26th Annual Report 2002

Contents

Corporate Mission 2
Board of Directors 3
Letter from the Chairman & CEO’s Desk 4
Pentamedia - A Corporate Glimpse 5
Director’s Report 7
Corporate Governance 11
Shareholder’s Information 14
Secretarial Compliance Certificate 19
Management Discussion and Analysis 20
Auditor’s Report 24
Balance Sheet 26
Profit and Loss Account 27
Schedules 28
Notes on accounts 36
Statement of Cash Flows 41
Financial Highlights 42
Auditors Report on the Consolidated Financial Statements 43
Consolidated Balance Sheet 44
Consolidated Profit and Loss Account 44
Schedules 45
Financial Report - Subsidiary Companies 48
Num TV Limited, Mauritius 49
Improvision Corporation, USA 51
Pentamedia Corporation, USA 52
Animasia International Pte Ltd, Singapore 53
Media Dreams Ltd 57
Mayajaal Entertainment Ltd 65
Kris Srikkanth Sports Entertainment Ltd 71
Statistical Data 78
Global Presence 79

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 26th Annual Report 2002

Corporate Mission

“Constant improvisation

of entertainment using the computer

as a camera”

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 26th Annual Report 2002

Chairman & CEO Dr. V. Chandrasekaran

Board of Directors Dr. S. Ramani

Mr. S. Ranganathan
Mr. T.V. Krishnamurthy
Ms. Usha Ganesarajah

Director & COO Mr. G. Venkatesh Babu

Company Secretary & GM Finance S. Ramasamy

Auditors M/s. S. Viswanathan

Chartered Accountants, Chennai

Legal Advisors Mr. T. K. Seshadri

Mr. T.K. Baskar

Bankers Bank of India

Global Trust Bank Ltd
HSBC Ltd
UTI Bank Ltd

Registered Office “Softowers”, No.1, First Main Road,

United India Colony, Kodambakkam,
Chennai 600 024, Tamil Nadu, India

Development Centre / Studio Software Development Park & Multimedia Center,

1/162, IT Super Highway, (Old Mahabalipuram Road),
Thaiyur Sengammal Village,
Kelambakkam, Kancheepuram District -603 103
Tamil Nadu, India

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 26th Annual Report 2002

Letter from the Chairman & CEO’s desk

Dearest Shareowners,

We meet again!

Entertainment and its myriad medium have established their influence into our world in a profound way. Print medium, radio, theater, television and cable and the internet of course, all have
taken a respectable niche in the entertainment industry. Emerging mediums are getting a major boost from technological advances.

Today any industry adopts a three pronged approach – PRODUCTION, DISTRIBUTION and EXHIBITION. The supply and demand chemistry does not match this three pronged approach
at all times, however the fundamental question lies in the approach…analog or digital. The answer to it is digital and digital all the way.

Your Company, for the last decade, has been originating its deliverables and quality output based on complete digital strategies. Using the computer as a camera we have been able to
achieve 1 trillion tera bytes of data. And now we find the economy emerging with lingua franca’ of grandeur in the likes of TMC (Technology, Media and Communication) and ICE (Infotech,
Communication and Entertainment). This was the foolproof evidence for our strategy. In PRODUCTION we have Pentamedia, in Distribution we have Media Dreams and numtv and in
EXHIBITION we have Mayajaal, the digital multiplex family entertainment center.

Just when we dealt away with the micro-environmental factors, the macro factors walked in. To some extent the geopolitical situations, the overall slow down of the fiscal economy impacted
the expansion and diversification plans of the Company from graduating. In spite of this, we heaved a sigh of successful relief after ALIBABA hit the theaters in India. And we were given the
National Award for the ‘Best English Film’ by the Govt. of India and our film (Pandavas) was placed in No 2 position at the Vancovuer Film Festival at Toronto, Canada.

Empirical knowledge is the ultimate teacher. And we don’t differ in this view. Our experiences have now helped us to concentrate more on in-house products and Co-Productions.

With all this behind and with the essence of all this in our plans, we are confident of improving the quality of output rather than the quantity. We know that quality is definitely costlier, but we
also know that costliest will be the cheapest in the long run.

After all,

Turnover is Sanity
Profit is Finity
Cash is Reality…

Not to forget the faith and wisdom you have all bestowed upon us, we thank you and continue yet another spectacular year of challenges, and competencies that will ultimately lead us to the
crown.

Dr. V. Chandrasekaran
Chairman & CEO

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 26th Annual Report 2002
PENTAMEDIA GRAPHICS – A Corporate Glimpse
Buddha, that is featured in the front cover of the annual report, is the eternal symbol of peace
throughout the universe. Pentamedia Graphics in conjunction with EDP Singapore is all set
to release a film “Buddha”, for the viewers across the globe.
The need for content, and its consumption is ever expanding both inside the US and around
the world. The Internet, DVD, Web TV, HDTV, Cable TV expansion, Satellite distribution and
other technology-driven mediums as well as the international markets are all driving demand
or content.
Available data proves that the entertainment industry is one of the few that can not only
sustain, but also grow during the difficult times of recession and inflation. It is the sheer
emotional need of human beings to always consume more, rather than less, forms of
entertainment. Combine this with the growth in technology over the years, which has allowed
us to view entertainment in not only new, but better mediums that make the experience all the
more enjoyable. This has been observed over the years, first with the radio, then theater,
then with the television and cable, and now more recently with the Internet.
With every emerging medium, this growing market seems to have an insatiable appetite.
For an industry that treasures quality driven products here’s a Company that deserves a royal
flourish of trumpets. Presenting, Pentamedia Graphics Limited. An entire Company dedicated
with its heart, soul and imagination to the creation of innovative life-like computer animation
and awe-inspiring graphics for the entertainment industry.
Pentamedia Graphics, is one of the entertainment graphics majors in the world, catering to
the animation and visual effects industry worldwide. The Company is concentrating on all the
three kinds of screens - Big Screen, Small Screen and Personal Screen. A 22 acre sprawling
off-shore development center centralizes the studio activities at Kelambakkam, India. With
its core expertise in films/broadcasting, video, CD/DVD and Internet entertainment, Pentamedia
is in the forefront of graphics entertainment. The Roncarelli Report on the Computer Animation
Industry has ranked the Company No: 1 factory in the world.
The horizons of the Company expanded itself into the various segments of the entertainment
industry namely Studio Entertainment, Media Entertainment, Web Entertainment, Themed
Entertainment and Sports Entertainment.
Big Screen:
The Big Screen segment comprising of 2D and 3D has been challenging during the year.
The country is abuzz with riots. War and terror reigns the land. The war of the human race
vis-à-vis that of the mind is eternally parading the universe. Arrive on the Scene…Pentamedia’s
Buddha. A co-production with EDB, SINGAPORE, Buddha, is a 90-minute 2D/3D full-length
feature film. Targeted at all age groups, the film depicts the life of Buddha. The sets in
production are CGI and the characters are all 2D traditionally animated. Our production houses
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in Singapore, Manila and USA are working to get the best quality at the right price and timeline.
We have also training skills of Singapore as a part of this co-production to create a profile of
the individual in the first feature animation project in their country.
Set on the locale of the ancient Arabian colonies, Pentamedia’s hy-brid movie “Alibaba”, was
released All-India this year attracting rave reviews. Alibaba is a 90-minute 3D animated
motion capture film foot tapping music score and cut scenes to move the product to appeal to
the entertainment thirst of today’s audience. The movie had over 150 characters, over 50
sets and 1500 props to create the famous Arabian night to reality. Over 300 skilled team
contributed to creation of the movie. Universal adopted the audio rights and sales in Mipcom
and Napte have yielded favorable results to the product. “ALIBABA” is expecting its United
States release during the following year.
“Pandavas” which was released All-India during the last financial year bagged the Best English
Feature Film award from the Govt. of India awarded by the Prime Minister. The film was
screened in the 2nd place at the Vancouver Film Festival held at Toronto, Canada.
Presales is a very significant part of the projects being completed at the studios. The presales
for the movies “Buddha” for EDB Singapore, “Son of Aladdin” a co-production venture that
has reached 70% of its completion mark and “Hanji” the first time blend film of live action and
animation that has reached 55% of its completion mark, are on at American Film Market in
Los Angeles. Finalization of distribution partners is on the anvil. PepperMint, the leading
broadcasting distributor of Italy will be showcasing PANDAVAS for the international television
market MIP TV 2002 at Cannes. Son of Aladdin is an action adventure with magic and
fantasy to get yet another Arabian night story to reality.
Hanji is yet another CGI production feature length on Lord Hanuman as his powers to fight
the bad and protect the good. The feature would get our first digital film exposure where in the
sets are live shoots on real environment and CGI sets come in the fantasy island reminder of
the movie. All characters are CGI and using performance animation to get legend to action.
The studio did the first 4 minutes stereo scopic large format for its Japanese client releasing
this summer in a Japan’s theme park.
In the domestic market as per last year FICCI report Pentamedia a market share of 17% with
over 100 minutes of special effects. In the domestic segment, “Nayak” for S Films involving
9 minutes of dynamic Visual Effects including complex fight sequences, frozen movement
with camera rotation etc., have been dealt with. A mythological perspective for the film
“Kottaimari Amman” has also been executed with extensive special effects for more than 10
minutes. This project involved animated tree-dance, mind boggling monstrous scorpion man
to name a few. “Gemini”, “Bannari Amman”, ”, “Andham”, “Tamizhan”, “Tamizh”, “Red”,
“Nanda”, “Aadi” etc., are the other successfully completed projects. The division had increased
its throughput to do over 150 minutes dominating the south market completely. CGI characters
interacting with live action shots to get Hollywood effects to our producers’ production budgets
and taste of our directors were also successfully completed.
During the year the Company entered into an association with EROS Multimedia, a New York
based distribution bigwig with offices in India and UK. EROS Multimedia is a major player in
Mumbai producing movies, well positioned in the advertising market of Bollywood. The
 26th Annual Report 2002
association is to penetrate into the Bollywood with a strong partner with existing relationship
with producers and directors and work the way industry and the market work. The studio will
start function and marketing its capability this summer. Under the title of “Penta-Eros Studio”
a hi-end postproduction and graphics facility with non-linear systems such as Smoke and
Flint and linear machines such as Abekas 8150 will be set under one roof. It is by far the
country’s most well equipped digital post-production studio providing services to several media
companies such as music channels, the advertising fraternity and the serial/programme
producers. The nature of business of the Penta-Eros Studio will include film visual effects,
film scanning, reverse telecine and other post-production projects.
Small Screen:
In the SMALL SCREEN segment, 26 episodes of 22 minutes each was successfully completed
for Vasantham Central of Media Corp Singapore. Media Corp is airing the same titles
“Panchantantra” in the Tamil language. The programme was well received by the NRIs and
negotiations are on for dubbing the same in various languages.
Three animated features titled “Bible Stories”, “Fairy Tale” and “Moral Stories” will be executed
for Splash Channel. These features have 13 episodes of 22 minutes each. A blend of animation
and live action is being explored. An exclusive science magazine and science fiction story is
under production. Over 150 episodes of 5 minute ‘knowledge know how’s’, ‘skill development’
and ‘safety rules for schoolers’ have been completed and soon the same will be live streamed
on the websites. “Mouse Roars”, “Safety Tips”, “Bible Stories”, “Fairy Tales”, “VIKRA”, and
“Seawars” are key on-going projects. “Mr.Doonz”, “White Elephant”, “You Cheeky Monkey”,
“Three Little Pigs”, have been successfully completed and “House of Wind”, “Dr.Bango”
have neared completion. A few key work-for-hire projects that are ongoing through the year,
in the studios are “RX Car”, “Sea wars”, “Hybrid recorder”, “Empress Chung” amidst others.
3 home videos of 45 minutes are complete and are being marketed at Miptv2002. These are
U cheeky monkey, Mouse Roars, Doonz, House of wind, White Elephant targeting the
preschoolers. Sea Wars is the first complete CGI 52 episodes of 22 minutes Sea Wars for
a Korean client and is scheduled to air in summer 2003. Many cut scenes/models for clients
on the gaming world, Electronic Arts, Infogramme and Qi media for their cricket and car
racing games.
Amedus is a 2D series for a European client and the work is done at our studios in Manila and
India.
Personal Screen:
In the PERSONAL SCREEN segment, www.numtv.com witnessed a slight slump in viewership
owing to the scarcity in affordable bandwidth technology. However, numtv.com signed up
with the US based web-casting portal IBLAST for airing 3 hours of content to be relayed into
the cities of the United States of America. This tie-up helps us to seek broadband for the
viewers of numtv.com at 1/4th of its original cost. This is undoubtedly an exclusive relationship
for the Asian Contents to be promoted over 250 free-to-air television station programs across
the country. This in turn also means that 90% of TV audience will be able to access
www.numtv.com. Last quarter, numtv.com used its graphic expertise and its live streaming
capabilities for Wisden 20:20 to live stream its cricket matches across the world. The
relationship is on going for other matches that are on the anvil.
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In the CBT division, over 120 titles were added during the year and out of them 75 titles are
on concepts and school and college curriculum. Established channel distribution, direct
marketing association, distribution through licensing for international markets based on product
to product. The complete catalogue of titles is over and has over 240 titles and this is the
largest in the domestic market.
The Multimedia Products division of the company included clients namely, American Power
Corporation (APC), Eezeebiz, IGNOU, The Indian Army, Lal Bahadur Shastri Academy, Jamia
Hum Dard University, National Securities Depository Limited, Confederation of Indian Industry
and Madras University. Licensing and international distribution of products are being finalized
and over 240 titles form the library of which 75 have arrived newly into the market.
Education & Training:
During the year 2001-2002, the Education & Training division of the company focused on
imparting knowledge skill and career-oriented training in the latest areas of Multimedia
Technology, focus on corporate Training. A corporate training on “Interactive Multimedia
Designing” for Rajiv Gandhi Shiksha Mission , Bhopal was conducted during the year. A new
curriculum has been designed, developed and implemented combining in a unique way the
technology and functional and expertise in the areas of 2D/3D Animation, Visual Effects,
Editing, Motion capture technologies. New courses on Motion Capture Technologies, Film
Making, Animation etc have been introduced during the year.
Human Resource Development:
Pentamedia Graphics being a creative organization has technological and cultural heritage,
built on creativity. Its key feature is observation, thought, visualization and expression. Using
computer as a camera we express ideas / emotional feelings in new ways that will have an
impact on viewers. The creativity, innovativeness and commitment of our people have played
a significant role in the heights of excellence climbed. Human Resource practices are designed
to provide a conducive environment. Employees require a certain degree of flexibility and
freedom for innovative and independent thinking. Our approach is to synthesize creativity
with reasoning; abstract thinking with sequential / logical thinking; freedom with discipline.
The company provides one of the best working class facilities, leading edge technologies
and an intensely creative environment to its employees. The training includes on the job
training, functional training and cross-functional training and behavioral training.
 26th Annual Report 2002

Directors’ Report ALIBABA’s music score has been enhanced by Mr.Pravin Mani. UNIVERSAL Music is
marketing the music scores.
Your Directors are pleased to present their report on the working of your Company for the The Company has joined hands with EROS MULTIMEDIA during the year for doing film
year ended 31st March 2002. distribution. Under the title of Penta-Eros Studio, a hi-end post production and graphics
facility, to provide services to several media companies including music channels, the
Financial Highlights Rs. 000s advertising fraternity and the serial/ programme producers has been set up
2001-2002 2000-2001
Total Income 4,618,793 5,701,577 The films (products) under active production are “The Monkey God” and “Sinbad & Collins”.
Profit before Interest, Depreciation & Tax 1,778,660 2,109,566 The products like “Gulliver’s Travels”, “Buddha” and “Legends of the Valiant” are on the Co-
Net Profit after tax 987,494 1,535,498 Production front. All these projects/products are expected to be released at appropriate
Add : Surplus Brought forward 4,337,542 3,119,586 intervals.
Profit available for appropriation 5,325,036 4,655,084 TV (2D Animation, Special Effects)
Proposed Dividend 37,479 163,992 In the small screen, the company has completed 26 episodes for 22 minutes each successfully
Transfer to General Reserve 98,749 153,550 for Vasantham Central of Media Corp Singapore. Media Corp is airing the same titles
Transfer to contingent Reserve 4,250,000 - Panchathantra in the Tamil Language. The programme was well received by the NRIs and
Surplus carried to Balance Sheet 938,808 4,337,542 negotiation is on for dubbing the same in various languages. Three animated episodes
titled “Bible Stories”, “Fairy Tale” and “Moral Stories” will be executed for Splash, a children’s
Reserves and Surplus TV Channel.
The aggregate Reserves and Surplus after appropriations, amounts to Rs. 9,056,735
thousands as on 31.03.2002 as against Rs. 11,928,726 thousands as on 31.03.2001. MIPCOM 2001 at France, the television distribution show conducted for corporates worldwide
Dividend helped us in exhibiting our distribution-products, in-production projects and to-produce projects
Your directors have pleasure in recommending payment of dividend on the Equity Share for co-production as well as distribution. In all Company exhibited over 7 features; 4 home
Capital at the rate of 50 paise per share (5% on par value of Rs.10) for the year ended 31st video and two 26 episodes TV series. These were viewed and received by many broadcasters
March 2002. and distributors during MIPCOM JUNIOR and has progressed itself into negotiating mutually
beneficial terms of agreement for various markets.
Business Operations Interactive Multimedia (CD, CBT, Internet)
Your Company’s revenue during the year was Rs. 4,417,175 thousands compared to Rs. In the PERSONAL SCREEN segment, www.numtv.com witnessed a slight slump due to the
5,523,791 thousands during the previous year, as during the year the billings have been combination of factors such as Bandwidth, US slowdown and consequent return of NRI’s
done from the subsidiary companies in respective countries in order to achieve greater back to their motherland. However, numtv.com signed up with a US based webcasting portal
efficiencies in billing, factoring and copyright protection for Multimedia products and projects. for airing content to be relayed into the cities of the United States of America. This tie-up
The turnover has shown a growth of 16% on a consolidated basis. Operating profit during helps us to seek broadband for the viewers of numtv.com at a lower cost. Last year, numtv.com
the year was Rs 779,755 thousands (17.65% of total revenues) compared to Rs.1,389,237 used its graphic expertise and its live streaming capabilities for Wisden 20:20 to live stream
thousands (25.15% of total revenues). its cricket matches across the world. The relationship is on going for other matches that are
Films (3DAnimation, Visual Effects) on the anvil.
Our Company has released yet another full length 3D animation Hybrid feature film ALIBABA
during the year in the Indian Market. This film was executed in the studios located at Chennai Future Focus
apart from postproduction at United States and Canada. Pentamedia’s immediate majority concentration is in repositioning strategies towards 3D
home productions and Co-productions to not only own the product but also aim at the long-
Few components of the film that has scaled up its place in the field of animation technology term pay off for encashing on the digital assets. The Company proposes, by conserving cost
are as follows: and preserving cash, to claim back its debt free position and carefully plan for organic and
 Stylized characters inorganic expansion.
 Advanced motion capture techniques
 Photo-realistic environment With the advent of digital projectors, digital broadcasting hubs, digital theatres, Hi-definition
 Re-purposable/re-usable digital contents TV to name a few Pentamedia is confident of performing to its potential. Its presence in the
various high technology areas is meant to provide quality entertainment at affordable prices
for an ever-increasing global audience thirsty for entertainment.

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 26th Annual Report 2002
Subsidiaries:
Your Company acquired three domestic companies viz., Media Dreams Limited, Mayajaal
Entertainment Limited., and Kris Srikkanth Sports Entertainment Limited, during last year by
way of stock swap. These companies have started earning profits and the results of the
companies are annexed.
Media Dreams Limited
M/s. Media Dreams Limited had a significant year to contemplate and march forward. Out of
the 37 film awards that were distributed during the year by the Govt. of India, six of them were
bagged by Media Dreams. They also foray into film distribution activity and distributed films
like “12B”, “Ashoka”, “Pammal K Sambandam” and “Crocodile Dundee”.
Media Dreams has produced over 500hours of TV software and six feature films have been
successfully released. This company has also undertaken marketing of popular teleserials
“Kodeeswaran”, “Neelavaanam” “Thozhigal”, “Kundakka Mandakka”. Presently it is distributing
“Metti Oli” and “Thandhira Bhoomi”
Mayajaal Entertainment Limited
This company had an impressive year. The digital entertainment family center located on the
marine East Coast Road off Chennai has recorded impressive footfalls during the year. A
plethora of events, campaigns, shooting valleys, corporate outings, games etc., have been
the way of life for the center. The digiplex theatres are very popular.
With an international Bowling Alley, variety-replete food court, and a thrilling gaming arcade,
this place is becoming the most sought after destination in Chennai. Invitation from various
Countries, States and Union Territories are pouring in for replicationg the similar facility.
Kris Srikkanth Sports Entertainment Limited
This company has done well during the year. The successful release of its first CD/VCD titled
“WORLD CUP 83” – The greatest moment of Indian Cricket and the second CD titled “Cricket
Encyclopedia” were well accepted in the market. The Internet division of the company
successfully completed 150 hours of live web-cast of cricket content for Numtv.com. Kris
Srikkanth and Venkatapathy Raju anchored Road shows in U.S. during the year, which was
well received by the market.
Overseas Subsidiaries
Also your Company has acquired Improvision Corporation an U.S. based company last year
by way of stock swap.
During the year the Company has obtained approval from Reserve Bank of India to consolidate
all its overseas subsidiaries under Num TV Limited, Mauritius. The details regarding the
functioning of the subsidiaries are mentioned in the Directors Report of each company.
Subsidiary Company Accounts
In compliance with the provisions of Section 212 of the Companies Act, 1956, the Audited
Statement of Accounts for the year ended 31st March 2002 of the Subsidiary Companies and
also the statement under the said section are attached along with the Balance Sheet of the
Company.
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Share Capital
The Company issued 12,700 thousand GDRs during July 2001 and further 14,500 thousand
GDRs during February 2002.
The listing agents for the GDRs are M/S. Deutsche Bank Luxembourg SA .
Consequent to the above issues, the equity capital stands increased at Rs. 749,583 thousands
and the Share Premium Account stands at Rs. 7,307,134 thousands.
As a reward to shareholder, the Board recommends issue of one bonus share for every ten
shares held. For fractional entitlements, consolidation will be done by an independent agency
to be appointed by the board.
Employees Stock Option Plan
The earlier ESOP scheme has been abolished during February 2001 itself due to changed
capital market scenario and no ESOP is outstanding as on date.
The company has placed before the shareholders for passing the relevant resolution under
section 81(1A) for issue of ESOS/ESPS under the prevailing guidelines of SEBI for
approval
Deposits
Your company has not accepted any public deposits during the year.
Quality
The company has been certified with SEI CMM Level IV by KPMG. The company strives to
deliver the products/projects and multimedia services at quality levels desired by customers.
Corporate Governance
Your Company follows principles of effective Corporate Governance. The endeavor of your
company is not only to comply with regulatory requirements but also to practice Corporate
Governance principles that lay a strong emphasis on integrity, transparency and overall
accountability.
The report of the Directors on the practices of Corporate Governance is given as a separate
section titled, “Corporate Governance”, which forms part of this Annual Report.
Secretarial Compliance Report
As a reflection of your Company’s commitment to transparency, the Board is pleased to
enclose the Secretarial Compliance Report for the year 2001-2002 to Corporate Governance
Report.
Directors
Mr.S.Ranganathan, Director retires by rotation in the forthcoming Annual General Meeting
and is eligible for re-appointment.
During the year Mr.G.Venkatesh Babu, Mr.T.V.Krishnamurthy and Ms.Usha Ganesarajah were
appointed as additional Directors. Mr.G.Venkatesh Babu was appointed a Whole Time Director
at the Board Meeting held on 11th February 2002.
 26th Annual Report 2002

Notices have been received by the members of the company under Section 257 of the
Companies Act, 1956 along with requisite deposit signifying their intention to proposing the
candidature for appointment as Directors of the Company.
Mr. K.Srinivasan, Mr.T.K.Seshadri, Mr. Ashok Kumar Ishwarlal Desai and Mr. Kennath
P. Silverman, Directors have resigned from Board on 03.08.2001, 03.09.2001, 03.09.2001and
06.09.2001 respectively. The Board places on record its appreciation for the excellent services
rendered by them during their tenure as Directors of the company.
Auditors
In the last AGM, the company appointed M/s.Pricewaterhouse and M/s.S.Viswanathan as
Joint Auditors of the company. As the company does not propose to do audit under USGAAP,
M/s.Pricewaterhouse, resigned during the year as the Joint Auditors of the Company.
M/s.S.Viswanathan, Joint Auditors continued as Sole Auditor of the company and they hold
office till the conclusion of the ensuing Annual General Meeting and are eligible for
reappointment. The Company has received the letter from M/s. S. Viswanathan to the effect
that their appointment as Auditors, if made, would be within the limits under Section 224(1-B)
of the Companies Act, 1956.
Personnel
During the year under review, your Company concentrated on productivity improvement and
better utilization ratios. Your company continues to maintain cordial relationship with the
employees at all levels.
Particulars of Employees required under Section 217(2A) of the Companies Act, 1956 and
the Companies (Particulars of Employees) Rules, 1975 as amended form part of this report.
Conservation of Energy, technology absorption & Foreign Exchange Earnings / outgo
Auditors Report
The Auditors have stated that the accounts have been prepared in compliance with the
Accounting Standards issued by the Institute of Chartered Accountants of India referred to in
Section 211(3C) of the Act to the extent applicable excepting the Note no. 2 relating to
Accounting Standard 13.
Decline in the value of investments in Pentasoft Technologies Limited was recognised to the
extent of Rs. 3,382,584 thousands of which Rs.1,030,206 thousands was adjusted against
Capital Reserve created at the time of acquisition of this investment and the balance of
Rs.2,352,378 thousands was adjusted out of contingency reserve instead of Profit and Loss
Account. (As per notes on accounts)
As per Accounting Standard 13, the reduction in the value of investments is to be adjusted
against current year earnings of the company. Since the transaction is not a normal business
transaction, the reduction in the investment value is adjusted against available Capital Reserve
and the Contingency Reserve.
Acknowledgment
We take the opportunity to express our deep sense of gratitude to Banks, Central and State
Government departments and Regulatory Authorities and also business partners and
customers in India and abroad for their continued guidance and support.
Your directors would like to record their sincere appreciation of the dedicated efforts put in by
employees across all levels in the organisation, which have enabled the company to achieve
consistent performance.
And to you, our shareholders, we are deeply grateful for the confidence and faith that you
have always placed on us.

Particulars regarding technology absorption, conservation of energy and outgo required under For and on behalf of the Board
section 217(1)(e) of the Companies Act, 1956 is annexed to this report.
Place: Chennai V.Chandrasekaran
Directors Responsibility Statement Date: 24th April 2002 Chairman & CEO
Pursuant to the requirement under Section 217(2AA) of the Companies amendment Act,
2000 with respect to Directors Responsibility Statement, it is hereby confirmed:
(i) That in the preparation of the annual accounts for the financial year ended 31st March,
2002, the applicable accounting standards had been followed along with proper
explanation relating to material departures.
(ii) That the directors had selected such accounting policies and applied them consistently
and made judgments and estimates that were reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the end of the financial year
and of the profit or loss of the Company for the year under review;
(iii) That the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(iv) That the directors had prepared the accounts for the financial year ended 31st March
2002 on a ‘going concern’ basis.

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 26th Annual Report 2002

Information under section 217(1) (e) of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and forming part of Directors Report.
A. CONSERVATION OF ENERGY
Energy conservation measures are taken by constant monitoring and implementing measures
for reduction of energy consumption.
Information on total energy consumption and energy consumption per unit are given in Form A
Deployment for NumTV.
Now, NumTV users can see the broadband quality content through wireless platform without
having a broadband connection. Content is transferred to the user’s computer through wireless
media.
Enhancements have been done for the Plug-ins developed for the 3rd party software like
Maya, SoftImage and 3Dmax for our production of films, TV series, Home Videos. New Plug-
ins was also developed during this period.

FORM – A Future
POWER AND FUEL CONSUMPTION Integration of in-house developed project management software will be done with Production
2001-2002 2000-2001 software. This will make Project management and tracking simpler.
Power Consumption in units 2,510,653 4,075,151
EXPENDITURE ON R & D
Electricity charges (Rs.) 11,912,767 17,348,792
Cost per Unit (in Rs.) 4.74 4.26
2001-2002 2000-2001
Self Generated Units 126,093 403,678
Rs. 000’s Rs. 000’s
Fuel Cost (Rs.) 605,420 1,713,716
Cost per Unit (Rs.) 4.80 4.25 A. Capital Nil Nil
B. Recurring 4,890 6,137
B. TECHNOLOGY ABSORPTION AND INNOVATION C. Total 4,890 6,137
FORM – B C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Research & Development
2001-2002 2000-2001
R&D Department focused on development of technology for content delivery over emerging Rs. 000’s Rs. 000’s
platforms such as Set Top Box, Wireless Devices, Interactive TVs, IP edge servers, CDN Foreign Exchange Earnings 4,307,789 5,256,804
Foreign Exchange outgo 3,022,994 4,067,361

Statement of Particulars of Employer’s as per Sec 217(2A) of the Companies Act, 1956.

Sno Name DOB Age Designation Remuneration Qualification Exp. Date of Details of Last
Rs. Years Commencement Employment
of Employment

1 Chandrasekaran V 03-May-51 52 Chairman & CEO 3,840,000 M.E.,M.I.E.,CE 26 Jan-92 Anjana Consultancy
Services Pvt Ltd,
Chief Executive
2 Srikantha Rao 1-Jan-49 53 Vice President 1,042,000 B.Sc(ED), M.Sc, 22 May-01 Silicon Graphics Ltd,
- Technical P.hd Director - Technical
3 K Srinivasan 2-Sep-52 49 Director & COO 704,000 B.E. (Mech) 28 Apr-96 Deutsche Babcock
Balke - Durr Ltd,
Dy. GM - Projects

10

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 26th Annual Report 2002
REPORT ON CORPORATE GOVERNANCE
As the Company is a part of “Group A” of Bombay Stock Exchange index, in terms of Clause
49 of the Listing Agreement of the Stock Exchanges, the compliance Report on Corporate
Governance (in the prescribed format), alongwith the Certificate of Statutory Auditors (Annexure
I) is given as under:
Corporate Governance policies
Pentamedia Graphics Limited is committed to the highest standards of Corporate Governance
in all its activities and processes. Pentamedia Graphics Limited looks at Corporate Governance
as the cornerstone for all sustained superior financial performance, for serving all the
shareholders and for instilling pride of association. The entire process begins with the
functioning of the Board of Directors, with leading professionals and experts serving as
independent directors and represented in the various Board Committees. Systematic attempt
is made to eliminate informational asymmetry between executive and non-executive Directors.
A. Board composition
1. Responsibilities of the CEO and the COO
The current policy of the Company is to have an executive Chairman and Chief Executive
Officer (CEO), and a Director and Chief Operating Officer (COO). There is a clear
demarcation of responsibility and authority between the two. The CEO is responsible
for Corporate Strategy, Brand equity, Planning, External Contacts, Acquisitions, and
Board matters. The COO is responsible for all day-to-day operations-related issues
and for the achievement of annual targets in customer satisfaction, sales, profitability,
quality, productivity, recruitment, and training and employee retention. The CEO, COO
and the senior management, make periodic presentations to the Board on their
responsibilities, performance and targets.
2. Size of the Board
The Board, has six Members, and periodically reviews the need for its expansion. As
per the current by-laws of the Company, the Board can have up to 12 (twelve) Members.
3. Executive and independent directors
The Board has been constituted in a manner, which will result in appropriate mix of
executive and independent directors. This has been done to preserve the independence
of the Board and to separate the board functions of governance and management. The
current Board has three independent directors and two executive directors.
4. Board Membership criteria
Board Members are expected to possess the expertise, skills and experience required
to manage and guide a high growth Company. Expertise in strategy, technology, finance,
quality and human resource is essential. They are not a relative of an executive director
or of an independent director. They are generally not expected to serve in any executive
or independent position in any Company in direct competition with Pentamedia. Board
Members are expected to rigorously prepare for, attend, and participate in all Board
and applicable Committee meetings. Each Board Member is expected to ensure that
other existing and planned future commitments do not materially interfere with the
Member’s responsibility as a director of Pentamedia.
11
page 1-22.p65 11
5. Membership term
The Board constantly evaluates the contribution of its Members, and recommends to
shareholders their re-appointment as per statute. The current law in India mandates
the retirement of one-third of the Board Members every year and qualifies the retiring
Members for re-appointment. The executive directors are appointed by the shareholders
for a maximum period of five years at one time but are eligible for re-appointment upon
completion of their term. However, the Membership term is limited by the retirement
age for Members.
6. Retirement policy
The Board has adopted a retirement policy for its Members. Under this policy, the
maximum age of retirement of Executive Directors, including the CEO, is 60 years,
which is the age of superannuation / retirement and is determined by the nomination
Committee. The age for retirement from the Board is 70 years.
7. Board compensation review
The Compensation Committee determines and recommends to the Board, the
compensation payable to the Members of the Board. The overall policy of the Committee
is to institute such compensation and benefits for the employees, as well as for the
Members of the management council, which reward performance as per set criteria.
Periodic evaluation of the performance decides the variable component of the
compensation. The Committee will reward and approve the compensation payable to
the employees including that of the Executive Directors of the Company within the
overall limits approved by the shareholders. The Committee will also review the
compensation for all the management council Members of the Company. The Committee
will formalise the compensation and benefits along with stock options adequate to
motivate and retain senior officers of the Company. The compensation of the independent
directors is approved at a meeting of the full Board. Independent directors are paid
compensation by way of sitting fees for the Board / Committee Meetings attended.
8. Membership of other Boards
Executive Directors are excluded from serving on the Board of any other entity unless
the said entity is an industrial entity whose interests are germane to the business of this
industry, or a government body that is of relevance to this industry, or an entity whose
objective is the upliftment of society. Independent directors are generally not expected
to serve on the Boards of competing companies. Other than this, there are no limitations
on them save those imposed by law and good Corporate Governance.
B. Board Meetings
1. Scheduling and selection of agenda items for Board meetings
Normally Board meetings are scheduled with proper notice in advance. Most of them
are held at the Company’s Registered Office at United India Colony, Kodambakkam,
Chennai – 24. The Company Secretary in consultation with the Chairman & CEO drafts
the agenda for each meeting, along with explanatory notes, and distributes it in advance
to the Board Members. Every Board Member is free to suggest the inclusion of items
on the agenda. Normally, the Board meets once a quarter to review the quarterly results
and other items on the agenda. On a need basis, additional meetings are held. A
Committee of the Board meets as and when required for transacting business of a
routine nature.
7/11/2002, 7:10 PM
 26th Annual Report 2002
2. Availability of information to the Members of the Board
The Board has unfettered and complete access to any information within the Company,
and to any employee of the Company. At the meetings of the Board, the Board welcomes
the presence of managers who can provide additional insights into the items being
discussed.
C. Board Committees
1. The Committees of the Board
Currently, the Board has three Committees – the Audit Committee, the Share Transfer
and Investor Relations Committee and the Remuneration Committee. These
Committees are composed of majority of independent directors. The functions of these
Committees are described elsewhere in this report.
2. Assignment and terms of service of Committee Members
The Board decides, in consultation with the Chairman and considering the views of
individual Board Members, terms of service of various Committees and the assignment
of specific Board Members to various Committees.
3. Frequency of duration of Committee meetings and Committee agenda
The Chairman of the Board, in consultation with the Company Secretary of the Company
and the Committee Chairman, determines the frequency and duration of the Committee
meetings. Normally, the Committees meet at least twice a year. The Committee agenda
and the Minutes of the Committee meeting are submitted to the full Board for information.
D. Management review and responsibility
1. Formal evaluation of officers
A Committee headed by the Chairman and CEO reviews, evaluates and decides the
annual compensation for officers of the Company from the level of General Managers
excluding Members of management council. Further, the Compensation Committee
decides the compensation and benefits for Board Members as well as for the Members
of the Management Council.
2. Succession planning and management development
The Chairman reviews succession planning and management development with the
Board from time to time.
3. Board interaction with clients, employees, institutional investors, the government
and the press
The Chairman and CEO manages all interactions with investors, the media, and the
government. In this task, he seeks advice and help from the Director and COO, as well
as the CFO, where necessary. The Director and COO manages all interactions with
clients taking the advice and the help of the CEO, where necessary. Both the CEO and
the COO handle employee communication.
Compliance with Corporate Governance codes
Corporate Governance has assumed great significance in India in the recent past.
Even though the Companies Act, 1956 provides a framework for Corporate Governance,
defines the powers, duties and responsibilities of the Board, and institutes a system of
checks and balances with punishment for transgression of law, there was a need felt
for a comprehensive code of Corporate Governance. Indian industry associations have
12
page 1-22.p65 12
taken the lead in framing such a code. Globally, the Cadbury Committee on Corporate
Governance has framed a similar code. As already stated, the Company is committed
to good Corporate Governance and has adopted good governance.
Compliance with the recommendations of the Shri Kumara Mangalam Birla
Committee on Corporate Governance
The Company has complied with all the recommendations of the Committee.
The Committee has required certain information set out in Annexure 4 of the Committee’s
Report to be furnished in the Company’s Annual Report. The same is given below:
a. Company’s philosophy on Code of Governance
The Company’s philosophy on Code of Governance as adopted by the Board is as
under:
‰ Ensure that the quantity, quality and frequency of financial and managerial
information, which management shares with the Board, fully places the Board
members in control of the Company’s affairs;
‰ Ensure that the Board exercises its fiduciary responsibilities towards Shareowners
and Creditors, thereby ensuring high accountability;
‰ Ensure that the extent to which the information is disclosed to present and potential
investors is maximized.
‰ Ensure that the decision making is transparent and documentary evidence is
traceable through the minutes of the meetings of the Board/Committee thereof;
‰ Ensure that the Corporate Governance Task Force itself, the Board, the Employees
and all concerned are fully committed to maximizing long term value to the
Shareholders and the company;
‰ Ensure that the core values of the Company are protected;
b. Board of directors
‰ Composition and category of directors as of March 31, 2002 is as follows:
Category No. of directors %
Executive Directors 2 33
Non- Executive Directors 4 67
7/11/2002, 7:10 PM
 26th Annual Report 2002

c. Audit Committee
* Attendance of each director at the Board Meetings and the last AGM
SNo. Name of Director Category* Board Meetings Attendance ‰ Brief description of terms of reference
Held Attended at AGM
The Audit Committee is responsible for effective supervision of the financial reporting
process, ensuring financial and accounting controls, and ensuring compliance with
financial policies of the Company. The Committee periodically interacts with the
1 Dr. V. Chandrasekaran ED 10 10 P
statutory auditors and internal auditors of the Company to ascertain the quality and
2 Dr. S. Ramani NED/ID 10 7 P
veracity of transactions; to review the manner in which they are performing the
3 Mr. S. Ranganathan NED/ID 10 10 P
responsibilities; and to discuss auditing, internal control and financial reporting issues.
4 Mr.G.Venkatesh Babu ED 10 4 @
The Committee has full access to financial data and to Members of the Company’s
5 Ms.Usha Ganesarajah NED 10 0 @
staff.
6 Mr.T.V.Krishnamurthy NED/ID 10 5 @
7 Mr. T. K. Seshadri* NED/ID 10 4 P
The Committee reviews the quarterly, half-yearly and annual financial statements
8 Mr.Kenneth P Silverman* NED 10 1 A
before they are submitted to the Board. The Committee also monitors proposed
9 Mr.K. Srinivasan* ED 10 4 P
changes in accounting policies, major accounting entries based on exercise of
10 Mr. Ashok Kumar Ishwarlal Desai* NED 10 - A
judgement by management, qualifications of draft audit report, significant
adjustments arising out of audit, reviews internal auditing functions and compliance
Dr.V.Chandrasekaran, is the only Promoter Director of the Company.
with stock exchange and legal requirements concerning financial statements and
* ED - Executive Director; NED - Non Executive Director;ID – Independent Director
discusses the Company’s financial and risk management policies.
* Mr.K.Srinivasan, Mr.T.K.Seshadri, Mr.Ashok Kumar Ishwarlal Desai and Mr.Kennath P
Silverman, Directors have resigned from Board on 03.08.2001, 03.09.2001,
Composition of committee:
03.09.2001and 06.09.2001 respectively.
@ Appointed after AGM date
Mr. S. Ranganathan, Chairman
P - Present : A - Absent
Mr. S. Ramani. Director
* Details of Board Meeting held and dates on which held : Mr. T.V.Krishnamurthy, Director
Ten Board meetings were held during the year. The dates on which the meetings were
held as follows: *Meetings and attendance of members during the year
Sl.No Date of meeting No. of Directors Present Director Held Attended
1 12th April 2001 3
2 29th May 2001 4 Mr. S. Ranganathan 4 4
3 13th July 2001 5
4 23rd July 2001 6 Dr. S. Ramani 4 3
5 03rd August 2001 5 Mr. T. K. Seshadri 4 2
6 31st October 2001, 5 Mr.T.V.Krishnamurthy 4 2
7 29th November 2001, 5
8 9th January 2002, 5 Mr.T.V.Krishnamurthy was appointed on 31.10.2001
9 30th January 2002, 3
10 11th February 2002. 4 Mr.T.K.Seshadhri resigned with effect from 03.09.2001

The Company did not have any pecuniary relationship or transactions with the non-executive d. Remuneration Committee
directors during the period under review.
The remuneration if any of non-executive directors is decided by the Board of Directors.
‰ Brief description of terms of reference
None of the directors on the Board are members in more than ten committees and they do
not act as Chairman of more than five committees across all companies in which they are The overall policy of the Committee is to institute such compensation and benefits
directors.

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 26th Annual Report 2002

for Board Members, as well as for the Members of the management council, which connection with the shareholders’/investors servicing and redressal of their
reward performance as per set criteria. Periodic evaluation of the performance grievances.
decided the variable component of the compensation.
Composition of Committee
‰ Composition, name of Members and Chairman The Members of the Company’s investor Grievance Committee are:
Dr. S.Ramani - Chairman
Mr. S. Ranganathan, Director Dr.S.Ramani, Chairman
Mr. T.V.Krishnamurthy, Director Mr.G.Venkatesh Babu, Director
Mr. S. Ranganathan, Director
‰ Meetings and attendance of members during the year
‰ Name and designation of compliance officer
Director Held Attended Mr. S. Ramasamy, Company Secretary and GM Corporate Finance.
Mr. S. Ranganathan 2 2
‰ Number of shareholders complaints received, number not solved to the satisfaction
Dr. S. Ramani 2 2
of the shareholder and number of pending transfers
Mr.T.V.Krishnamurthy 2 2
The details are provided in the “shareholders information” section of this report.

e. Details of Remuneration paid / payable to directors for the year 2001- 2002. g. Annual General Meetings

Rs.‘000s ‰ Location and time for the last three Annual General Meetings

Name Designation Salary Perks Total Year Date Time Venue

V. Chandrasekaran Chairman & CEO 4,384 73 4,457 1998-1999 June 24, 1999 11.00 A. M. Rani Seethai Hall,
K. Srinivasan Director & COO 776 38 814 603, Anna Salai, Chennai 600 006.
G. Venkatesh Babu Director & COO 159 715 874 1999-2000 May 12, 2000 10.00 A. M. Rani Seethai Hall,
Total 5,319 826 6,145 603, Anna Salai, Chennai 600 006.
2000-2001 July 20, 2001 10.00 A. M. Rani Seethai Hall,
‰ Mr.K.Srinivasan has resigned w.e.f.03.08.2001 603, Anna Salai, Chennai 600 006.

‰ Location and time for the last three Extra-ordinary General Meetings
f. Shareholders’/Investors’ Grievance Committee
Date Time Venue
‰ Brief description of terms of reference February 1, 1999 10.00 A. M. Rani Seethai Hall,
603, Anna Salai, Chennai 600 006.
The terms of reference of this Committee encompasses formulation of shareholders’/ January 6, 2000 10.00 A. M. Rani Seethai Hall,
investors’ servicing policies, looking into redressal of shareholder and investors 603, Anna Salai, Chennai 600 006.
complaints viz., transfer of shares, non receipt of balance sheet, non receipt of December 15, 2000 10.00 A. M. Rani Seethai Hall,
declared dividends etc., and deciding on any other matter as may be required in 603, Anna Salai, Chennai 600 006.

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 26th Annual Report 2002

‰ Whether special resolutions were put through postal ballot last year, details of j. General shareholder information
voting pattern, person who conducted the postal ballot exercise proposed to be
conducted through postal ballot and procedures for postal ballot. Corporate Headquarters :
There was no resolution passed through postal ballot.
“Softowers”1, 1st Main Road
United India Colony
h. Disclosures
Kodambakkam
‰ Disclosures on materially significant Related Party Transactions i.e. transactions of
Chennai – 600024.
the Company of material nature, with its founders, the directors or the management,
Tel: 044 - 4833067
their subsidiaries or relatives etc. that may have potential conflict with the interests
Fax: 044 - 4830797
of the Company at large.
E-mail: shares@penta-media.com
The details of the related party transactions are given in the Notes on accounts No.7
Website: www.penta-media.com

‰ Details of non-compliance by the Company, penalties, strictures imposed on the

Chief Compliance Officer
Company by Stock Exchange or SEBI or any statutory authority, on any matter
Mr. S. Ramasamy - Company Secretary and G M - Corporate Finance
related to capital markets, during the last three years.
Dates of Book Closure : 3.7.2002 to 10.7.2002 (both days are inclusive)
None.
1. Date, Time and Venue of AGM : 10th July 2002 at 11 A.M. at Rani Seethai
Hall, Mount Road, Chennai – 600 006.
i. Means of communication
2. Financial Calendar : 1st April 2001 To 31st March 2002
3. Dividend Payment : On or after 11th July, 2002, but within the
‰ Half-yearly report sent to each household of shareholders statutory time limit to those shareholders
whose names on the Register of Members
on Wednesday, 10th July, 2002
‰ Quarterly results – which newspapers normally published in; any website, where 4. Listing on Stock Exchanges in India at : 1. Madras Stock Exchange Limited
displayed; whether it also displays official news releases; and the presentations Exchange Building, Post Box 183
made to institutional investors or to the analysts. 11, Second Line Beach,
The quarterly results are generally published in one of the Leading National / Business Chennai – 600001
2. The Stock Exchange, Mumbai
Newspaper in English and one in Vernacular Language (Tamil- in Makkal Kural). Rotunda Building, 1st Floor
The entire quarterly financial statements as well as the annual financial statements, Mumbai Samachar Marg,
alongwith the segmental information, are posted on the Company’s website (http:/ Mumbai - 400001
/www.penta-media.com). Any specific presentations made to analysts and others, 3. National Stock Exchange of India Ltd.
Exchange Plaza, Bandra Kurla
which are not available in the general domain, are also posted on the Company’s
Complex
website. Bandra (E), Mumbai-400051
(Listing fees for 2001-2002 has been
paid to the above stock exchanges)

5. Stock Code : 329 (BSE)

PENTSFWARE AE (NSE)

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 26th Annual Report 2002

6. Listing on Stock Exchanges : 1. Luxembourg Stock Exchange b) GDR trading price on the Luxembourg Stock Exchange for the period of April 2001 to
(overseas) Societe de te Bourse de Luxembourg March 2002
Societe P Nonyrne / RC B 8222 8P 165
L – 2011 Luxembourg Month High Low
US$ US$
7. Stock Market Price Data for the year 2001-2002
April 2001 2.03 1.55
a) Monthly High and low of closing quotations and volume of shares: May 2001 2.13 1.85
June 2001 2.13 1.60
BSE NSE July 2001 1.70 1.60
Month High Low Volume High Low Volume August 2001 1.63 1.50
Rs. Rs. Rs. Rs. September 2001 1.50 0.60
October 2001 0.80 0.48
April 2001 111 50.65 57,011,216 111.40 53.15 80,667,524
November 2001 1.40 0.80
May 2001 100.80 78.20 74,901,742 101.30 78.05 86,477,865 December 2001 1.75 1.40
June 2001 106.10 58.00 86,944,050 103.40 61.00 110,596,419 January 2002 1.75 1.38
July 2001 82.90 58.10 5,750,336 83.00 54.70 41,682,910 February 2002 1.38 1.25
August 2001 67.80 53.30 8,197,260 68.35 53.25 23,531,345 March 2002 1.38 1.10
September 2001 53.50 23.30 6,628,876 53.50 23.40 18,900,470
October 2001 38.98 19.60 1,783,313 39.50 19.70 38,428,386
November 2001 78.00 34.50 45,514,381 83.75 33.20 88,941,728
December 2001 80.00 44.20 54,244,642 81.90 44.15 98,343,453
January 2002 87.05 56.90 96,488,049 87.20 56.95 168,008,417
February 2002 72.15 54.10 31,830,330 81.25 54.15 65,410,069
March 2002 60.00 47.20 23,108,153 60.15 47.50 46,690,381

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 26th Annual Report 2002

M/s. Integrated Enterprises (India) Ltd.,

8. Share Transfer System: 2nd Floor, “Kences Towers”,
No.1, Ramakrishna Street, T. Nagar, Chennai –600 017.
Share transfers would be registered and returned within a period of 4 weeks from the Tel : 044 - 8140801 – 808
date of receipt, if the documents are clear in all respects. Fax : 044 - 8142479
E –mail: yesbalu@iepindia.com
The Share Transfer Committee met 15 times during the year 2001-2002
As on 31.03.2002, nearly 98.6% of the total equity shares of the company are held in
Number of shares transferred during 2001-2002- 7,902 (Physical segment) (Previous demat form.
year 32,871)
11. Investor Services – Complaints Status Report
Certificates transferred 80 (Physical segment) (Previous year 345) On an average the
transfers were completed within 3 weeks from the date of receipt of documents. Nature of Complaints Received Cleared Pending
9. Registrar & Transfer Agents 2002 2001 2002 2001 2002 2001

Share Transfer / Surrender of share certificate for demat / other communications 1. Non receipt of 6 23 6 23 Nil Nil
regarding dividend, change of address and any other correspondence may be forwarded Share Certificates
2. Non receipt of 357 96 339 88 18 8
to :
Dividend Warrants
M/s. Cameo Corporate Services Ltd.,
Unit “Pentamedia Graphics Limited”
The company has attended the investors complaints within 10 days from the date of
“Subramaniam Building”,
receipt of complaints during the year 2001-2002
No.1 Club House Road, Anna Salai, Chennai – 600 002.
Tel: 044 - 8460390-394
12. Outstanding GDRs / ADRs / Warrants or any Convertible instruments, Conversion date
Fax: 044 - 846 0129
and likely impact on equity : 15.78 % GDRs
E- Mail: cameosys1@sify.com
13. Plant Location
Electronic Clearing System for receiving dividend may be availed by shareholders by
sending the filledup forms to the company or their depository participant. The blank
a) 1/162, Old Mahabalipuram Road
form has been sent to all shareholders along with the notice calling the AGM.
Thaiyur Sengammal Village
Kelambakkam, Chengai MGR District - 603 103
10. Depository System / Demat of Shares:
Tamil Nadu, India
In accordance with the directives of Securities & Exchange Board of India the equity
b) “Taurus”, No.25 First Main Road
shares of the Company are being traded only in electronic form from April 5, 1999. This
United India Colony,
facilitates faster and efficient transfer system and also reduces investors anxiety of bad
Kodambakkam
delivery / loss in transit of documents. The concept of a market lot in respect of the
Chennai - 600 024
shares stands abolished with effect from the aforesaid date.
Tamil Nadu, India
The Company has entered in agreement with NSDL & CDSL for electronic transfers
and appointed M/s. Integrated Enterprises (India) Ltd. as depository registrar at the
address mentioned below.

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 26th Annual Report 2002

14. Distribution of share holdings as on March 31, Auditors’ Certificate

No. of equity shares held 2002 2001

To
Nos. % Nos. % The Members of Pentamedia Graphics Limited
Chennai 600 024.
1 – 100 107,735 62.72 95,491 72.20
We have examined the compliance of conditions of corporate governance by Pentamedia
101 – 200 26,513 15.43 17,360 13.13 Graphics Limited for the year ended March 31, 2002, as stipulated in Clause 49 of the Listing
201-500 21,463 12.49 11,807 8.93 Agreement of the Company with stock exchanges.
501-1000 8,203 4.78 3,993 3.01 The compliance of conditions of corporate governance is the responsibility of the management.
Our examinations was limited to procedures and implementation thereof, adopted by the
1001 – 5000 6,672 3.88 3,055 2.31
Company for ensuring the compliance of the conditions of the Corporate Governance. It is
5001 – 10000 761 0.44 305 0.23 neither an audit nor an expression of opinion on the financial statements of the Company.
10001 and above 439 0.26 250 0.19 In our opinion and to the best of our information and according to the explanations given to
us, we certify that the Company has complied with the conditions of Corporate Governance
Total 171,784 100.00 132,261 100.00 as explained in the above mentioned Listing Agreement.
We state that generally no investor grievances are pending for a period exceeding one month
against the Company as per the records maintained by the Company.
15. Shareholding pattern as on March 31, 2002 We further state that such compliance is neither an assurance as to the future viability of the
Company nor the efficiency or effectiveness with which the management has conducted the
Category No. Of Shares % affairs of the Company.

For M/s. S. Viswanathan

Foreign Institutional Investors 2,021,904 2.70 Chartered Accountants
NRIs/OCBs 1,692,052 2.26
C. N. Gangadaran
Global Depository Receipt 11,824,756 15.78
Partner
Financial Institutions / Mutual Funds 1,644,343 2.20 Place : Chennai
Bodies Corporate 14,808,444 19.76 Date : 24.04.2002
Public 42,966,797 57.32

Total 74,958,296 100.00

16. Investor Query / Address for Correspondence

Investors query on the above and complaints may be addressed to Company Secretary,
Pentamedia Graphics Ltd., “Softowers”,No.1, First Main Road, United India Colony,
Kodambakkam, Chennai – 600 024. Tel: 044 - 4833067 Fax: 044 - 4830797. E-Mail:
shares@penta-media.com

Shareholders holding shares in electronic mode should address all their correspondence
to their respective Depository Participants (DP).

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 26th Annual Report 2002

SECRETARIAL COMPLIANCE REPORT FOR THE YEAR ENDED 31ST MARCH,2002 10. The moneys borrowed by the Company from directors, shareholders, public,
financial institutions, banks and others (wherever applicable) have been made in
Registration No. of the Company : 18-7142 accordance with the requirements of the Act.
Nominal Capital : Rs. 75,00,00,000 /-
11. Particulars of creation, modification and satisfaction of charges conferring security
on the Company’s property or undertaking have been filed with the Registrar as
The Board of Directors
per the requirements of the Act.
Pentamedia Graphics Limited
“Softowers”, 1, First Main Road, 12. Loans and Investments have been made by the Company in accordance with the
United India Colony, requirements of the Act.
Chennai – 600 0-24. 13. All necessary approvals of directors, shareholders, Central Government and other
authorities as per the requirements have been obtained.
I have examined the registers, records and papers of Messrs. PENTAMEDIA GRAPHICS
LIMITED (“the Company”), Chennai as required to be maintained under the Companies Act,
1956 (“the Act”) and the rules made there under and also the provisions contained in the R. SRIDHARAN
Memorandum and Articles of Association of the company (the requirements) for the year Practicing Company Secretary
ended 31st March,2002. Based on my examination as well as information and explanations Chennai
furnished by the Company to me and the records made available to me, I report that: 24.04.2002

1. The Company is a listed Company and its equity shares are listed in Chennai,
Mumbai and National Stock Exchanges in India and its GDRs at Luxembourg
Stock Exchange.
2. All the requisite Registers and other records required under the Act and Rules
made there under have been maintained in accordance with the requirements of
the Act.
3. All the requisite forms, returns and documents required under the Act and Rules
made there under have been filed with the Registrar and other authorities as per
the requirements of the Act.
4. All the requirements relating to the meetings of directors, shareholders, creditors
and others (wherever applicable) as well as relating to the minutes of the
proceedings thereof have been complied with.
5. All the appointments of directors and other officers of the Company have been
made in accordance with the requirements of the Act.
6. Due disclosures under the requirements have been made by the Company. It has
also complied with the requirements in pursuance of the disclosure made by its
directors.
7. The issue of Capital and securities is in conformity with the requirements of the
Act.
8. Certificates of shares and other securities have been issued and delivered and
the transfer and transmissions there of have been registered as per the
requirements of the Act.
9. The requirements relating to declaration and payment of dividend have not been
complied as mentioned in the Notes on Accounts of the company.

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 26th Annual Report 2002

Management discussion and analysis of financial performance and results of operations During the year, an amount of Rs. 3,382,584 thousands has been adjusted against the
capital reserve to the extent of Rs. 1,030,206 thousands and the balance of Rs. 2,352,378
Overview thousands from contingency reserve created out of Profit and Loss Appropriation Account
towards diminution in the value of investments in Pentasoft Technologies.
The financial statements have been prepared in compliance with the requirements of the
Companies Act, 1956 and Generally Accepted Accounting Principles (GAAP) in India. The
management of Pentamedia accepts responsibility for the integrity and objectivity of these 3. Fixed Assets (Gross Book Value) Rs. 000s
financial statements as well as for various estimates and judgments used therein. In addition Particulars Year ended March 31, Growth %
to the historical information contained herein, the following discussion includes forward-looking
2002 2001
statements which involve risks and uncertainties, including, but not limited to, risks inherent
in the Company’s growth strategy, dependence on certain clients, dependence on availability Land 44,721 44,721 -
of qualified technical consultants and other factors discussed in this report. Buildings 243,791 228,334 6.77
Plant and machinery 565,473 564,651 0.15
A. Financial Performance Computers 2,347,874 1,992,657 17.83
1. Share capital Digital Contents 830,420 830,420 0.00
Furniture and Fittings 16,180 15,962 1.37
March 31, 2002 March 31, 2001
Vehicles 8,981 10,902 (17.62)
Number Value Rs.000s Number Value Rs.000s
Total 4,057,440 4,057,440 10.03
Opening balance of April 1, 47,758,296 477,583 39,939,000 399,390
Issue of equity shares
on stock-swap basis - - 3,519,296 35,193 4. Investments Rs. 000s
Issue of equity shares SNo. Particulars Year of Investment
on preferential basis - - 1,000,000 10,000 investment As on 31.3.2002
1. Pentasoft Technologies (*) 1999-2000 152,848
GDRs allotted with underlying
2. Intelivision Limited 2000-2001 3,000
equity shares on 19.02.2001 - - 3,300,000 33,000
3. Kris Srikkanth Sports and
GDRs allotted with underlying Entertainment Limited 2000-2001 450,000
equity shares on 13.07.2001 12,700,000 127,000 - - 4. Mayajaal Entertainment Ltd 2000-2001 693,713
GDRs allotted with underlying 5. Media Dreams Ltd. 2000-2001 615,936
equity shares on 11.02.2002 14,500,000 145,000 - - 6. Improvision Corporation Inc, U.S.A. 2000-2001 920,700
7. NumTV Limited, Mauritius 2000-2001 198,254
Closing balance as of March 31 74,958,296 749,583 47,758,296 477,583
Total 3,034,451
During the year 2001-2002 Company’s issued and paid-up capital was increased from
Rs.477,583 thousands to Rs.749,583 thousands, resulted in increase of Rs. 272,000 (*) The amount shown is after providing a provision for Diminution in value of
thousands of additional capital. The additional shares were issued for GDRs with investment.
underlying equity shares for cash for working capital purposes.
During the year, the Company has transferred its investments in Pentamedia
2. Reserves and surplus Corporation, Animasia International Pte Ltd, Purple Drop, Pentamedia Dubai to
Num TV Limited, Mauritius as per the approval of the Reserve Bank of India.
The addition to the share premium account of Rs. 1,608,200 thousands during the
year, is due to the premium received from issue of 12,700 thousands and 14,500 Also during the year the Company has sold 200,000 equity shares of
thousands of Global Depository Receipt’s at a premium of Rs.61.10 per share and M/s. Padmalaya Telefilms Limited which was acquired during 2000 – 2001.
Rs.57.56 per share respectively.
Intelivision Limited was a subsidiary of Pentamedia till 17th September 2001.

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 26th Annual Report 2002

5. Sundry debtors 8. Current liabilities

Sundry debtors amounts to Rs. 2,911,598 thousands (net of provision for doubtful debts Current Liabilities as at 31st March 2002 stands at Rs. 253,353 thousands as against
amounting to Rs. 100,000 thousands) as at March 31, 2002 as compared with Rs. 1,395,354 thousands as at 31st March 2001. Sundry creditors for goods represent
Rs. 2,710,042 thousands (net of provision for doubtful debts amounting to Rs. 100,000 the amount payable to vendors for the supply of goods and services. Other liabilities
thousands) as at 31st March 2001. The age profile is given below: includes amount due to Pentafour Employee Welfare Foundation of Rs 67,224
Rs. 000s thousands which is the balance of advance paid against ESOP which has subsequently
Period in days Year ended March 31, been cancelled.
2002 2001 9. Unearned Revenue
0-180 days 904,244 2,700,464
Unearned revenue as at March 31, 2002 and 2001 consists primarily of advances
More than 180 days 2,007,354 9,578
received from clients on fixed-price, fixed-time-frame contracts and subscriptions
Total 2,911,598 2,710,042
received from subscribers for which risks or rewards / are yet to be passed onto the
client / subscribers services.
Provision for bad and doubtful debts and bad debts written off as a percentage of sales
were 2.25% 10. Provisions
6. Cash and bank balances
Rs. 000s Provisions for taxation represent estimated income tax liabilities after set off advance
tax payments. Proposed dividend represent the final dividend recommended to the
Period in days Year ended March 31, shareholders by the board of directors, and would be paid after the Annual General
Meeting, upon approval by the shareholders.
2002 2001
Cash balances 155 144
B. Operational Results
Bank Balances in India
- Current accounts 23,017 24,930
- Deposit accounts 560,301 1,626,696 1. Income
- Margin accounts 8,517 8,499 Rs. 000s
Bank balances-overseas Particulars Year ended March 31, 2002 Year ended March 31, 2001
- Current accounts - 8 Amount % Amount %
- Deposit accounts - 820,218 Sales & Services
Total cash and cash equivalents 591,990 2,480,495 Overseas 4,307,789 93.27 5,256,804 92.20
Cash and cash equivalent as Domestic 109,386 2.37 266,987 4.68
a % of total assets 4.81 % 16.31 % Total Sales & service 4,417,175 95.64 5,523,791 96.88
Other Income 201,618 4.36 177,786 3.12
The bank balances in India include both rupee accounts and foreign currency accounts. Total Income 4,618,793 100.00 5,701,577 100.00
The deposit accounts represents deposits for short tenures. The bank balances in
overseas deposit accounts represents deposit of money received out of internal accruals. For the year ended 31st March 2002, the Company has posted a turnover of Rs.
4,417,175 thousands as against Rs. 5,523,791 thousands for the year ended 31st March
7. Loans and advances
2001 which represents a drop in turnover of 25%. For the year ended 31st March 2002,
Films, TV and Multimedia have contributed Rs. 1,788,072 thousands, Rs. 1,072,048
Loans and advances as at 31st March 2002 stands at Rs. 1,658,639 thousands as
thousands and Rs. 1,557,055 thousands respectively.
against Rs. 1,111,481 thousands as at 31st March 2001. The increase is mainly
attributable to the loan given by the Company to its Subsidiary M/s. Animasisa
International Pte Ltd a sum of Rs. 314,872 thousands. Advance recoverable in cash
or kind or value received to be received, are primarily towards amounts paid in advance
to value and services to be received in future.

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 26th Annual Report 2002

2. Expenditure 2.2 Administration and other expenses Rs. 000s

Rs. 000s
Particulars Year ended March 31
Particulars Year ended March 31, 2002 Year ended March 31, 2001 2002 2001
Amount % Amount % Amount % Amount %

Material,Multimedia Development Power and fuel 21,169 0.75 21,101 0.59

& Webcasting expenses 2,653,163 60.06 3,113,272 56.36 Rent 5,471 0.19 4,084 0.11
Travelling and conveyance 4,779 0.17 18,118 0.50
Administration and other expenses 186,970 4.23 478,739 8.67 Rates and taxes 6,191 0.22 5,934 0.17
Interest and finance charges 255,404 5.78 13,387 0.24 Insurance 1,108 0.04 3,785 0.11
Repairs and maintenance
Depreciation 541,883 12.27 529,156 9.58 -Buildings 4,158 0.15 7,054 0.21
Provision for taxation (6,121) (0.14) 31,525 0.57 -Plant and Machinery 4,923 0.17 4,546 0.13
Profit after tax 987,494 22.36 1,535,498 27.80 -Others 2,122 0.07 7,530 0.21
Advertisement 28,538 1.00 32,428 0.87
Printing and stationery 6,426 0.23 7,760 0.22
2.1 Materials and Multimedia Software Development Expenses Telephone and postage 10,779 0.38 13,753 0.38
Rs. 000s Legal and professional charges 5,990 0.21 34,831 1.50
Auditor’s Remuneration
Particulars Year ended March 31, 2002 Year ended March 31, 2001 -Audit fees 525 0.02 1,000 0.04
Amount % Amount % -Tax audit 100 0.00 100 0.00
-Other services - 0.00 3,625 0.10
Materials 16,296 0.57 16,274 0.45 -Out of pocket expenses 237 0.01 300 0.00
Salaries, Allowances and Incentives 119,720 4.04 146,155 4.07 Lease rent 19,073 0.67 58,254 1.62
Contribution to provident fund and Provision / write off of
other fund 6,942 0.24 11,128 0.30 doubtful / bad debts 50,000 1.76 35,000 0.99
Staff welfare expenses 5,208 0.18 6,754 0.18 Bad debts written off 2,988 0.11 - -
Research and development
Multimedia software expenses 4,890 0.17 6,137 0.18
consultancy services 5,218 0.18 50,502 1.40 Director’s sitting fees 165 0.01 88 -
Multimedia Development Expenses 3,099,900 109.15 2,632,457 73.28 Commission and Brokerage 5,917 0.21 161,637 4.60
Consumables 4,249 0.15 7,236 0.20 Provision for bad and doubtful debts - 0.00 30,487 0.85
Bandwidth Charges 20,395 0.72 116,282 3.23 Loss on Sale of Fixed
Royalty 12,373 0.44 32,236 0.89 Assets / Investments 3,748 0.13 - -
Numtv contents 990 0.03 31,165 0.86 Miscellaneous expenses 2,563 0.09 21,187 0.59
Recording Broadcasting charges 12,575 0.44 32,875 0.91 Total 191,860 6.76 478,739 13.33
Computer maintenance charges 433 0.02 1,430 0.03 Note : % refers % to Total Expenses excluding interest, depreciation and tax.
Travelling and conveyance 7,467 0.26 22,544 0.62
Accretion to jobs in progress – Consumption of power and fuel increased due to increase in production of CD Rom.
Legal and professional charges decreased by 83%. For the year ended March 31,
MultiMedia Software Development (658,603) (23.19) 6,234 0.17 2002, a further provision of Rs. 50,000 thousands has been provided towards provision
Total 2,653,163 93.24 3,113,272 86.67 for bad and doubtful debts. Loss on sale of fixed assets and investments represents
sale of used cars and 200,000 equity shares in Padmalaya Telefilms. Lease rent for
the year ended 31st March 2002 is Rs. 19,073 thousands as against Rs. 58,254
Foreign travel expense has come down from Rs. 22,544 thousands last year to thousands for the year ended 31st March 2001. This is mainly because that some of the
Rs. 7,467 thousands this year. This is due to large portion of the contract being carried leases were closed during the year.
out offshore compared to last year. Foreign travel has come down as functional heads 3. Operating profits
were appointed in various overseas offices.
During the current year, the Company earned an operating profit (profit before interest,
depreciation and tax) of Rs 1,778,660 thousands representing 40.27% of total revenues
as compared to Rs.2,109,566 thousands representing 38.19% of total revenues during
the previous year. The drop in profit was due to the shift from projects to products by the
company.

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