DIRECTORS' REPORT

To,

The Members,

B.A.G. Films and Media Limited

The Directors have pleasure in presenting the 22nd Annual Report on the business and operations of the Company together with Audited Financial Statements for the financial year ended on March 31, 2015

RESULTS OF OPERATIONS/ STATE OF COMPANY'S AFFAIRS

During the year under review, the total income from operations of the company was Rs. 3237.73 lacs against Rs. 5881.45 lacs during the previous financial year. The Company recorded a net loss of Rs. 1253.43 lacs against net loss of Rs. 859.50 lacs during the previous financial years.

Television Software:

Your Company plans to create and deliver popular, high quality programming for catering to not only domestic but also to the demands of international viewership and expects to earn high returns for the stakeholders. Your Company also leveraged content creations and made optimum use of internal resources and its infrastructure. Your company gave significant impetus to international business regarding healthy growth in export.

Media Education

Your Company has earned royalities for its Media education brand ISOMES (International School of Media & Entertainment Studies). ISOMES is offering full time graduate courses in Broadcast Journalism under the aegis of B.A.G. Films Media Education Society

Broadcasting

News24, a 24 hours National Hindi free to air Hindi news channel operating through its subsidiary News24 Broadcast India Limited, has consistently maintained healthy market share in Hindi News Genre News24 and is available throughout India on cable and DTH platforms.

News 24, Hindi news channel is also available throughout West Asia and the MENA Region on DU network.

E24 a 24 hours Bollywood Entertainment channel of your Company operating through its subsidiary E24 Glamour Limited, pitched as Bollywood's channel managed to attract audience of all age groups and succeeded in creating a new genre in television entertainment.

E24, now available throughout west asia and the MENA region on DU network has gained popularity in International market too.

Darshan24: Darshan24 is the new age devotional channel which has been designed for all age groups. The Channel endeavors to bring the masses close to the roots of our Indian culture and its diverse religion in order to teach and preach the new generation our long age tradition and customs.

It is the source of all wisdom, the home of all knowledge, focusing on the elevation and awakening of the soul, the enhancement of the power within us. Channel is dedicated to the Indian Philosophy, Religion, Spiritual solidarity, Culture and dissemination of the vast and timeless knowledge of the great "Sanatana Dharma" to the people of the world.

Radio

Your Company has 10 FM Radio stations operating in the brand name 'Dhamaal24' at 106.4 FM under its subsidiary Skyline Radio Network Limited (formerly known as Dhamaal24 Radio Network Limited) in the cities of Hissar, Karnal, Patiala, Shimla, Muzaffarpur, Ranchi, Jabalpur, Jalgaon, Dhule and Ahmednagar.

106.4 FM Radio Dhamaal24 -Har Khushi hai Jahan is a hybrid FM Channel bringing to the listeners life in all manifestations. Dhamaal24 is a channel with a slice of life and approach to the infotainment & entertainment programming.

CHANGE IN NATURE OF BUSINESS IF ANY

There was no change in the nature of Business of the Company during the financial year ended March 31, 2015.

DIVIDEND

The Directors express their inability to declare any dividend for the financial year ended March 31, 2015 on account of losses incurred during the year under review. The Company has not made any transfer to General Reserve.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR  EDUCTION AND PROTECTION FUND

Pursuant to the erstwhile provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on or before the prescribed due dates, to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 25.06.2014 (date of last Annual General Meeting) on the Company's website www. bagfilms.com and also on the Ministry of Corporate Affairs' website.

In terms of Section 125 of the Companies Act, 2013, unclaimed or unpaid dividend relating to the financial year 2007-08 is due for remittance on or before 23.10.2015 to the Investor Education and Protection Fund. Details of transfer of funds to IEPF during the FY 2014-15 are given herein below:-

DIRECTORS

There are 4 Directors on the Board of your Company, comprising of 2 Independent Directors, 1 Non-Executive Director and a Chairperson cum Managing Director (CMD).

Women Director

Your Company is in compliance with the provisions of section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, which prescribe the requirement of at least one Women Director on the Board of the Company. The Board of the Company, besides Ms. Anurradha Prasad, as the Chairperson cum Managing Director has 2(two) women Independent Directors, viz. Dr. Anuradha Mishra and Ms. Urmila Gupta.

Independent Directors

In terms of Clause 49 of the Listing Agreement, entered into with the Stock Exchanges and Section 149(6) of the Companies Act, 2013 and based on the confirmation/ disclosures received from the Directors. The Board comprises following Non-Executive Independent Directors:

1. Dr. Anuradha Mishra

2. Ms. Urmila Gupta

Declaration by Independent Directors

The Independent directors have submitted their declaration of Independence, as required under to section 149 (7) of the Companies Act, 2013, confirming that they meet the criteria of independence as provided in sub section (6).

Appointments/ Resignations from the Board of Directors

Ms. Urmila Gupta was appointed as Independent Director by the Members at the last Annual General Meeting of the Company held on 25 June 2014 for a term of 5(five) years.

Mr. Prem Behl, Independent Director of the Company resigned from the Board with effect from November 5, 2014. The Board places on record its appreciation for the outstanding contribution made by Mr. Behl during his tenure as the Director of the Company.

Appointments/ Resignations of the Key Managerial Personnel

Ms. Anurradha Prasad, Chairperson cum Managing Director, Mr. Ajay Jain, Chief Financial Officer and Mr. Rajeev Parashar, Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013. Ms. Anurradha Prasad, Chairperson cum Managing Director and Mr. Rajeev Parashar, Secretary have been holding the respective position of the Company before the commencement of the Companies  Act, 2013.

The Board of Directors of the Company at their meeting held on February 12, 2015 re-appointed Ms. Anurradha Prasad as Chairperson cum Managing Director, subject to the approval of Shareholders for further period of 5(five) years with effect from  April 1, 2015.

The Board of Directors of the Company at their meeting held on May 29, 2015 appointed Mr. Ajay Jain as Chief Financial Officer of the Company.

Directors Retiring by Rotation

In accordance with the provisions of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Sudhir Shukla retires by rotation and is eligible for re-appointment.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committees and Stakeholders Relationship Committee .

Familiarization programmes for Board Members

The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices.

Periodic presentations are made at the Board and Committee Meetings thereof, on business and performance updates of the Company along with business strategy. Detailed presentations on the Company's business were made before the Board members as a part of familirisation programme for effective policy and decistion making.

Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year 4 (four) Board Meetings and 4 (four) Audit Committee Meetings were convened and held, the details whereof are provided in the Corporate Governance Report of this Annual Report.

The intervening gap between the Meetings was within the time limit prescribed under the Companies Act, 2013 read with the Listing Agreements with the Stock Exchanges.

Composition of Committees of the Board of Directors

The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas/activities which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by members of the Board. The terms of reference of Board Committees are determined by the Board from time to time.

At present there are following five Committees of the Board:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Risk Management Committee

4. ESOP Compensation Committee

5. Nomination and Remuneration Committee

In addition, the Board is also empowered to constitute specific committees, from time to time, depending on the business exigencies, and simultaneously dissolves such Committees, that are no longer required. The terms of reference of the Committees are reviewed and modified by the Board from time to time. Meetings of each Committee are convened by the respective Committee Chairman. The Company Secretary prepares the agenda and explanatory notes, in consultation with the respective Committee Chairman and circulates the same in advance to all the members. Every member is free to suggest inclusion of item(s) on the agenda. Minutes of the Committee meetings are approved by the respective Committee and thereafter placed before the Board. The detail of Committees are provided in Corporate Governance Report of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, it is hereby confirmed that:-

a) in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a  true and fair view of the state of affairs of the Company as at March 31, 2015 and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts for the financial year ended March 31, 2015 of the Company on a 'going concern' basis.

e) that proper internal financial controls are in place and that the financial controls are adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were and that such system were adequate and operating effectively.

INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JV

There are four subsidiary companies out of which one is Wholly Owned Foreign Subsidiary. During the year, BAG Infotech Private Limited and BAG Live Entertainment Limited ceased to be associates.

The Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies, are not being attached with the Balance Sheet of the Company. Salient features of Financial Statements of Subsidiaries in the prescribed format, form part of this Financial Statements. However, the financial statements of the subsidiary companies are available on the website of the company. The Company will provide on demand a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Policy for determining material subsidiaries may be accessed under Invester section on the Company's website www.bagfilms.com .

Consolidated Financial Statements

The Consolidated Financial Statements of subsidiary Companies in terms of Section 129(3) of the Companies Act,  2013 read with Rule 6 of the Companies (Accounts) Rules,

2014 are prepared in accordance with the Companies relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT- 9 is annexed herewith as Annexure I.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Your Company is not engaged in any manufacturing or processing activity, as such particulars required to be given in terms of Section 134 (3) (m) of the Companies Act, 2013 read alongwith Companies (Accounts) Rules, 2014, regarding conservation of energy and technology absorption are not applicable.

During the year, your Company has incurred expenditure in foreign currency to the extent of Rs. 5,380,347/- as against Rs. 2,303,219 in the previous financial year 2013-2014 and earned  Rs.1,328,53,055 (previous year Rs. 739,18,820).

SIGNIFICANT AND MATERIAL ORDERS

There were no significant or material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls with reference to financial statements, being examined by the management and internal auditors with the size, scale and complexity of its operation. To maintain its objectivity and independence, the Internal Financial Audit functions reports to the Chairman of the Audit Committee of the Board. During the year, no reportable material weaknesses in the design or operation were observed.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RISK MANAGEMENT POLICY

In accordance with the requirements of the Companies Act, 2013 and Listing Agreement towards Company has adopted Risk Management Policy, approved by Board and established a risk management framework to identify, mitigate and control the risk and threat. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments .Risk management forms an integral part of the Company's Mid-Term Planning cycle. The key business risks identified by the Company and its mitigation plans are as under:

Project Risks:

The Media and Entertainment Industry is capital intensive in nature. According to a report on M & E Industry Indian market is poised to grow at a CAGR of 13.9 per cent, to grow from INR1026 billion in 2014 to reach INR1964 billion by 2019, a growth rate that is almost double that of the global media and entertainment industry. In the execution of large projects which are highly capital intensive in nature, there could be exposure to time and cost overruns. To mitigate these risks, the project management team and the project accounting and governance framework has been further strengthened.

Competition Risks:

The Media and Entertainment Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience and its created capacities to increase market share, enhance brand equity / visibility and enlarge product portfolio and service offerings. It would also leverage on its Infrastructure, Commercial and Institutional Sales team to offer value to customers. The Company tapping international market to beat local competition.

Occupational Health and Safety Risks:

Safety of employees is of utmost importance to the Company. To reinforce the safety culture in the Company, it has identified Occupational Health & Safety as one of its focus areas.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposit under section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Company believes in voluntary comitment Corporate Social Responsibility initiatives, through the said provisions are not applicable. However, once the said provisions are applicable, the Company shall report the same in the coming years and shall submit the relevant report on such applicability.

NOMINATION & REMUNERATION POLICY

The Company has constituted a Remuneration Committee of Directors in compliance with provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement as amended from time to time. During the year under review, the nomenclature of Remuneration Committee was changed to "Nomination and Remuneration Committee" as required under the provisions of Section 178 of the Companies Act, 2013 and revised Clause 49 of the listing agreement (effective October 1, 2014), related to Corporate Governance, entered into with the Stock Exchanges.

The Remuneration policy of the Company is a comprehensive policy which is competitive, in consonance with the industry practices. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance against set objectives.

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure II and forms part of this Report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. In accordance with the requirements of Listing Agreement, the Company has also adopted the Policy on Related Party Transaction and the same has been uploaded on the website of the company.

The particulars of every contract and arrangement entered into by the Company with related parties referred to in sub­section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto are disclosed in Form No. AOC -2 in Annexure III and form part of this Report.

The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

VIGIL MECHANISM

The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior and to meet the objective, it has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the company's code of conduct or ethics policy to the Audit Committee. There is no restriction for reporting any such occurrence and all the employees have uninterrupted access for reporting their concern in confidence to the Audit Committee.

The details of the Whistle Blower Policy are posted on the website of the Company at www.bagfilms.com

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

M/s. Joy Mukherjee & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office till the  conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Certificate from the Auditors have been received to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

Qualification in Auditors reports

All observations made in the Independent Auditors' Report are self explanatory and suitably addressed in the Notes forming part of the Financial Statements and do not call for any further comments. The Company is in the regime of unqualified financial statements.

The Internal Auditor directly reports to the Audit Committee.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Balika Sharma & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure IV to this Report.

LISTING

The equity shares of the Company are listed with National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and *Delhi Stock Exchange Limited (DSE). There are no arrears on account of payment of listing fee to the Stock Exchanges.

*SEBI vide its Order No. WTM/PS/45/MRD/DSA/NOV/2014 dated 18.11.2014, has withdrawn recognition granted to DSE.

CORPORATE GOVERNANCE

The Report on Corporate Governance together with the Certificate from Statutory Auditors of the Company regarding the Compliance of conditions of Corporate Governance by the Company as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of the Board Report.

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements.

The Certificates from CMD/CFO inter-alia confirming the correctness of the financial statements, compliance with Company's Code of Conduct, adequacy of Internal Control measures and reporting of the matters to the Audit Committee in terms of Clause 49 of the Listing Agreement is attached in Corporate Governance Report and forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement is provided separately and forms part of this Annual Report.

CODE OF CONDUCT

The Company has in place a comprehensive Code of Conduct (the Code) modified from time to time as prescribed under the Listing Agreement, applicable to Directors, Independent Directors and Senior Management Personnel. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company. A copy of the Code has been put on the Company's website www.bagfilms.com . The Code has been circulated to Directors and Senior Management Personnel, and its compliance is affirmed by them annually.

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company in compliance with the SEBI Insider Trading Regulation. The Securities and Exchange Board of India ("SEBI") vide Notification No. LAD-NRO/GN/2014-15 dated 15th January, 2015 has introduced new regulation to put in place a framework for prohibition of insider trading in securities and to strengthen the legal framework viz. SEBI (Prohibition of Insider Trading) Regulations, 2015.

In compliance with the SEBI Regulations, the existing Code of Conduct which was formulated under erstwhile regulation has been replaced with the new Code of Conduct, viz. "Code of conduct for trading by insiders" pursuant to Regulation 9 of the SEBI Regulation. Besides, the Company has also formulated code of fair disclosure of Unpublished Price Sensitive Information in addition therewith pursuant to Regulation 8 of the SEBI Regulations. These codes are applicable to Directors/officers/ connected person/designated employee of the Company and their immediate relatives. Both these codes have been made effective retrospectively from 15th day of May 2015.

PREFRENTIAL ALLOTMENT

Convertible Warrants

Your company issued and allotted 80,000,000 warrants, to eligible allottees under promoter/non- promoter group company on Preferential Basis with an option to get allotted one equity share per warrant before expiry of eighteen months from the date of allotment, pursuant to section 42 and 62 of the Companies Act, 2013 as per the approval accorded by the Members of the Company at the 21st Annual General Meeting held on June 25, 2014. In the first tranche 8,500,000 warrants of Rs. 2/- each at a price of Rs. 3.40/- per share ("conversion price" including a premium of Rs. 1.40/- per share) were converted into equal number of equity shares of Rs. 2/- each during the

FY 2014-15 and listing and trading permission for these shares have been duly obtained from the respective Stock Exchanges

The paid up Equity Share Capital as on March 31, 2015 was Rs. 357,436,180/- (including calls in arrear of Rs. 170,341/-).

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled there to, excluding the information on employees' particulars which is available for inspection by the Members at the registered office of the Company during business hours on working days of the company up to the date of the ensuing Annual General Meeting. Any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in this regard.

The ratio of the remuneration of each Director to the median employee's remuneration and other details in term of subsection (12) of section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of this report at Annexure V.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thanks Central and State Government Departments, organizations and agencies for the continued help and co-operation extended by them.

Your Directors also gratefully acknowledge all stakeholders of the Company viz. viewers, producers, vendors, members, stock exchanges, Auditors, depositories, consultants, dealers, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board of Directors

B.A.G. Films and Media Limited

Anurradha Prasad

Chairperson cum Managing Director

(DIN: 00010716)

Date: May 29, 2015

Place: Noida