physical verification of a major portion of fixed assets as at March 31, 2006 was conductedby the management during the year. In our opinion, the frequency of physical verification is reasonable. Nomaterial discrepancies were noticed on such verification.

(c) During the year the Company has not disposed off major part of fixed assets which would have affected thegoing concern status of the Company.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequencyof verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physicalverification of stocks followed by the Management are reasonable and adequate in relation to the size of theCompany and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company is maintainingproper records of inventory. The discrepancies noticed on verification between the physical stocks and thebook records were not material having regard to the size of the operations of the Company.

(iii) (a) In our opinion and according to the information and explanations given to us, the company has grantedinterest bearing unsecured loans to three companies including two associate companies covered in theregister maintained under section 301of the Companies Act 1956. The maximum amount of loan grantedduring the year was Rs.854.93 lacs and the loans were repaid during the year, except in the case of associateCompanies which have ceased to be companies covered in the register maintained under section 301 of theCompanies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the company has grantedinterest free unsecured loans to four companies and one firm covered in register maintained under section301 of the Companies Act, 1956. The maximum amount of loans granted during the year was Rs.317.60 lacsand the loans were repaid during the year.

(c) In our opinion and according to information and explanations given to us, the company has taken unsecuredinterest free loan from two companies covered in the register maintained under section 301 of the CompaniesAct, 1956. The maximum amount of loan taken during the year was Rs.186.97 lacs and the loans wererepaid during the year.

(d) In our opinion, other than interest free loans, the rate of interest and other terms and conditions on whichloans have been taken/granted to such parties are not prima facie prejudicial to the interests of the company.

(e) No terms and conditions for repayment of the loans are stipulated.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internalcontrol procedures commensurate with the size of the Company and the nature of its business with regardto purchases of inventory, fixed assets and with regard to the sale of goods. Further on the basis of ourexamination and according to the information and explanations given to us, we have neither come acrossnor have we been informed of any instance of major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts orarrangements referred to in section 301 of the Companies Act, 1956 have been entered in the registerrequired to be maintained under that Section.

(b) According to the information and explanations given to us, the transaction made in pursuance of suchcontracts or arrangements and exceeding the value of Rupees five lacs in respect of any party during the yearare of special nature and suitable alternative sources do not exist for obtaining comparable quotations.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepteddeposits from the public during the period covered by our audit report.

(vii) The Company does not have formal internal audit system, in view of the internal checks and other controls existingin the Company. However, the management has initiated steps to put in place a formal system of audit andengage an independent Chartered Accountants firms for the purpose.

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(viii) To the best of our knowledge and according to the information given to us, the Central Government has notprescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any product ofthe Company.

(ix) (a) According to the information and explanations given to us, the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues including provident fund, investor education andprotection fund, employees’ state insurance, income tax, sales tax, wealth tax, custom duty, excise duty,cess, service tax and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect ofincome tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at March 31, 2006for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of sale tax, income tax, customsduty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

(x) The company does not have accumulated losses. The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted inrepayment of dues to any financial institution, bank or debenture holder.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances onthe basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions ofclause 4 (xii) of the Companies ( Auditor’s Report) Order, 2003 are not applicable to the Company.

(xiii) In our opinion, the Company is not chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions ofclause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in ortrading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of theCompanies (Auditor’s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion and according to information given to us, the company has not given any guarantee for the loantaken by others from banks or financial institutions during the year. Therefore, the provisions of clause 4 (xv) of theCompanies (Auditor’s Report) Order 2003 is not applicable

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied forthe purpose for which they were raised

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet ofthe Company, we report that no funds raised on short- term basis have been used for long term investments.

(xviii)According to the information and explanations given to us during the period under audit the Company has notmade any preferential allotment of shares to parties and companies covered in the register maintained underSection 301 of the Companies Act, 1956.

(xix) In our opinion and according to the information and explanations given to us, the Company had issued 150secured debentures of Rs.10,00,000.00 each during the previous year covered by our report. The Company hadcreated security/charge in respect of debentures issued.

(xx) We have verified the end use of money raised by public issues as disclosed in notes to the financial statements.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit.

For J. N. SHARMA & CO.

CHARTERED ACCOUNTANTS

Place : Kanpur (A.K. VERMA)

Dated : July 29, 2006 PARTNER.

(Membership no. 075755)

45


BALANCE SHEET AS AT 31ST MARCH, 2006SCHEDULE AS AT AS AT

NO. 31.03.2006 31.03.2005AMOUNT(Rs.) AMOUNT(Rs.)

1 SOURCES OF FUNDS:i Shareholders’ Funds:

a. Capital 1 501,950,970 100,000,000b. Reserves and Surplus 2 4,365,360,177 586,690,048

ii Loan Funds:a. Secured Loans 3 1,162,441,524 1,075,191,715b. Unsecured Loans 4 - 223,117,750

iii Deferred Credits 5 2,472,791 5,324,861iv Deferred tax Liability 368,200,000 284,000,000

———————— ————————TOTAL :- 6,400,425,462 2,274,324,374

———————— ————————2 APPLICATION OF FUNDS:

i Fixed Assets 6a. Gross Block 2,391,898,127 1,895,538,019b. Less : Depreciation 1,034,407,877 833,201,685

———————— ————————c. Net Block 1,357,490,250 1,062,336,334d. Capital Work in Progress 240,532,561 192,684,187

———————— ————————1,598,022,811 1,255,020,521

———————— ————————ii Investment 7 1,779,979,847 6,555,897iii Current Assets, Loans and Advances:

a. Inventories 8 245,806,609 367,712,044b. Sundry Debtors 9 999,385,724 770,314,296c. Cash and Bank Balances 10 1,745,590,335 112,734,627d. Other Current Assets 11 20,443,094 461,727e. Loans and Advances 12 327,855,128 159,376,645

———————— ————————3,339,080,890 1,410,599,339

———————— ————————Less:Current Liabilities and Provisions:

a. Current Liabilities 13 296,696,189 265,300,067b. Provisions 21,561,897 132,551,316

———————— ————————318,258,086 397,851,383

———————— ————————Net Current Assets 3,020,822,804 1,012,747,956Miscellaneous Expenditure(To the extent not written off or adjusted) 1,600,000 -

———————— ————————TOTAL :- 6,400,425,462 2,274,324,374

Significant Accounting Policies andNotes to Accounts 22

As per our separate Report of even date attached For and on Behalf of the BoardFor J. N. SHARMA & CO.Chartered Accountants

A. K. Verma Mahendra Mohan Gupta Chairman & Managing DirectorPartner Sanjay Gupta Whole Time Director & Chief

Executive OfficerSunil Gupta Whole Time DirectorShailesh Gupta Whole Time DirectorAnuj PuriBharatji AgrawalNaresh Mohan DirectorsVijay TandonDevendra Mohan GuptaEamonn O’ Kennedy

PLACE : Kanpur R.K. Agarwal Chief Financial OfficerDATED : July 29, 2006 Amit Jaiswal Company Secretary

}

46


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2006SCHEDULE AS AT AS AT

NO. 31.03.2006 31.03.2005AMOUNT(Rs.) AMOUNT(Rs.)

INCOME:Sales and other operating Income 14 4,781,629,880 3,763,659,717Other Income 15 53,494,938 10,115,935Increase/(Decrease) in Stocks 16 193,198 944,079

��

4,835,318,016 3,774,719,731��

EXPENDITURE:Materials Consumed 17 2,401,547,782 2,172,962,744Payments to and Provisions for Employees 18 566,910,902 449,808,234Other Manufacturing Expenses 19 405,983,091 335,820,319Selling, Administrative and Other Expenses 19A 695,840,391 546,836,854

��

4,070,282,166 3,505,428,151��

PROFIT BEFORE INTEREST, DEPRECIATION,PRIOR PERIOD ADJUSTMENT, EXTRA ORDINARYITEMS AND TAXES 765,035,850 269,291,580Less : Interest 20 76,108,544 68,686,760

��

PROFIT BEFORE DEPRECIATION, PRIOR PERIOD ADJUSTMENT,EXTRA ORDINARY ITEMS AND TAXES 688,927,306 200,604,820Less : Depreciation 201,206,192 175,668,089

��

PROFIT BEFORE PRIOD PERIOD ADJUSTMENT,EXTRA ORDINARY ITEMS AND TAXES 487,721,114 24,936,731Less: Prior period adjustment and Extra ordinary items 21 30,000,000 5,025,748

��

PROFIT BEFORE TAXES 457,721,114 19,910,983Less : Taxation :Current Tax 43,099,811 1,507,710Fringe Benefit Tax 13,420,000 -Deferred Tax 84,200,000 140,719,811 6,100,000 7,607,710

��

NET PROFIT FOR THE YEAR 317,001,303 12,303,273Add: Balance of Profit brought forward 327,701,371 464,423,098

��

BALANCE AVAILABLE FOR APPROPRIATION 644,702,674 476,726,371APPROPRIATIONS:Transfer to Debenture Redemption Reserve 25,000,000 25,000,000Transfer to General Reserve 35,000,000 10,000,000Interim Dividend 200,780,385 -Proposed Final Dividend - 100,000,000Dividend Tax 28,159,449 288,939,834 14,025,000 149,025,000

��

BALANCE CARRIED TO BALANCE SHEET 355,762,840 327,701,371��

Significant Accounting Policies and 22Notes to AccountsAs per our separate Report of even date attached For and on Behalf of the BoardFor J. N. SHARMA & CO.Chartered Accountants



PLACE : Kanpur R.K. Agarwal Chief Financial Officer

DATED : July 29, 2006 Amit Jaiswal Company Secretary

}

47


CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH, 2006Particulars AMOUNT(Rs.) AMOUNT(Rs.)

2006 2005

A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit before tax,Prior Period Adjustment and Extra Ordinary Items 487,726,770 24,936,731

Add/(Less):

Depreciation 201,206,192 175,668,089

Interest Received (44,581,221) (5,331,965)

Amortisation of Preliminary Expenses 400,000 170,500

Interest Paid 76,108,544 68,686,760

Divedend Received (6,029,013) (2,400)

Prior Period Adjustments (5,656) (5,025,748)

Operating profit before working capital changes (1) 714,825,616 259,101,967

Add/(Less) for changes in Current Assets

Debtors (229,071,428) (37,227,078)

Loans and Advances (15,409,406) (20,408,542)

Inventories 121,905,435 (193,657,656)

Add/(Less) for change in Current Liabilities & Provisions

Current Liabilities and Provisions (101,486,057) 190,949,564

(Increase)/Decrease in Net Current Assets (2) (224,061,456) (60,343,712)

Cash Generated from operations (1)-(2) 490,764,160 198,758,255

Less:Tax Paid* (56,519,811) (1,507,710)

��

Net Cash from operating Activities 434,244,349 197,250,545

��

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (547,483,356) (342,128,904)

Sale of Fixed Assets 3,274,874 1,056,064

Investment in Associated companies (153,069,077) (16,252,569)

Interest Received 44,581,221 5,331,965

Interest Receivable (19,981,367) (301,770)

Dividend Received 6,029,013 2,400

Investments in Shares and Other Funds (1,773,423,950) 485,506

��

Net Cash from Investing Activities (2,440,072,642) (351,807,308)

��

48


Particulars AMOUNT(Rs.) AMOUNT(Rs.)2006 2005

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Shares 123,947,360 -

Securities Premium Received on Issue of Shares 4,188,488,801 -

Payment of IPO Expenses (Net of Liabilities) (197,983,771) -

Proceeds from Long Term Borrowings - 773,865,434

Borrowings from Bank for Working Capital 198,713,379 -

Repayment of Long Term Borrowings (111,463,570) (552,662,434)

Repayment of Short Term Borrowings - (68,749,029)

Repayment of Unsecured Loans (223,117,750) -

Proceeds from Unsecured Loans - 180,050,000

Payment of Deferred Credits (2,852,070) -

Proceeds from Deferred Credits - 1,844,060

Payment of Advising fee for FDI (Extra-Ordinary item) (30,000,000) -

Interest Paid (76,108,544) (68,686,760)

Interim Dividend and Tax thereon (228,939,834) (114,025,000)

Payment of Preliminary Expenses (2,000,000) -

��

Net Cash from financing activities 3,638,684,001 151,636,271

��

D. NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 1,632,855,708 (2,920,492)

��

Cash and cash equivalents at the beginning of the year 1 12,734,627 115,655,119

Cash and cash equivalents at the end of the year 1,745,590,335 112,734,627

Note 1. Tax Paid Includes Income Tax and FBT

2. Cash and Cash equivalents include:

Cash in hand

Current Accounts with Scheduled Banks

Current Accounts with Non-Scheduled Banks

Remittance in Transit

Term Deposit with Scheduled Banks

Term Deposit with Non-Scheduled Banks

3. Figures in bracket represents deductionAs per our separate Report of even date attached For and on Behalf of the BoardFor J. N. SHARMA & CO.Chartered Accountants



PLACE : Kanpur R.K. Agarwal Chief Financial Officer

DATED : July 29, 2006 Amit Jaiswal Company Secretary

CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH, 2006 (Contd.)

}

49


AS AT AS AT31.03.2006 31.03.2005

AMOUNT(Rs.) AMOUNT(Rs.)SCHEDULE NO. 1CAPITALAUTHORISED5,50,00,000(1,50,00,000) Equity Shares of Rs.10/- each 550,000,000 150,000,000

��

ISSUED, SUBSCRIBED AND FULLY PAID-UP50195097(1,00,00,000) Equity Shares of Rs.10/- each 501,950,970 100,000,000Out of which 99,00,000 Shares were allotted by wayof Bonus Shares by capitalisation of profits in theyear 2000 and 27800361 shares by way of capitalisationof Securities Premium during the year ��

TOTAL :- 501,950,970 100,000,000��

SCHEDULE NO. 2.RESERVES AND SURPLUSCAPITAL RESERVEOpening Balance 50,673,251 48,894,023Add: Write-back of provision - 1,779,228

��

50,673,251 50,673,251Less:Transferred to General Reserve 50,673,251 - - 50,673,251

��

SECURITIES PREMIUMOpening Balance - -Addition during the period 4,188,488,801 -

��

4,188,488,801 -Less: Bonus Shares issued 278,003,610 - IPO Expenses 219,876,531 497,880,141 3,690,608,660 - -

��

DEBENTURE REDEMPTION RESERVEOpening Balance 25,000,000 -Add: Addition during the year 25,000,000 50,000,000 25,000,000 25,000,000

��

INVESTMENT ALLOWANCE (UTILIZED) RESERVEOpening Balance 27,680 27,680Less:Transferred to General Reserve 27,680 - - 27,680

��

GENERAL RESERVEOpening Balance 183,287,746 29,587,746Add: Title written back (Net of tax) - 143,700,000Add: Transferred from Profit and Loss Account 35,000,000 10,000,000Add: Transferred from Capital Reserve 50,673,251 -Add: Transferred from Investment Allowance Reserve 27,680 268,988,677 - 183,287,746

��

PROFIT AND LOSS ACCOUNTBalance as per Profit and Loss account 355,762,840 327,701,371

��

TOTAL :- 4,365,360,177 586,690,048

��

SCHEDULE FORMING PART OF THE BALANCE SHEET

50


AS AT AS AT31.03.2006 31.03.2005

AMOUNT(Rs.) AMOUNT(Rs.)SCHEDULE NO. 3

SECURED LOANS(A) DEBENTURES:-

7.25% Redeemable Cumulative Non ConvertibleDebentures 150,000,000 150,000,000

(B) WORKING CAPITAL FACILITIES:-i Cash-Credit 494,339,094 145,625,715ii Commercial Paper 100,000,000 250,000,000

(C) TERM LOANS:-From Banks 418,102,430 529,566,000

��

TOTAL :- 1,162,441,524 1,075,191,715��

NOTES:-1 Debentures have tenure of five years, redeemable in three yearly

instalments of 30%,30%,40% with Call/ Put option. The redemption hasto commence and/or Call/Putoption is exercisable after expiry of threeyears from the date of allotment i.e. 14.07.2004.

2 Debentures, Working Capital Facilities and Term Loans are secured byfirst charge ranking pari-passu between the Debenture Trustees, CentralBank of India, Bank of Baroda andCooperat ive Centrale Raif feisenBoernleen Bank, B. A.a) by way of Hypothecation of all movable assets including fixed assets,

stocks, book debts and other receivables both present and future.b) by way of equitable mortgage of company’s immovable properties,

both present and future.3 Term Loan includes Rupee Term Loan from BOB for Rs.2162.32 Lacs

(Previous year FCNR B LoanRs. 3316.56) and ECB Loan of Rs. 2018.70Lacs (Previous year Rs.1979.10 Lacs).

4 Working Capital facilities from Central Bank of India and Term Loan from Bankof Baroda are further secured by personal guarantees and equitable mortgageof some of the propertiesof some of the directors and their relatives.

5 Amount payable with in a year Rs.1922.90 Lacs (previous year Rs. 1250.00 Lacs)SCHEDULE NO. 4UNSECURED LOANSFrom Banks - 200,000,000(due within a year NIL, Previous Year Rs.2000.00 Lacs)From bodies corporate - 23,117,750

��

TOTAL :- - 223,117,750��

SCHEDULE NO. 5DEFERRED CREDITSFor Land 142,009 142,009(due within a year Rs.1.42 Lacs Previous Year Rs.1.42 Lacs)For Vehicles 1,968,229 3,616,251(Personally guaranteed by any one of the Directors andHypothecation of Relevant Vehicle)(due within a year Rs.13.94 Lacs Previous Year Rs.21Lacs)For Others Assets 362,553 1,566,601(due within a year Rs.3.62 Lacs Previous Year Rs.4.16 Lacs)

��

TOTAL :- 2,472,791 5,324,861

��


51

30

th A

nn

ua

l R

ep

ort

20

05

-20

06

SCHEDULE NO. 6.

FIXED ASSETSPARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

AS AT ADDITIONS SALES/ TOTAL UPTO FOR THE TOTAL AS AT AS AT01.04.2005 ADJUSTMENTS/ AS AT 31.03.2005 YEAR UPTO 31.03.2006 31.03.2005

WRITTEN OFF 31.03.2006 31.03.2006

TITLE 170,000,000 - 170,000,000 - - - 170,000,000 170,000,000

LAND (Freehold) 7,903,227 2,056,186 - 9,959,413 - - - 9,959,413 7,903,227

LAND (Leasehold) 26,647,086 1,589,941 - 28,237,027 - 2,904,450 2,904,450 25,332,577 26,647,086

BUILDINGS*+ 147,763,782 84,843,534 - 232,607,316 42,387,870 14,163,837 56,551,707 176,055,609 105,375,912

PLANT AND MACHINERY** 1,181,001,880 329,186,237 1,118,170 1,509,069,947 548,697,582 1,17,922,197 666,619,779 842,450,168 632,304,298

COMPUTERS 237,271,734 54,649,257 1,079,204 290,841,787 168,230,556 39,621,330 207,851,886 82,989,901 69,041,178

FURNITURE AND FIXTURE 30,667,273 9,847,400 - 40,514,673 13,623,964 15,186,128 28,810,092 11,704,581 17,043,309

VEHICLES 94,283,037 17,462,427 1,077,500 110,667,964 60,261,713 11,408,250 71,669,963 38,998,001 34,021,324

T O T A L :- 1,895,538,019 499,634,982 3,274,874 2,391,898,127 833,201,685 201,206,192 1,034,407,877 1,357,490,250 1,062,336,334

PREVIOUS YEAR 1,440,884,995 455,709,088 1,056,064 1,895,538,019 657,533,596 175,668,089 833,201,685 1,062,336,334 783,351,400

* Includes Leasehold Properties, value of which is not separately available.+ Includes buildings constructed in the rented premises/on plot of land taken on short term lease from the directors/their relatives and the properties belonging to Jagran Limited, whose running business was takeover by the Company on Lock, Stock and Barrel basis.** Includes exchange rate fluctuation in foreign currency.Subsidy received towards fixed assets has been deducted from additions during the year and depreciation thereon adjusted from depreciation for the year.Capital Work in Progress represents

Current year Previous yearBuilding 16,188,469 25,956,285Plant and Machinery 31,006,272 101,815,728Advance for Capital Goods 193,337,820 58,464,498Pre-operative Expenses - 6,447,676

��

240,532,561 192,684,187��


52


AS AT AS AT31.03.2006 31.03.2005

AMOUNT(Rs.) AMOUNT(Rs.)

SCHEDULE NO.7INVESTMENTS OTHER THAN TRADE UNLESSOTHERWISE STATED(AT COST)A ) Quoted

a) SHARES1,45,650 (1,45,650) Fully paid-up 1,623,300 1,623,300Equity Shares of Rs. 10/-each in Jagran Limited (Trade)(Market value: not available, Previous year not available)20,100 ( 20,100) Fullly paid-up 6,473,098 6,473,098Equity shares of Rs. 10/-each in The Bank of Rajasthan Ltd.(Market value: Rs.883000/-, Previous year Rs.1128615/-)20,000 ( 20,000) Fully paid-up 600,000 600,000Equity shares of Rs. 10/-each in CRB Corporation Ltd.(Market value: not available, Previous year not available)18,500 ( 18,500) Fully paid-up 185,000 185,000Equity shares of Rs. 10/- each of Mega Fin (India) Ltd.(Market value: not available, Previous year Rs.147260/-)1,100 ( 1,100)Equity shares of Rs. 10/- each of 59,499 59,499Bank of India, Fully Paid-up ‘(Market value: 146905/-,Previous year Rs.113850/-) ��

8,940,897 8,940,897Less : Provision for Permanent diminution in Investment 8,000,000 8,000,000

��

TOTAL :- 940,897 940,897��

b) UNITS OF MUTUAL FUNDLIC MF Liquid Fund (NAV Rs. 101793049.32,PreviousYear NIL) 101,535,197 -(9,290,484.299 units of Rs.10/- each)Reliance Liquid Fund (NAV Rs. 250000000,Previous Year NIL) 250,000,000 -(24,992.252.402 units of Rs. 10/- each)

��

TOTAL :- 351,535,197��

TOTAL (a+b):- 352,476,094 940,897��

B) Unquoteda) SHARES (TRADE):

1,00,000(1,00,000) Fully paid-up * 1,000,000 1,000,000Equity shares of Rs.10/- each in Jagran Publication Private Ltd.5000( NIL) Fully paid-up 50,000 -Equity Shares of Rs.10/- each in Jagran Prakashan (MPC) Private Limited150 (150)Fully Paid-up 15,000 15,000Equity Shares of Rs. 100/- each of U.N.I.95(NIL) Fully Paid-up 9,500 -Equity Shares of Rs. 100/- each of Press Trust of India Ltd.460000( 460000) Fully paid-up 4,600,000 4,600,000Equity Shares of Rs.10/- each in Jagran Infotech Ltd.

��

TOTAL :- 5,674,500 5,615,000

��


53


AS AT AS AT31.03.2006 31.03.2005

AMOUNT(Rs.) AMOUNT(Rs.)b) UNITS OF MUTUAL FUND

B815G Birla FTP-Series H- Growth 50,000,000 -(5,000,000 units of Rs. 10/-each)Chola Fixed Maturity Plan 200,000,000 -20,000,000 units of Rs. 10/-eachHDFC FMP 3 M March 06(1) Inst. Dividend 200,090,186 -(20,009,018.6 units of Rs. 10/- each)LIC FMP Series 5 Growth Plan 300,000,000 -(30,000,000 units of Rs. 10/-each)P145D Prudential ICICI FMP Monthly Plan-Dividend-XXVII 100,000,000 -(10,000,000 units of Rs. 10/-each)P146IG Prudential ICICI FMP Plan-Inst. Cum-XXVIII 100,000,000 -(10,000,000 units of Rs. 10/-each)P139YD Prudential ICICI FMP-Yearly Dividend-Series XXIV 100,359,000 -(10,035,873.095 units of Rs. 10/-each)UTI Fixed Maturity Plan-(Qtr. FMP) Growth Plan 50,082,986 -(5,008,298.596 units @ Rs.10/- each)G147 Standard Chartered Fixed Matuity 3rd Plan-Dividend 201,269,035 -(20,126,903.496 units of Rs. 10/-each)Principal Pnb Fixed Maturity Plan-91 Days-Series II 100,028,046 -(10,002,804.638 units of Rs 10/- each) ��

TOTAL :- 1,401,829,253 -��

TOTAL (a+b):- 1,407,503,753 5,615,000C ) OTHER INVESTMENTS

Inter Corporate Deposit 20,000,000 -��

TOTAL :- 20,000,000 -��

TOTAL(A+B+C):- 1,779,979,847 6,555,897��

* Represents 40% paid-up Capital of the company carrying 50% voting rights.NOTES :

1 Investments in Shares are long term in nature.2 Aggregate market value of Quoted Investment is Rs.3528.23 Lacs (Rs.13.90 Lacs) as against the aggregate

book value of Rs.3524.78 Lacs (Rs.13.35 Lacs) Market value and book value both excludes the investmentsin respect of which market value as stated above was not available. These Investment are fully provided for.

3 Current Investment bought and sold during the year :

Name No. of units Face value Purchasecost

Rs. In lacs Rs. In lacs

Prudential ICICI institutional liquid plan - Daily Dividend 25,000,000.000 2500.00 2500.00

Prudential ICICI floating rate plan C Daily Dividend 9,998,000.400 999.80 1000.00

Prudential ICICI sweep cash option Daily Dividend 10,032,655.268 1003.27 1003.27

Standard Chartered Liquidity manager Daily Dividend 19,998,000.200 1999.80 2000.00

HDFC cash management fund-call plan Daily Dividend 9,590,854.161 959.09 1000.00

UTI Money market fund Daily Dividend Plan 2,869,391.058 286.94 500.00

SBI magnum institutional Income savings Weekly Dividend 14,219,626.877 1421.96 1500.00

DSP Merrill Lynch liquidity fund institutional Daily Dividend 99,980.004 999.80 1000.00

PNB Principal cash management fund liquid option Prem. plan 9,999,300.049 999.93 1000.00


54


AS AT AS AT31.03.2006 31.03.2005


SCHEDULE NO. 8

INVENTORIES

(As taken valued and Certified by the

Management)

Stores 22,946,861 20,029,989

Raw Material 219,465,436 290,824,181

Raw Material in Transit 1,547,035 55,203,795

Finished Goods 1,847,277 1,654,079

��

TOTAL :- 245,806,609 367,712,044

��

SCHEDULE NO. 9

SUNDRY DEBTORS

Debts Exceeding Six Months :-

Considered Good 133,557,216 147,635,864

Considered Doubtful 48,719,369 29,329,134

��

182,276,585 176,964,998

Other Debts :-

Considered Good 865,828,508 622,678,432

��

1,048,105,093 799,643,430

Less : Provision for Bad and Doubtful Debts 48,719,369 29,329,134

��

999,385,724 770,314,296

��

Out of which,

Debts for which Company is fully Secured 84,353,327 75,871,020

Unsecured Debts 915,032,397 694,443,276

��

TOTAL :- 999,385,724 770,314,296

��

SCHEDULE NO.10

CASH AND BANK BALANCE

Cash on Hand 16,431,124 14,068,466

Balance with Scheduled Banks in:

Current Accounts 164,014,525 93,443,905

Fixed Deposits 1,564,591,958 5,055,256

With Others in:

Franking Machine with Post Office* 40,459 -

Remittance-in-Transit 512,269 167,000

��

TOTAL :- 1,745,590,335 112,734,627

��

* Maximum amount outstanding at any time during the Year Rs.0.54 Lacs(Previous Year Rs.NIL)


55


AS AT AS AT31.03.2006 31.03.2005

AMOUNT(Rs.) AMOUNT(Rs.)SCHEDULE NO. 11OTHER CURRENT ASSETSInterest Accrued on FDR 15,245,258 428,850Interest Receivable (Others) 5,197,836 32,877

��

TOTAL :- 20,443,094 461,727��

SCHEDULE NO. 12LOANS AND ADVANCESAdvances recoverable in cash or in kindor for value to be received (Unsecuredbut considered good unless otherwise stated) :Security Deposits+ 111,374,039 80,951,142Loans and Advances to Parties and Staff *Considered Good 192,218,031 56,739,902Considered Doubtful 655,209 691,250

��

192,873,240 5,7431,152Less : Provision for Bad and doubtful Advances 655,209 192,218,031 691,250 56,739,902

��

Prepaid Expenses 15,153,729 -Advance Income tax 53,705,280 23,281,552Less : Provision 44,595,951 9,109,329 1,595,951 21,685,601

��

TOTAL :- 327,855,128 159,376,645��

* Debts due from the companies in which the company has substaintialinterest Rs. 1710.89 Lacs (Previous year 169.30 Lacs)+ Includes amount of Rs.39.50 lacs (Previous year Rs.66.15 lacs)depositedwith the Directors for the premises taken on short term lease from them.Maximum amount due at any time during the year : Rs.66.15 lacs (Previousyear Rs.66.15 lacs)SCHEDULE NO. 13CURRENT LIABILITIES AND PROVISIONS(A) CURRENT LIABILITIES

Temporary Book Overdraft - 188,837Sundry Creditors 146,544,289 136,062,778Advance from Customers 766,382 387,594Interest Accrued but not due 832,257 6,740,608Other Liabilities 10,559,111 4,411,175Securities from Agents, Staff and others 137,994,150 117,509,075

��

296,696,189 265,300,067��

(B) PROVISIONSProvision for FBT 900,000 -Corporate Dividend Tax - 14,025,000Proposed Dividend - 100,000,000Provision for Earned Leave 20,661,897 18,526,316

��

21,561,897 132,551,316��

TOTAL :- 318,258,086 397,851,383��


56


AS AT AS AT31.03.2006 31.03.2005


SCHEDULE NO. 14

SALES AND OTHER OPERATING INCOME

Newspaper Sale 1,603,737,014 1,370,428,063

Advertisement Revenue 3,064,664,594 2,330,121,962

Job Charges 28,514,352 28,233,074

Magazine Sale 8,874,123 9,139,970

Scrap and Waste Paper Sale 27,099,309 9,477,654

Supplements Sale 6,750,490 4,874,845

Revenue from SMS Services 13,740,548 828,029

Revenue from Outdoor and Event Management activity 28,249,450 10,556,120

��

TOTAL :- 4,781,629,880 3,763,659,717

��

SCHEDULE NO. 15

OTHER INCOME

Bad Debts Recovered 1,312,848 1,682,516

Misc. Income 121,635 94,683

Dividend Received 6,029,013 2,400

Rent and Space Sharing Charges Received 1,414,180 267,670

Exchange Rate Fluctuation - 434,020

Interest* 44,581,221 5,331,965

Provision No Longer Required Written Back 36,041 2,302,681

��

TOTAL :- 53,494,938 10,115,935

��

* Interest :

On Bank FDRs (Gross) (TDS Rs.7141518, 34,188,931 406,274

Previous Year Rs. 20011/-)

On Income tax Refund - 3,738,839

Others (Gross) ( TDS Rs. 2097522/- 10,392,290 1,186,852

Previous Year Rs. 13540/-) ��

44,581,221 5,331,965

��

SCHEDULE NO. 16

INCREASE/(DECREASE) IN STOCK

Closing Stock 1,847,277 1,654,079

Less : Opening Stock 1,654,079 710,000

��

TOTAL :- 193,198 944,079

��

SCHEDULE FORMING PART OF THE PROFIT & LOSS ACCOUNT

57


AS AT AS AT31.03.2006 31.03.2005


SCHEDULE NO. 17

MATERIALS CONSUMED

Raw Material 2,238,541,858 2,037,626,674

Stores 1,63,005,924 135,232,510

Purchase of Finished Goods - 103,560

��

TOTAL :- 2,401,547,782 2,172,962,744

��

SCHEDULE NO. 18.

PAYMENTS TO AND PROVISIONS FOR

EMPLOYEES

Salary, Wages and Bonus etc. 497,286,908 394,024,237

Contribution to Employees Provident

and other Funds 45,528,188 37,215,757

Employees Welfare 18,723,563 15,277,036

Gratuity Including Contribution to Gratuity Fund 5,372,243 3,291,204

��

TOTAL :- 566,910,902 449,808,234

��

AS AT AS AT31.03.2006 31.03.2005


SCHEDULE NO. 19

OTHER MANUFACTURING EXPENSES

Repairs and Maintenance

Building 14,968,944 14,370,038

Plant and Machinery 58,693,835 58,288,572

Others 29,854,450 103,517,229 24,113,179 96,771,789

��

News Collection and Contribution Charges 160,031,182 123,415,108

Composing Printing and Binding Charges 10,053,836 9,312,232

Power and Fuel 97,001,873 77,830,602

Insurance Expenses 17,821,850 16,251,659

Freight and Cartage 17,557,121 12,238,929

��

TOTAL :- 405,983,091 335,820,319

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58


AS AT AS AT31.03.2006 31.03.2005


SCHEDULE NO. 19A

SELLING, ADMINISTRATIVE, AND OTHER EXPENSES

Payment to the Auditors 673,440 440,800

Rates and Taxes 1,665,895 1,324,702

Rent 34,219,137 30,287,355

Lease Rental 1,347,393 8,080,653

Newspaper Distribution Expenses 126,377,296 97,566,742

Travelling Expenses 32,151,276 30,594,440

Postage, Telegram and Telephone Expenses 58,888,770 56,579,235

Circulation,Brand and Advertisement Promotion Expenses 140,772,737 150,257,603

Publicity Expenses 101,825,943 78,038,330

Direct Expenses on Event Management and Outdoor Activities 14,574,340 4,622,874

Donation 5,116,872 301,430

Web-site Updation Charges 2,603,188 2,495,307

Bad Debts Written off 46,852,545 2,092,059

Provision for Bad and Doubtful Debts and Advances 18,480,709 342,607

Preliminary Expenses written-off 400,000 170,500

Loss of Partnership Firm - 201,886

Bank and Other Charges 18,035,117 11,649,729

Other Expenses 91,855,733 71,790,602

��

TOTAL :- 695,840,391 546,836,854

��

AS AT AS AT31.03.2006 31.03.2005


SCHEDULE NO. 20

INTEREST

Interest on Term Loan 35,133,480 32,038,281

Interest on Debendures 10,875,000 7,746,575

Interest Others 29,845,574 28,684,386

Interest on Deferred Credit 254,490 217,518

��

TOTAL :- 76,108,544 68,686,760

��

SCHEDULE NO. 21

PRIOR PERIOD ADJUSTMENT AND EXTRA ORDINARY ITEMS

Advisor Fee for Foreign Direct Investment 30,000,000 -

Prior Period Adjustment - 5,025,748

��

TOTAL :-30,000,000 5,025,748

��


59


SCHEDULE - 22 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTSFOR THE YEAR ENDED 31ST MARCH 2006

A. SIGNIFICANT ACCOUNTING POLICIES :-

1. The accounts are prepared using historical cost convention and on the basis of going concern, with revenuesrecognized and expenses accounted for on accrual basis. However, interest on Income Tax Refund and claimsowing to uncertainty with regard to determination of quantum are accounted for as and when received. (Also referto Policy No. 16 hereof)

2. Expenses under promotional Schemes are recognized and accounted for proportionate to the period of Schemes.

3. Fixed Assets are stated at Cost.

4. Inventories are valued at cost or net realisable value, whichever is lower. Cost of raw materials and stores isdetermined on first-in-first-out basis and cost of finished goods is determined on direct cost basis.

5. A General Provision @ 2.5% on outstanding debtors relating to advertising billing is made towards bad anddoubtful debts. Further, liability for the credits to be allowed to outstanding advertisement debtors on account ofrate difference etc. on realisation/settlement is also recognized in the accounts on the basis of best estimates bythe management.

6. a) Depreciation is provided according to WDV Method at the rates specified in Schedule XIV to the CompaniesAct. 1956.

b) Depreciation is provided on composite cost of Land and Building wherever cost of Land is not separatelyavailable. In these cases, the said composite cost is capitalised by debit to Building.

c) Title Dainik Jagran has an infinite life and therefore no part of its purchase value is amortized.

d) Value of properties on long term lease is equally amortized over period of lease.

7. In view of Gratuity Fund created with Life Insurance Corporation of India, no provision for Gratuity is made. Companyaccounts for Contribution in the said fund as an expense to the extent of demand received from L.I.C.

8. Prepaid and outstanding expenses are accounted for only in those cases, where amount involved in each individualcase exceeds Rs.10 Lakhs and Rs. 1000/- respectively.

9. Service charges/incentive payable on achieving targets are accounted for to the extent of claims received andsettled.

10. The Company has taken Key man Insurance Policies for some of its directors and Key Managerial Personnel andpays premium by debiting Profit and Loss Account. The surrender value of these policies is not accounted for asan asset.

11. Provision for un-encashed earned leave is determined on actuarial basis.

12. Service Charges, Rent, Electricity and other expenses of various Representative offices of the Company aredebited to Representative expenses, which are shown as part of News Collection Charges.

13. As per Industry’s practice, Newspaper sale and Advertisement charges are net of commission, discounts, returns,and service charges.

14. Investments are valued at Cost. However, provision for permanent diminution in value of long-term investmentsand provision for shortfall in market value as compared to book value in case of current Investments is recognisedand made in the accounts. Appreciation in value of these investments subsequent to recognition of diminution isnot recognized and accounted for till these investments are actually sold.

15. At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whetherthere is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverableamount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is thehigher of an asset‘s net selling price and value in use. In assessing value in use, the estimated future cash flowsexpected from the continuing use of the asset and from its disposal are discounted to their present value using apre-tax discount rate that reflects the current market assessments of time value of money and the risks specific tothe asset.

16. (i) Current tax comprises of Company’s tax liability for the current financial year as well as additional tax paid,if any, during the year in respect of earlier years on receipt of demand from the authorities. For computationof taxable income under the Income Tax Act, 1961, the method of accounting adopted and consistentlyfollowed by the Company year after year is cash.

(ii) Deferred tax liability is determined taking current tax rate and is provided on the “timing differences” between

60


taxable income and book income. The “timing differences”, as defined by Accounting Standard 22 issued bythe Institute of Chartered Accountants of India, are those, which are capable of reversal in future. Further, thisliability is shown net of deferred tax assets, which are recognised to the extent there is a reasonable certaintywith regard to their future realisation.

17. (i) Foreign Currency Monetary Items are valued using the conversion rate prevailing as at Balance Sheet date.The difference between the value at which these were initially recorded or reported in the previous financialstatements and the value determined using the closing rate is recognized as income or expense as the casemay be.

(ii) Conversion as at Balance Sheet date of Foreign Currency Non-Monetary Items, which are carried at historicalcost, is done using the closing rate and the difference between the historical cost and the value so arrived atis adjusted in the value of asset and the related liability.

(iii) Remaining Non-Monetary Items which are carried at fair value or other similar values are valued using theexchange rates when the values were determined.

18. Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects oftransactions of a non-cash nature. The cash flows from regular revenue generating, investing and financingactivities of the Company are segregated.

19. Earnings per share is disclosed based on (i) the profit before considering extraordinary/ exceptional items (net oftax) and (ii) the net profit after tax after considering such items. The number of shares used in computing basicearnings per share is the weighted average number of shares outstanding during the period. The number ofshares are adjusted for any stock splits and bonus shares issues effected prior to the approval of the financialstatements by the Board of Directors.

B. NOTES :-

1. Contingent Liabilities:

a) On account of Court Cases relating to defamation labour, etc. : Amount indeterminate

(Amount indeterminate)

b) Others : NIL

(NIL)

2. Estimated amount of contracts remaining to be executed on Capital Account not provided for: Rs. 4386.93 Lacs(Rs. 1740.07Lacs).

3. Title deeds of Leasehold Land at Agra of Rs.4.75 Lacs, Leasehold Land at Mohali of Rs.65.86 Lacs and a Flat atAhmedabad of Rs. 4.46 Lacs included in Building are yet to be executed.

4. Profit/Loss on sale of Fixed Assets has neither been determined nor accounted for in the cases where completedetails necessary for computation of profit/loss were not available. In such cases, entire sale proceeds have beencredited to gross block of Fixed Assets. The amount involved however is not material.

5. a) (i) In order to ensure strict Compliance with schedule XIV to the Companies Act, 1956, the Company hasstarted accounting for 100% depreciation on items upto Rs.5000.00 in the year of purchase itself. Also,the depreciation on all additions/sales made during the year is provided on pro-rata basis, as providedin above referred Schedule.

Had the Company not changed the depreciation policy as aforesaid, the profit for the year and the fixedassets both would have been lower by Rs.5.46 lacs.

(ii) Shortfall in depreciation of Rs.114.38 Lacs in respect of earlier years on items upto Rs.5000.00 hasalso been made good during the year by debit to current year depreciation.

b) From the current year, the company has started amortizing the value of lease hold land over the period oflease. Accordingly, an amount of Rs. 29.04 lacs has been amortized during the year in respect of the periodbeginning from the lease period to 31st March 2006 by debit to depreciation. Had the company not changedthis policy, profit for the year and the value of leasehold land would have been higher by Rs.29.04 lacs.

c) Upto the previous year, provision for un-encashed earned leave was determined on the assumption that allleaves accrued to the employees would be encashed by them at the existing wage rate. From the currentyear, the Company has started providing for these leaves on actuarial basis as a result of which the liabilityfor the current year and payments to and provisions for employees are lower by Rs.29.09 lacs.

61


6. Most of the personal account balances are unconfirmed.

7. Accounting Treatment of title “Dainik Jagran” being an intangible asset is governed by Accounting Standard 26issued by the Institute of Chartered Accountants of India which was made mandatory w.e.f. 1st April 2003. Themanagement is of the opinion that Title has an infinite useful life and therefore it does not require write off/amortisation.

8. Capital Reserve, being realised gain resulted from take over of running business of certain companies in the year2000, has been transferred to General Reserve during the current year.

9. There is no amount payable to SSI Units as on date of the Balance Sheet.

10. The Company is engaged primarily in printing and publication of Newspaper and Magazines in India. These in thecontext of the Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants ofIndia are considered to constitute one single reportable segment.

11. In terms of Accounting Standard 28 (AS-28), there was no impairment loss on the fixed assets during the yearunder report.

12. Advertisement debtors older than 3 years have been written-off.

13. The Company does not have any potentially dilutive equity share.

14. (A) CAPACITY, PRODUCTION, TURNOVER AND STOCK: -

(i) DESCRIPTION UNIT *LICENSED/INSTALLED CAPACITY

Newspaper Copies NA/ 1257000 Copies per Hour

(NA/ 1070000 Copies per Hour)

Magazine Copies NA/No separate installed capacity

(ii) ACTUAL PRODUCTION TURNOVER AMOUNT OPENING STOCK CLOSING STOCKAMOUNT AMOUNT

(No. .in lacs) (No. .in lacs) (Rs. in Lacs) (No. .in lacs) (Rs. in Lacs) (No. .in lacs) (Rs. in Lacs)

Newspaper 9000.38 8899.40 16037.37 - - - -

(8433.56) (8330.90) (13704.28) - - - -

Supplements 75.39 75.39 67.50 - - - -

(69.26) (69.26) (48.75) - - - -

Magazines 5.95 5.64 88.74 0.60 16.54 0.56 18.47

(5.23) (4.68) (90.28) (0.36) (7.10) (0.51) (10.66 )

Others - - - - - - -

(-) (-) (-) (-) (-) (0.09) (5.88 )

(iii) Finished Goods

OPENING STOCK PURCHASE TURNOVER CLOSING STOCK

(No. .in lacs) (Rs. in Lacs) (No. .in lacs) (Rs. in Lacs) (No. .in lacs) (Rs. in Lacs) (No. .in lacs) (Rs. in Lacs)

Magzines - - - - - - - -(-) (-) (0.02) (1.04) (0.02) (1.12) (-) (-)

NOTES :- a) *As Certified by the Management. The information being technical in nature could not be verified by theauditors.

b) Actual production of Newspaper and Magazines includes 100.98 Lacs (102.66 Lacs) copies and 0.35 Lacs(0.40 Lacs) copies respectively for free distribution, advertisement promotion and voucher files.

c) Turnover includes copies remaining unsold out of total supplies to the agents.

62


(B) RAW MATERIAL CONSUMED: -

CURRENT YEAR PREVIOUS YEAR

QUANTITY AMOUNT QUANTITY AMOUNT

(Rs. In Lacs) (Rs. In Lacs)

Newsprint & White Printing Paper 83851 MT 20833.88 78584 MT 19050.19

Art Paper 307983 Sheets 19.20 268172 Sheets 18.07

Ink - 1532.34 - 1308.00

TOTAL: - 22385.42 20376.26

(C) BREAKUP OF IMPORTED & INDIGENOUS RAW MATERIAL & STORES CONSUMED:-


AMOUNT (Rs. in Lacs) % of Consumption AMOUNT (Rs. in Lacs) % of Consumption

RAW MATERIALS

Imported 8696.73 38.85 11591.89 56.89

Indigenous 13688.69 61.15 8784.37 43.11

TOTAL: - 22385.42 100.00 20376.26 100.00

STORES & SPARES *

Imported 9.00 0.55 0.00 0.00

Indigenous 1621.06 99.45 1352.33 100.00

TOTAL: - 1630.06 100.00 1352.33 100.00

* does not include Spares, which are debited to Repairs to Machinery.(Amount not determined)

(D) VALUE OF IMPORT ON C.I.F. BASIS (Rs. in Lacs):-


Raw Material 7422.71 12804.51

Stores & Spares 80.61 64.43

Capital Goods 366.07 91.67

(E) EXPENDITURE IN FOREIGN CURRENCY (Rs. in Lacs):-


Travelling Expenses 39.20 68.58

Interest on Term Loan 265.09 174.81

Others 1.73 1.70

15. MANAGERIAL REMUNERATION : (Rs. in Lacs)


(i) Salary 140.04 187.60

(ii) Contribution to Provident Fund 9.23 13.63

(iii) Perquisites 32.66 33.77

181.93 235.00

The amount relating to Directors out of contribution in Gratuity Fund with LIC is not separately available and hencenot considered.

63


16. AUDITORS‘ REMUNERATION : (Rs. in Lacs)


(i) Statutory Audit 4.49 3.91

(ii) Tax Audit 0.56 0.50

(iii) Other Services 1.68 -

(iv) Reimbursement of Expenses 2.40 0.73

9.13 5.14

17. THE NET DEFERRED TAX COMPRISES OF FOLLOWING COMPONENTS

Deferred Tax Liabilities As at Current As at31-03-2006 year 31-03-2005

(Rs. in Lacs) Changes (Rs. in Lacs)

Difference between book and tax depreciation 759 10 749

Difference between book income and tax income due todifferent methods of accounting (Net) 3116 886 2230

��

3875 896 2979��

Deferred Tax Assets

Provision for Bad and Doubtful Debts and advancesallowable under Income tax Act 1961 on actual write-off 166 56 110

Provision for Permanent Diminution in value of Investmentsallowable under Income tax Act, 1961 on actual loss 27 (2) 29

��

193 54 139��

Net Deferred Tax Liability 3682 842 2840

18. Related Parties disclosures for the year ended 31st March 2006 as required by the Accounting Standard 18issued by the Institute of Chartered Accountants of India are as follows:

Related parties and their relationship:

(A) i. Subsidiary - NIL

ii. Enterprises over which Promoters, Directors and/or their relatives have significant influence: -

a) Jagmini Micro Knit Private Limited

b) Classic Hosiery Private Limited

c) Shakumbari Sugar and Allied Industries Limited

d) Lakshmi Consultants Private Limited

e) P.C. Overseas Private Limited

f) Shri Puran Multimedia Limited (previously known as Shri Puran Finance & Leasing Limited)

g) Kanchan Properties Limited

h) Jagran Subscriptions Private Limited

i) Om Multimedia Private Limited

j) Jagran TV Private Limited

k) B.K. Fincap Private Limited

l) SPFL Securities Limited

m) Rave Entertainment Private Limited

n) Rave @ Moti Entertainment Private Limited

o) Leet E-Sport Private Limited

p) Jagran Investment Co.

64


iii. Enterprises having substantial interest in the Company:-

a) Independent News & Media PLC, Ireland.

b) Independent News & Media Investments Limited, Ireland.

(B) Associates

a) Jagran Limited

b) Jagran Infotech Limited

c) Jagran Publications Private Limited

d) Jagran Prakashan (MPC) Private Limited

(C) Key Management Personal -

a) Mr. Mahendra Mohan Gupta, Chairman and Managing Director

b) Mr. Sanjay Gupta, Whole time Director & Chief Executive Officer

c) Mr. Dhirendra Mohan Gupta, Whole time Director

d) Mr. Sunil Gupta, Whole time Director

e) Mr. Shailesh Gupta, Whole time Director

(D) Directors and Relatives -

a) Mr. Yogendra Mohan Gupta Whole Time Director upto 17.11.2005

b) Mr. Devendra Mohan Gupta Director upto 17.11.2005

c) Mr. Shailendra Mohan Gupta Director upto 17.11.2005

d) Mr. Sandeep Gupta Executive President (Whole Time Director upto 17.11.2005)

e) Mr. Sameer Gupta Executive President

f) Mr. Devesh Gupta Executive President

g) Mr. Tarun Gupta Executive President

h) Mr. Bharat Gupta Executive President (Directors’ relative upto 17.11.2005)

i) Mr. Rahul Gupta Directors’ relative upto 17.11.2005

j) Mrs. Saroja Gupta

k) Mrs. Vijaya Gupta

l) Mrs. Pramila Gupta

m) Mrs. Madhu Gupta

n) Mrs. Raj Gupta Directors’ relative upto 17.11.2005

o) Mrs. Pragati Gupta

p) Mrs. Ruchi Gupta

q) Mrs. Manjari Gupta Directors’ relative upto 17.11.2005

r) Mrs. Rajni Gupta Directors’ relative upto 17.11.2005

s) Mrs. Ritu Gupta

t) Mr. Siddhartha Gupta Directors’ relative upto 17.11.2005

(E) Hindu undivided family of Directors and firms in which directors and / or their relatives have substantial interest

a) P.C. Gupta Family Trust

b) P.C. Gupta HUF

c) Narendra Mohan Gupta HUF

d) Yogendra Mohan Gupta HUF

e) Mahendra Mohan Gupta HUF

f) Dhirendra Mohan Gupta HUF

g) Devendra Mohan Gupta HUF

h) Shailendra Mohan Gupta HUF

i) Tirupati Printers

65


(F) Details of Transactions- (Rs. In Lacs)*

Nature of Transaction Parties ref. to Parties ref. to Parties ref.to Parties ref.to Parties ref.to

in A above in B above in C above in D above in E above

Receiving of services 96.00 25.75 181.93 85.65 84.00

(132.99) (-) (255.52) (11.47) (-)

Guarantee Commission - - - 15.00 -

(-) (-) (24.00) (-) (-)

Rent Paid 33.50 - 11.21 29.33 44.10

(30.00) (-) (18.28) (26.12) (42.00)

Sale of Newspapers &advertisement space 15.80 - - - -

(14.23) (13.45) (-) (-) (-)

Interest Received 35.60 31.95 - - -

(2.50) (0.98) (-) (-) (-)

Loan Given - 1693.22 - - -

(130.29) (200.00) (-) (-) (-)

Investment made by the Company - 72.73 - - -

(72.23) (-) (-) (-) (-)

Guarantees - - - - -

(5533.52) (-) (-) (-) (-)

Security Deposit 160.00 0.00 39.50 167.25 210.00

(160.00) (-) (57.90) (382.10) (-)

Debtors 3.63 0.00 0.00 0.00 0.00

(10.06) (-) (-) (-) (-)

Amounts Payable 5.66 0.00 0.00 0.00 0.00

(45.04) (6.82) (-) (-) (-)

Other Receivables 21.88 42.46 0.00 0.00 0.00

(-) (-) (-) (-) (-)

Rent and Space Sharingcharges Received 12.07 0.00 0.00 0.00 0.00

(-) (0.84) (-) (-) (-)

Dividend Paid 522.03 - 430.87 876.61 -

(-) (-) (-) (-) (-)

Investment in Equity Sharesof the Company 11000 - - - -

(-) (-) (-) (-) (-)

* excludes advertisement published for Parties referred to in (A) on barter basis and bonus shares issued duringthe year to Parties referred to in (A), (C) and (D).

66


19. EARNINGS PER SHARE (EPS)

2005-06 2004-05

(a) Net Profit as per Profit and Loss Account (Rs. in Crore) 31.70 1.23

(b) Weighted Average number of equity shares used as denominatorfor calculating EPS 40872678 37800361

(c) Basic and Diluted Earnings per share of face value of Rs.10/- each(Before extraordinary item) Rs. 8.29* 0.33

(d) Basic and Diluted Earnings per share of face value of Rs.10/- each(after extraordinary item) Rs. 7.76 0.33

Amount (Rs. in Crore)

*(a) Net Profit after tax 31.70

(b) Add : Extraordinary item being expense 2.17

(net of average tax) ——————

(c) Net Profit before extraordinary item 33.87

——————

(d) Weighted Average number of Equity Shares 40872678

(e) Earning Per Share Rs. 8.29

20. Out of IPO proceeds of Rs.321.25 crores received by the Company in February 2006, an amount of Rs.21.99crores has been incurred on IPO expenses (out of which amount of Rs. 19.80 crores has been paid) Rs.2.71crores has been deposited as refundable security deposit with BSE and balance Rs.298.75 crores has beentemporarily invested as provided in the Prospectus in FDRs of bank and units of mutual fund.

21. a) Figures given in brackets are Previous year‘s figures.

b) Previous year‘s figures have been regrouped recast wherever necessary.

c) Schedule No. 1 to 22 are an integral part of the accounts.

67


BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE(AMOUNT Rs. In Lacs)

I. REGISTRATION DETAILS

Registration No. 4147 State Code 20

Balance Sheet Date 31.03.2006

II. CAPITAL RAISED DURING THE YEAR

Public Issue(Including Premium) 32124.86 Right Issue NIL

Bonus Issue 2780.04 Private Placements 11000.00(Including Premium)

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS

Total Liabilities 64004.25 Total Assets 64004.25

SOURCES OF FUNDS

Paid Up Capital 5019.51 Reserve & Surplus 43653.60

Secured Loans 11624.41 Unsecured Loans NIL

Deferred Credit 24.73 Deferred tax Liability 3682.00

APPLICATION OF FUNDS

Net Fixed Assets 15980.23 Investments 17799.80

Net Current Assets 30208.22 Miscellaneous Expenditure 16.00

Accumulated Losses NIL

IV. PERFORMANCE OF COMPANY

Turnover(including Other Income) 48353.18 Total Expenditure 43775.97

Profit before Tax 4577.21 Profit after Tax 3170.01

Earning per Share (in Rs.) 7.76 Dividend Rate (%) 50

V. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY:

Product Description Newspaper Item Code No. 490210-01

Product Description Periodicals Item Code No. 490290-02

JAGRAN PRAKASHAN LIMITEDRegistered Office : Jagran Building , 2, Sarvodaya Nagar, Kanpur - 208 005

PROXY FORM

I /We _____________________________________________________________________of

_____________________________________________________being a member/members of

Jagran Prakashan Limited hereby appoint _______________________________ of or failing him/her

______________________________________________________________________ of

as my/our proxy to attend and vote for me/us on my/our behalf at the 30thAnnual General Meeting of the Company

to be held on Friday, the 29th September, 2006 at 11.30 A.M and/or at any adjournment hereof.

Signed this ____________________ day of __________ 2006

Note : The Proxy in order to be effective should be completed, stamped and signed and must be deposited at theRegd. Office of the Company at Jagran Building, 2, Sarvodaya Nagar Kanpur-208005, Uttar Pradesh atleast forty eight hours before the schedule time of the meeting.

*Applicable for investors holding shares in demat form.

JAGRAN PRAKASHAN LIMITEDRegistered Office : Jagran Building , 2, Sarvodaya Nagar, Kanpur - 208 005

ATTENDANCE SLIP

FOLIO NO.______________________________________ NO. OF SHARES _________________________________

DP ID / CLIENT ID* ___________________________________________________________________________________

NAME OF THE MEMBER ______________________________________________________________________________

AUTHORISED REPRESENTATIVE _______________________________________________________________________

NAME OF THE PROXY ________________________________________________________________________________

I hereby record my presence at the 30TH ANNUAL GENERAL MEETING of the Company being held on Friday, 29th day ofSeptember, 2006 at 11.30 A.M.at Merchants’ Chambers of Uttar Pradesh, 14/76, Civil Lines, Kanpur - 208 001.

Signature of the Member/ Signature of the Proxy

Authorised Representative

*Applicable for investors holding shares in demat form.Note : To be handed over at the entrance of the meeting hall.

Affix a30 paiseRevenue

Stamp

TE

AR

HE

RE

TEAR HERE

DP ID CLIENT ID **

Documents

Board of Directors - Jagran Prakashanjplcorp.in/JPLWeb/UserFiles/RPT_Year_Download_4.pdf · 2008-05-02 · Merchants’ Chamber of Uttar Pradesh, 14/76, Civil Lines, Kanpur- 208 001