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Directors Report of Encash Entertainment Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Seventh Annual Report of your Company along with Audited Statement of Accounts for the financial year ended 31 March, 2015.

1. FINANCIAL SUMMARY OF THE COMPANY

The Financial Performance of your Company for the year ended 31 March, 2015 is summarized below :

(Amount in Rs. Lacs)

Particulars 31st March, 2015 31st March, 2014

Total Income 184.72 210.75

Profit/(Loss) Before 8.45 (7.58) Depreciation & Tax

Less : Depreciation 4.21 3.48

Profit/(Loss) Before Tax 4.24 (11.06)

Less : Tax Expenses 1.70 0.17

Profit/(Loss) For The Year 2.54 (11.23)

Add : Balance as per Last (10.32) 0.91 Financial Statements

Surplus/(Deficit) in the (7.78) (10.32) Statement of Profit and Loss

2. STATE OF COMPANY'S AFFAIR :

a. TURNOVER :

The Company had achieved trading turnover of Rs. 164.06 Lacs during the financial year compared with Rs. 101.59 Lacs during the last financial year, increase of 61.48%.

zb. BUSINESS SPHERES :

Your Company operates dynamically in two spheres :

* Film Production :

Encash has produced a film named ANJALI (Working Title) under the direction of Miss Swati Ganguly which went on floor from 18.02.2015 and ICCHE PURTI (Working Title) under the direction of Mr. Soumitri Sankar Ghosh which went on floor from 10.05.2015.

* Style & Fashion :

The Company started its new designer garments showroom under the brand name ENCASH FASHION since January 2015.

c. EXPORLING NEW BUSINESS SEGMENT :

The Company is planning to start Studio Segment for post production of films covering EDITING, DUBBING, SOUND & SOUND MIXING, BGM, DI, CC, PORTFOLIO and CHROMA. The Studio space had already been identified and is under negotiation.

3. CHANGES IN NATURE OF BUSINESS :

There has been no change in nature of business of the company during F.Y 2014-2015.

4. DIVIDEND :

In view of the planned business growth, yours Director's deem it proper to reserve the resources of the Company for its activities and therefore, propose to recommend a dividend of 0.25% for the year 2014- 15 in respect of 3,896,496 equity shares of Rs. 10 each in the Company, which will be paid out of the undistributed profits of previous financial year pursuant to the provisions of Section 123 of the Companies Act, 2013.

5. SHARE CAPITAL :

The paid up Equity Share Capital as on 31st March, 2015 stood at Rs. 3,89,64,960/-. During the year under review, the company had issued 10,98,000 Equity Shares of Rs. 10/- each at a premium of Rs. 30/- each on 25th September, 2014, rank pari-passu with the existing equity shares.

6. TRANSFER TO RESERVES :

No amount was transferred to the reserves during the financial year ended 31st March, 2015.

7. DIRECTORS & KEY MANAGERIAL PERSON :

DIRECTORS :

Your Board comprises of 4 Directors including 2 Independent Directors. Independent Directors provide their declarations both at the time of appointment and annually confrming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Clause 52 of the Listing Agreement. During Financial Year 2014-2015 your Board met 7 (seven) times details of which are available in Corporate Governance Report annexed to this report.

KEY MANAGERIAL PERSONNEL :

During the year Mr. Ashish Agarwal who was appointed as Chief Financial Officer on 5th October, 2013 had resigned from the Company w.e.f. 20th March, 2015.

The Company had proposed to appoint Ms. Suman Saraf as new Chief Financial Officer of the Company from 29.05.2015. The same is subject to the approval in the forthcoming annual general meeting.

The following employees were designated as whole-time key managerial personnel by Board of Directors during the year 2014-15, pursuant to section 203 of Companies Act, 2013 and rules made thereon :

1. Mr. Sachet Saraf - Managing Director

2. Ms. Hardika Pancholi - Company Secretary & Compliance Officer

3. Mr. Ashish Agarwal - Chief Financial Officer

8. NUMBER OF MEETINGS OF THE BOARD :

The company has duly complied with the section 173 of the Companies Act, 2013. During the year under review, 7 (seven) meetings of the Board were convened and held. The maximum interval between any two meetings did not exceed 120 days. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

9. RISK MANAGEMENT POLICY :

Your Company actively stimulates entrepreneurship throughout the organization and encourages its people to identify and seize opportunities. The current economic environment, in combination with significant growth ambitions of it, carries an evolving set of risks. Encash recognizes that these risks need to be managed to protect its customers, employees, shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. Risk and opportunity management is therefore a key element of the overall Encash strategy. This section provides an overview of the key strategic risks, Encash's risk and control framework, and its approach to risk management.

10. Details of Subsidiary/Joint Ventures/Associate Companies

Your Company has neither a Subsidiary Company nor a Joint Venture Company during the year under review. Associate companies details are as under :

Name of the Company % shareholding of EEL Status

Encash Securities Ltd 25.69% Associate

11. BOARD EVALUATION :

Pursuant to the provisions of section 134 of the Companies Act, 2013 and clause 52 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI").

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

According to clause 52 of Listing Agreement and as per provisions of Companies Act, 2013 read with rules and schedules thereon, a meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

The Nomination & Remuneration Committee is of the view that board is versatile and diversified all members have vast exposures which enhances the integrity of the company.

12. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS :

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report.

13. AUDITORS : STATUTORY AUDITORS :

The Statutory Auditors M/s. Jyoti K Agarwal & Associates, Chartered Accountants, Kolkata, having Firm Registration No. 325111E, holds office until the conclusion of the ensuing Annual General Meeting and is eligible for reappointment.

Your Company has received confirmation from the Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules, 2014. Your Board is of the opinion that continuation of M/s. Jyoti K Agarwal & Associates, Statutory Auditors during FY 2015-16 will be in the best interests of the Company and therefore, Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till next Annual General Meeting at remuneration as may be decided by the Board.

SECRETARIAL AUDITOR :

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) rules, 2014, the Company has appointment Ms. Manjula Poddar, a Company Secretary in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure I.

INTERNAL AUDITOR :

Pursuant to the provision of section 138 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014 the Company has appointed M/s. A M Banka & Co. to undertake the Internal Audit of the Company for the F.Y. 2014-2015. There stood no adverse finding & reporting by the Internal Auditor in the Internal Audit Report for the year ended 31st March, 2015.

AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT :

The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report.

14. CORPORATE SOCIAL RESPONSIBILITY :

The Company had not taken any initiatives on the activities of Corporate Social Responsibilities as the provision relating to the same are not applicable to the company.

15. EXTRACT OF ANNUAL RETURN :

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure II in the prescribed Form MGT-9, which forms part of this report.

16. MATERIAL CHANGES :

There have been no material changes and commitments affecting the financial position of the company, which have occurred since 31st March, 2015, being the end of the Financial Year of the Company to which financial statements relate and date of the report.

17. COMITTEES :

With a view to have a more focused attention on business and for better governance and accountability, and in accordance with the Companies Act, 2013, your Board has the following mandatory committees viz. Audit Committee, Stakeholders Relationship Committee and Nomination and Remuneration Committee. The details of the committee with terms of reference along with composition and meeting held during the year are provided in the Report on Corporate Governance, a part of this Annual Report.

AUDIT COMMITTEE :

The Audit committee acts as a link between the statutory and internal auditors and the Board of Directors its purpose is to assist the Board in fulfilling the oversight responsibilities of monitoring financial reporting processes, reviewing the company's established systems and processes for internal financial control, governance and reviewing the Company's statutory and internal audit activities. The committee is governed by its terms of reference which is in line with the regulatory requirements mandated by the Companies Act, 2013 and clause 52 of the Listing Agreement and disclosed in the Corporate Governance report.

Further the Board has recorded all the recommendations of the Audit Committee and accordingly has proceeded with their recommendations.

VIGIL MECHANISM / WHISTLE BLOWER POLICY :

Your company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment and unfair treatment. The company has adopted a Whistle Blower policy to establish a vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or ethics policy.

NOMINATION AND REMUNERATION COMMITTEE :

Pursuant to section 178 of companies Act, 2013 and clause 52 of Listing Agreement, the company has renamed its existing Remuneration Committee as Nomination & Remuneration Committee under the new provisions and revised the terms of reference accordingly. The details of terms are disclosed in the Corporate Governance Report.

The Nomination & Remuneration Committee has revised its existing remuneration policy and framed it as per section 178(3) of Companies Act, 2013 and clause 52 of Listing Agreements. The policy of the company on remuneration of Directors, KMPs and other employees and appointment of Director including criteria for determining the qualification, experience positive attributes and independence of directors was recommended to board and was duly approved. The summary of the Remuneration policy is stated in the corporate governance report.

STAKEHOLDER RELATIONSHIP COMMITTEE :

Pursuant to section 178(5) of Companies Act, 2013 and clause 52 of Listing Agreement, the company has renamed its existing Investor/Shareholder Grievance Committee as Stakeholders Relationship Committee and revised the terms of reference accordingly. The details of terms is disclosed in the Corporate Governance Report, which forms a part to the Annual Report.

18. CHANGES IN ACCOUNTING POLICY :

The Company has changed the method of computation of depreciation of fixed assets to comply in accordance with the provisions of Schedule II of Companies Act, 2013. The same have resulted in additional depreciation of Rs. 125,785/-.

19. SIGNIFICANT AND MATERIALS ORDERS PASSED BY THE REGULATORS OR COURT TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE :

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

20. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY :

The company has policy for Internal Financial Control System, commensurate with the size, scale and complexity of its operations. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The scope and authority of the Internal Audit function is defined in the Internal financial control policy. The Internal Auditor monitors and evaluates the efficiency and adequacy of Internal Financial control system in the company, its compliance with operating systems, accounting procedures and policies. To maintain its objectivity and independence, the internal auditor reports to the Chairman of the Audit Committee of the Board, the internal audit report on quarterly basis and some are reviewed by the committee. The observation and comments of the Audit Committee are placed before the board.

The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

21. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS :

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

22. DEPOSITS :

The said clause is not applicable and the company does not accept any deposits. The board of directors has duly passed a resolution in their meeting giving effect to the aforesaid statement.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is disclosed in Form No. AOC -2, as annexed herewith as Annexure III.

24. 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 reports and accounts are being sent to the members and others entitled thereto, 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 ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance

25. CORPORATE GOVERNANCE REPORT :

Pursuant to clause 52 of the Listing Agreement with the Stock Exchange, the report on Corporate Governance and Management Discussion & Analysis forms part of the Annual Report. The Certificate from Auditor of the company confirming compliance with the conditions of Corporate Governance as stipulated under clause 52 also constitute an integral part of the Annual Report.

26. DISCLOSURE ON POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT :

The company has adopted the policy on redressal of Sexual and Workplace harassment as per the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013 ["Sexual Harassment Act"]. The Company believes that it is the responsibility of the organization to provide an environment to its employee which is free of discrimination, intimidation and abuse and also to protect the integrity and dignity of its employees and also to avoid conflicts and disruptions in the work environment. Further there stood no cases filed during the year under review.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO :

Since the Company does not own any manufacturing facility, the requirements pertaining to disclosure of particulars relating to conservation of energy, technology absorption and foreign exchanges earning and outgo, as prescribed under the Companies Rules, 1988, are not applicable.

28. LISTING WITH STOCK EXCHANGES :

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE where the Company's Shares are listed.

29. DIRECTORS' RESPONSIBILITY STATEMENT :

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that :-

a. In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

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 profit 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 on a 'going concern' basis;

e. The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

30. LEGAL AND OTHER INFORMATION, NOT AFFECTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE :

Your company has filed a civil suit at the Hon'ble High Court at Kolkata, against Mr Rakesh Singh and others for protection for our copyrights in respect of bengali feature film 'Ichhe'. Mr. Rakesh Singh has entered in to an agreement dated 8th June, 2011 with ourselves, assigning entire copyrights of Bengali colour film 'Ichhe'. The film as released on 15th July, 2011 at several cinema halls in and around Kolkata, infringing our copyrights and violating the terms of captioned agreement. We have sought relief by restraining respondents to infringe copyrights, injunction to keep custody of negative etc., transfer of the negative etc. in our favour, injunction render accounts from exploitation of such movie and its audio rights, injunction to restraining respondent to receive any benefit from that movie, handling over the distributor's share to our favour, court receiver to be appointed for collection etc.

Hon'ble High Court at Kolkata vide its order dated 8th September, 2011 granted an order of injunction restraining the first and second defendants from realizing or appropriating and part of the proceeds arising out of the exhibition of the cinematograph film 'Ichhe'. The third defendant is injuncted from dealing with or disposing of or encumbering or exploiting the satellite and television rights relating to the film in any manner without the previous leave of court.

Hon'ble High Court at Kolkata vide its order dated 8th September, 2011 appointed Mr. Arindam Sinha advocate as receiver for the purpose of collecting all proceeds arising out of the exhibition of the cinematograph film 'Ichhe' from all the exhibitors (Cinema Halls).

31. ACKNOWLEDGEMENTS :

Your Directors take the opportunity to thanks the Regulators, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the company viz. customers, members, vendors, banks and others 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 of the company.

For and on behalf of the Board of Directors

Sachet Saraf CMD Place : Kolkata DIN - 01377285 Date : 29.05.2015 Signing as per Board Resolution passed



 
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