Mar 31, 2018
To,
The Members
Eros International Media Limited Mumbai
The Board of Directors are pleased to present 24th Annual Report of Eros International Media Limited (hereinafter referred to as âthe Companyâ) covering the business, operations and Audited Financial Statements of the Company for the financial year ended 31 March 2018.
1. FINANCIAL RESULTS
The Financial Performance of your Company for the year ended 31 March 2018 is summarized below:
Rs. in Lakhs
Standalone Year Ended |
Consolidated Year Ended |
|||
Particulars |
2017-18 |
2016-17 |
2017-18 |
2016-17 |
Sales and other Income |
72,857 |
1,16,466 |
1,01,001 |
1,44,528 |
Profit before Tax |
14,043 |
21,100 |
28,735 |
32,223 |
Less: Tax Expenses |
6,342 |
8,061 |
5,613 |
7,894 |
Net Profit for the year from continuing operation |
7,701 |
13,039 |
23,122 |
24,329 |
Profit for the year attributable to: |
||||
Equity shareholders of the Company |
- |
- |
22,934 |
25,745 |
Non-controlling Interests |
- |
- |
188 |
(1,416) |
Other Comprehensive Income/(Loss) (net of taxes) |
56 |
(22) |
51 |
(460) |
Total Comprehensive Income for the Year |
7,757 |
13,017 |
23,173 |
23,869 |
Attributable to: |
||||
Equity Shareholders of the Company |
- |
- |
23,207 |
24,813 |
Non-controlling Interests |
- |
- |
(34) |
(944) |
EPS (Diluted) in Rs. |
8.03 |
13.68 |
23.92 |
27.00 |
2. FINANCIAL PERFORMANCE
On a consolidated basis, the Company has recorded the revenues of Rs. 101,001 Lakhs which was lower by 30.12% as compared to previous year of Rs. 1,44,528 Lakhs. The profit before tax decreased by 10.82% to Rs. 28,735 Lakhs as compared to previous year of Rs. 32,223 Lakhs. The Profit After Tax attributable to equity shareholders was Rs. 22,934 Lakhs decreased by 10.92% as compared to previous year of Rs. 25,745 Lakhs. Diluted EPS decreased by 11.41 % to Rs. 23.92 as compared to previous year of Rs. 27.00.â
On a standalone basis, the Company has recorded the revenues of Rs. 72,857 Lakhs which was lower by 37.44% as compared to previous year of Rs. 1,16,466 Lakhs. The profit before tax decreased by 33.45% to Rs. 14,043 Lakhs as compared to previous year of Rs. 21,100 Lakhs. The Profit After Tax at Rs. 7,701 Lakhs was lower by 40.94% as compared to previous year of Rs. 13,039 Lakhs. Diluted EPS decreased by 41.30% to Rs. 8.03 as compared to previous year of Rs. 13.68.
3. OPERATIONAL PERFORMANCE
During the Financial Year 2017-18, your Company released a total of 24 Films, of which 1 was high budget, 4 medium budget and 19 low budget Films as compared to 44 Films released in corresponding period last year, of which 5 were high budget, 10 medium budget and 29 low budget Films. Amongst the 24 Films released during the financial year 2017-18, 14 were Hindi Films, 1 was Tamil/Telugu Film and 9 were other regional language Films.
Major releases for FY 2017-18 included: Sarkar 3 (Hindi), Munna Michael (Hindi), Sniff (Hindi), Shubh Mangal Savdhaan (Hindi), Newton (Hindi), Mukkabaaz (Hindi), Oru Kidayin Karunai Manu (Tamil), Viswa Vikhyatharaya Payyanmar (Malayalam), Tujha Tu Majha Mi (Marathi), Aamhi Doghi (Marathi), Aake (Kannada), Posto (Bengali) and others.
In the Financial Year 2018-19, we continue to be focused on ramping up our own productions and co-productions through key partnerships. These partnerships include our partnership with talented producer-director, Aanand L Rai (Colour Yellow Production) and our partnership with Reliance to equally invest up to Rs. 1,000 Crores to produce and acquire Indian films and digital originals across all languages. This investment will dramatically scale Erosâ capabilities in content production, marketing, and distribution.
Your Companyâs key asset is a film library of over 2,000 films. In an effort to reach a wide range of audiences, we maintain rights to a diverse portfolio of films spanning various genres, generations and languages. These include rights to films in Hindi and several regional languages, Tamil, Telugu, Kannada, Marathi, Bengali, Malayalam and Punjabi.
4. DIVIDEND
With a view to conserve resources and to strengthen the financial position of the Company, your Directors did not recommend any dividend to its shareholders for the financial year 2017-18.
The Dividend Distribution policy adopted by the Company in terms of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (âSEBI Listing Regulationsâ) is uploaded on the website of the Company at www.erosintl.com.
5. RESERVES
No percentage of profits was transferred to General Reserve as dividend was not recommended for the financial year 2017-18.
6. EMPLOYEESâ STOCK OPTION SCHEME & CHANGES IN SHARE CAPITAL
During the year under review and in pursuance of the authority granted by shareholders at the Annual General Meeting of the Company held on 28 September 2017, your Board had approved the Eros International Media Limited - Employee Stock Option Scheme 2017 (âEROS ESOP 2017â), which was prepared in accordance with Companies Act, 2013 (the âActâ) and SEBI (Share Based Employee Benefits) Regulations, 2014 read with necessary circulars/notifications issued thereto for the issue and allotment of grant of stock options to the employees of the Company as well as to the employees of its holding and subsidiary companies. During the financial year 2017-18, the Board of Directors of the Company, on the recommendations of Nomination and Remuneration Committee had granted an additional 8,64,014 stock options to the employees of the Company and its subsidiary companies under EROS ESOP 2017.
During the year under review, the Nomination and Remuneration Committee of the Board had issued and allotted 11,13,160 Equity Shares of the Company to employees of the Company and its subsidiaries against exercise of equal number of stock options pursuant to Eros Employee Stock Option Scheme 2009 (âEROS ESOP 2009â). This resulted in increase in the Companyâs Paid up Share Capital to Rs. 94,97,18,770 as on 31 March 2018 as against Rs. 93,85,87,170 in the previous year.
The disclosures as required under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI Circular No. CIR/CFD/POLICY CELL/2/2015 dated 16 June 2015, is attached as Annexure A hereto and is also available on website of the Company at www.erosintl.com. A certificate from the Statutory Auditors certifying that both the schemes viz. EROS ESOP 2009 and EROS ESOP 2017 has been implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and in accordance with the resolution(s) passed by the shareholders would be placed at the Annual General Meeting of the Company for inspection by the Members.
7. SUBSIDIARY COMPANIES
On 1 October 2017, Copsale Limited (âCopsaleâ), a company incorporated under the laws of British Virgin Island and the wholly-owned subsidiary of the Company had disinvested its 51% stake in Ayngaran International Limited, an Isle of Man company. With the aforesaid disinvestment, following step down subsidiary companies ceased to be the subsidiary of the Company:
a. Ayngaran International Limited (Isle of Man),
b. Ayngaran International (UK) Limited, United Kingdom
c. Ayngaran International Mauritius Limited, Mauritius
d. Ayngaran International Media Private Limited, India
e. Ayngaran Anak Media Private Limited, India
As on 31 March 2018, the Company has Ten (10) subsidiaries. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Act. There has been no material change in the nature of the business of the Company and its subsidiaries. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Companyâs subsidiaries, their performance and financial position in the prescribed Form AOC-1 is annexed to this Report as Annexure B.
None of the subsidiary companies except Copsale Limited (a British Virgin Island Company) are material subsidiary in terms of Regulation 16(c) of the SEBI Listing Regulations and in accordance with Companyâs policy on âDetermination of Material Subsidiariesâ, which is uploaded on the website of the Company at www.erosintl.com.
In accordance with Section 136 of the Act, the financial statements of the subsidiary companies are available for inspection by the members at the Corporate Office of the Company during business hours on all days except Saturdays, Sundays and public holidays between 11.00 a.m. to 1.00 p.m. upto the date of the Annual General Meeting of the Company. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Corporate Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company at www.erosintl.com.
8. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board had re-designated Mr. Dhirendra Swarup as Chairman and Non-Executive Independent Director of Company w.e.f. 11 August 2017 due to sudden demise of Mr. Naresh Chandra, the Chairman and Non-Executive Independent Director of the Company on 9 July 2017. The Company deeply mourn the irreparable loss due to sudden demise of Late Mr. Naresh Chandra and places on record its appreciation for the valuable contributions made by him during his tenure as Director of the Company.
Mr. Subramaniam Lakshminarayanan was appointed as NonExecutive Additional Independent Director on the Board of the Company with effect from 14 November 2017 to hold office up to the date of the ensuing Annual General Meeting of the Company. The proposed resolution for appointment of Mr. Subramaniam Lakshminarayanan as Non-Executive Independent Director forms part of the Notice convening Annual General Meeting. Your Board recommends his appointment.
Mr. Sunil Srivastav was appointed as Non-Executive Additional Independent Director on the Board of the Company with effect from 23 May 2018 to hold office up to the date of the ensuing Annual General Meeting of the Company. The proposed resolution for appointment of Mr. Sunil Srivastav as Non-Executive Independent Director forms part of the Notice convening Annual General Meeting. Your Board recommends his appointment.
As per the provisions of the Act, Independent Directors have been appointed for a period of Five (5) years and shall not be liable to retire by rotation. All other Directors, except the Managing Director, are liable to retire by rotation at the Annual General Meeting of the Company.
Mr. Kishore Arjan Lulla was re-appointed as an Executive Director, liable to retire by rotation for a period of Five (5) years commencing from 1 November 2017 to 31 October 2022 at the last Annual General Meeting held on 28 September 2017.
In accordance with the provisions of Section 1 52 of the Act read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, 1Mrs. Jyoti Deshpande, Non-Executive Non Independent Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. Your Board recommends her appointment.
The brief details of the Directors proposed to be reappointed as required under Secretarial Standard 2 issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI Listing Regulations is provided in the Notice convening Annual General Meeting of the Company.
All the Directors of the Company have confirmed that they are not disqualified to act as Director in terms of Section 164 of the Act.
In compliance of Section 203 of the Act, Mr. Abhishekh Kanoi was appointed as Vice President -Company Secretary and Compliance Officer and Whole Time Key Managerial Personnel of the Company w.e.f. 15 December 2017 in place of Mrs. Dimple Mehta who has resigned at the close of business hours on 14 December 2017.
Further, Mr. Farokh P. Gandhi was appointed as a Chief Financial Officer and Whole Time Key Managerial Personnel of the Company w.e.f. 9 March 2018 in place of Mr. Dinesh Modi who has resigned at the close of business hours on 8 March 2018.
The Board places on record its appreciation for the valuable contribution made by Mrs. Dimple Mehta and Mr. Dinesh Modi during their tenure with the Company.
Declaration of Independence by Independent Directors & adherence to the Companyâs Code of Conduct for Independent Directors
All the Independent Directors of the Company have submitted their disclosure to the effect that they fulfill all the requirements/criteria of independence as per Section 149(6) of the Act. Further, all the Independent Directors have affirmed that they have adhered and complied with the Companyâs Code of Conduct for Independent Directors which is framed in accordance with Schedule IV of the Act.
Meetings conducted during the Year
The Board met Four (4) times during the financial year under review, the details of which are given in the Corporate Governance Report that forms part of this Report. The intervening gap between any Two (2) meetings of the Board was not more than One Hundred and Twenty (120) days as stipulated under the Act and SEBI Listing Regulations.
Constitution of various Committees
The Board of Directors of the Company has constituted following Committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Management Committee
Details of each of the Committees stating their respective composition, terms of reference and others are uploaded on our website at www.erosintl.com and are stated in brief in the Corporate Governance Report attached to and forming part of this Report.
Annual Evaluation of Board, Committees and Individual Directors
The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and Committee Meetings, acquaintance with business, communicating inter se Board Members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, benchmarks established by global peers, etc., which is in compliance with applicable laws, regulations and guidelines.
The Board carried out annual performance evaluation of the Board, its Committees and Individual Directors and Chairperson. The Chairman of the respective Board Committees shared the report on evaluation with the respective Committee Members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Board Committees. The reports on performance evaluation of the Individual Directors were reviewed by the Chairman of the Board.
Familiarization Programme for Independent Directors during the year
Familiarization Programme for Independent Directors is mentioned at length in Corporate Governance Report attached to this Report and the details of the same have also been disclosed on the website of the Company at www.erosintl.com.
Policy on appointment and remuneration and other details of directors
The remuneration paid to the Directors is in line with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
The Companyâs policy on directorsâ appointment and remuneration and other matters as provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this Report.
A detailed statement of disclosure required to be made in accordance with the Nomination and Remuneration Policy of the Company, disclosures as per the Act and applicable Rules thereto is attached as Annexure C hereto and forms part of this Report.
9. AUDITORS & AUDITORSâ REPORT
M/s. Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration No. 001076N/N500013) Statutory Auditors of the Company retired at the conclusion of the Annual General Meeting held on 28 September 2017 as per the provision of Section 139 of the Act and M/s. Chaturvedi & Shah, (Firm Registration No. 101720W) were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 28 September 2017 for the term of Five (5) years till the conclusion of 28th Annual General Meeting, to be held in the year 2022.
Auditorsâ Report
There are no qualifications, adverse remarks reservations or disclaimer made by M/s. Chaturvedi & Shah, Statutory Auditors, in their report for the financial year ended 31 March 2018. The notes to the Accounts referred to in the Auditorâs Report are self-explanatory and therefore do not call for any further explanation and comments.
Pursuant to provisions of Section 143(12) of the Act, the Statutory Auditors have not reported any incidence of fraud to the Audit Committee during the year under review.
10. SECRETARIAL AUDITORSâ AND ITS REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Makarand M. Joshi & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31 March 2018 in the prescribed Form MR-3 is annexed herewith as Annexure D to this Report, which is self-explanatory. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
11. CREDIT RATING
During the year review, the ratings for various facilities/instruments were revised/reaffirmed by CARE Ratings Limited as under:
Sl. No. |
Facilities |
Rating |
1 |
Long Term |
CARE BBB ; Stable [Triple B Plus; |
Facilities |
Outlook: Stable] |
|
2 |
Short Term |
CARE A3 [A Three Plus] |
Facilities |
12. PARTICULARS OF EMPLOYEES
The requisite disclosures in terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with statement showing names and other particulars of employees drawing remuneration in excess of the limits prescribed under the said Rules is annexed to this Report as Annexure E.
13. LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
Particulars of loans, guarantees and investments made by the Company as required under Section 186(4) of the Act and the SEBI Listing Regulations are contained in Notes to the Standalone Financial Statements of the Company forming part of this Annual Report.
14. RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and SEBI Listing Regulations, your Company has formulated policy on Related Party Transactions duly approved by the Board, which is also available on the Companyâs website at www.erosintl.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties.
All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an armâs length basis, in the ordinary course of business and in compliance with the applicable provisions of the Act and SEBI Listing Regulations. Prior omnibus approval had been obtained for the transaction which are of a foreseeable and repetitive in nature and such transactions are reported on a quarterly basis for review by the Audit Committee as well as the Board.
Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts/ arrangements/transactions entered into with related parties during the financial year 2017-18 in terms of Section 188(1) of the Act and applicable Rules made thereunder, is attached to this Report in the prescribed Form AOC-2 as Annexure F.
All other contracts/arrangements/transactions with related parties, are in the ordinary course of business and at armâs length basis and stated in Notes to Accounts to the Financial Statements of the Company forming part of this Annual Report.
15. VIGIL MECHANISM
The Company promotes ethical behavior in all its business activities and your Company has adopted a Policy on Vigil Mechanism and Whistle Blower in terms of Section 177(9) and Section 177(10) of the Act and Regulation 22 of the SEBI Listing Regulations for receiving and redressing complaints from employees, directors and other stakeholders to report concerns about unethical behaviour, actual or suspected fraud.
The Policy is appropriately communicated within the Company across all levels and has been displayed on the Companyâs intranet for its employees and website at www.erosintl.com for stakeholders.
Protected disclosures are made by a whistle blower in writing to the Ombudsman on Email-ID at [email protected] and under the said mechanism, no person has been denied direct access to the Chairperson of the Audit Committee. The Audit Committee and Stakeholders Relationship Committee periodically reviews the functioning of this Mechanism.
16. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has adopted Sexual Harassment Policy of Women at workplace, which commits to provide a workplace that is free from all forms of discrimination, including sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under the Policy. Further, the Company has constituted an Internal Complaints Committee, where employees can register their complaints against sexual harassment.
During the year under review, the Company has not received any complaints on sexual harassment.
17. EXTRACT OF THE ANNUAL RETURN
The extract of Annual Return in the prescribed Form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed as Annexure G to this Report.
18. INSURANCE
All the insurable interests of your Company including properties, equipment, stocks etc. are adequately insured.
19. DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any public deposit under Chapter V of the Act. The details of loans and advances, which are required to be disclosed in the Companyâs audited annual accounts, pursuant to Schedule IV of SEBI Listing Regulations, are mentioned in Notes to Accounts, forming a part of this Annual Report.
20. DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained, in terms of Section 134 of the Act, your Directors confirms that:
a. in the preparation of the annual accounts for the financial year ended 31 March 2018, the applicable Accounting Standards read with the requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b. such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2018 and of the profit of the Company for the year ended on that date;
c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a âgoing concernâ basis;
e. internal financial controls were followed by the Company and such internal financial controls are adequate and are operating effectively; and
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
Your Company is into the business of production, co-production, acquisitions, marketing and distributions of cinematograph films. Since this business does not involve any manufacturing activity, the information required to be provided under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, are not applicable to the Company. However, the Company has been continuously and extensively using technology in its business operations.
22. INTERNAL FINANCIAL CONTROLS
The Company maintains adequate and effective internal control systems which are commensurate with the nature, size and complexity of its business and ensure orderly and efficient conduct of the business. The internal control systems of the Company are routinely tested and verified by our Internal Auditor, M/s. KPMG, Chartered Accountants and significant audit observations and follow-up actions are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Companyâs internal control requirement and monitors the implementation of audit recommendations.
23. CORPORATE GOVERNANCE
In order to maximize shareholder value on a sustained basis, your Company has been constantly reassessing and benchmarking itself with well-established Corporate Governance practices besides strictly complying with the requirements of the SEBI Listing Regulations and applicable provisions of the Act.
In terms of Schedule V of SEBI Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Secretarial Auditor of the Company is attached and forms an integral part of this Annual Report.
24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34(2)(e) and Schedule V of the SEBI Listing Regulations, Management Discussion and Analysis Report is presented in separate sections forming part of this Annual Report.
25. CORPORATE SOCIAL RESPONSIBILTY
The disclosures on Corporate Social Responsibility activities, as required under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 201 4, are reported in Annexure H forming part of this Report and is also available on the website of the Company at www.erosintl.com.
26. BUSINESS RESPONSIBILITY REPORT
As per Regulation 34 of the SEBI Listing Regulations, the Company has included in its Annual Report, a Business Responsibility Report describing initiatives taken by the Company from an environmental, social and governance perspective. Accordingly, the Business Responsibility Report is attached herewith as Annexure I.
27. RISK MANAGEMENT
The Company has in place a Risk Management Policy to identify the element of risk for achieving its business objective and to provide reasonable assurance that all the material risks will be mitigated. The Audit Committee of the Board has been vested with powers and functions relating to Risk Management, which inter alia includes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization.
The objective of the risk management framework is to enable and support achievement of business objectives through risk intelligent assessment while also placing significant focus on constantly identifying and mitigating risks within the business. Further details on the Companyâs risk management framework is provided in the Management Discussion and Analysis Report.
28. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and till the date of this Report.
29. DETAILS OF SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companyâs operations in future.
30. OTHER DISCLOSURES
- During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force);
- The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings;
- The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
31. ACKNOWLEDGMENTS
The Board of Directors take this opportunity to express their sincere appreciation for support and co-operation from the Banks, Financial Institutions, Shareholders, Vendors, Customers and all other business associates.
Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by the employees at all levels. Your Directors also wish to place on record their gratitude to all the stakeholders for their continued support and confidence.
For and on behalf of the Board of Directors
Eros International Media Limited
Sd/- Sd/-
Sunil Arjan Lulla Sunil Srivastav
DIN: 00243191 DIN: 00237561
Executive Vice Chairman & Non-Executive Independent
Managing Director Director
Date: 23 May 2018
Place: Mumbai
Mar 31, 2017
Directorsâ Report
To,
The Members,
The Directors have pleasure in presenting the 23rd Annual Report of Eros International Media Limited (hereinafter referred to as âthe Companyâ), along with the audited financial statements for the financial year ended 31 March, 2017.
1. FINANCIAL RESULTS
Financial Results of the Company for the year under review along with the figures for previous year are as follows:
Rs, in Lakhs
Eros International Media Limited 1 |
Eros International Group |
|||
(Standalone) |
1 |
(Consolidated) |
||
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
Sales and other Income |
116,466 |
119,202 |
144,528 |
162,570 |
Profit Before tax |
21,100 |
18,056 |
32,223 |
32,107 |
Less: Provision for Tax |
8,061 |
6,793 |
7,894 |
7,900 |
Net Profit from the year from continuing operation |
13,039 |
11,263 |
24,329 |
24,207 |
Profit for the year attributable to: |
||||
Equity shareholders of the Company |
- |
- |
25,745 |
23,867 |
Non-controlling interests |
- |
- |
(1,416) |
340 |
Other comprehensive income (net of taxes) |
(22) |
12 |
(453) |
2119.11 |
Total comprehensive income for the year |
13,017 |
11,275 |
23,876 |
26,327 |
Attributable to: |
||||
Equity shareholders of the Company |
- |
- |
24,821 |
25,968 |
Non-controlling interests |
- |
- |
(945) |
358 |
EPS (Diluted) in Rs, |
13.68 |
11.99 |
27.00 |
25.40 |
2. FINANCIAL PERFORMANCE
On a consolidated basis, our revenue decreased to Rs, 144,528 lakhs for the financial year 2016 - 2017 as against Rs, 162,570 lakhs in the previous financial year. The profit before tax increased by 0.36% to Rs, 32,223 lakhs as compared to Rs, 32,107 lakhs in the previous year. The Profit after tax attributable to equity shareholders was Rs, 25,745 lakhs increased by 7.87% over last year Rs, 23,867 lakhs in FY 2015 - 16. Diluted EPS increased by 6.30 % to Rs, 27 as compared to Rs, 25.40 in financial year 2015 - 16.
On a standalone basis, the revenue for the financial year 2016 - 17 stood at Rs, 116,466 lakhs which was lower by 2.30 % as compared to previous year which was Rs, 119,202 lakhs. The profit before tax increased by 16.86% to Rs, 21,100 lakhs as compared to Rs, 18,056 lakhs in previous year. The Profit after tax at Rs, 13,039 lakhs was higher by 15.77% over last year Rs, 11,263 lakhs in FY 2015 - 16. Diluted EPS increased by 14.10% to Rs, 13.68 as compared to Rs, 11.99 in financial year
2015 - 16.
3. OPERATIONAL PERFORMANCE
During the financial year 2016 - 17, your Company released a total of 44 films, of which 5 were high budget, 10 medium budget and 29 low budget films as compared to 63 films
released in corresponding period last year, of which 6 were high budget films, 16 medium budget and 41 low budget films. Amongst the 44 films released during the financial year, 11 were Hindi films, 18 were Tamil/Telugu films and 15 were other regional language films.
Major releases for FY 2017 included: Housefull 3 (Hindi), Ki & Ka (Hindi), Dishoom (Hindi), Baar Baar Dekho (Hindi), Rock On 2 (Hindi), Neel Batte Sannatta (Hindi), Happy Bhaag Jayegi (Hindi), Banjo (Hindi), Kahaani 2 (Hindi), Sardaar Gabbar Singh (Telugu), Janata Garage (Telugu), 24 (Tamil), White (Malayalam), & Zara Hatke (Marathi), Chaar Sahibzaade 2 (Punjabi), Amar Prem (Bengali), Double Feluda (Bengali) and others.
I n FY 2018, we continue to be focused on ramping up our own productions and co-production through Erosâ in-house franchise label, Trinity Pictures and key partnerships such as the one with talented producer - director, Aanand L. Rai (Colour Yellow Production). We are excited about these developments and are looking forward to FY2018 which will see the fruition of this strategy in a significant manner. Trinity Writers Room has been established and already completed development on 20 franchises.
China is evolving as a very significant film market and in years to come is expected to overtake the US film market. Eros currently has two Indo-China co-productions which are scheduled for release in FY2018-2019, a first for any Indian studio-Kabir Khanâs travel drama and Siddharth Anandâs cross-cultural romantic comedy Love In Beijing.
The Company has a compelling slate for FY 2018, including films such as a Trinity Pictures Sniff - I Spy, Shubh Mangal Savdhan, Mukkebaz, Chandamama Door Ke, Bhavesh Joshi, Happy Bhaag Jayegi 2 and Soorma to name a few Hindi films. In addition, Eros has a number of Tamil, Telugu, Punjabi, Bengali, Marathi and Malayalam films that we look forward to releasing during the year.
Your Companyâs key asset is a film library of over 2000 films. In an effort to reach a wide range of audiences, we maintain rights to a diverse portfolio of films spanning various genres, generations and languages. These include rights to films in Hindi and several regional languages Tamil, Telugu, Kannada, Marathi, Bengali, Malayalam and Punjabi.
4. DIVIDEND
In terms of SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015, the Company has adopted the Dividend Distribution policy on February 10, 2017, copy of which is uploaded on the website of the Company www.erosintl.com
Your Directors did not recommend any dividend to its equity shareholders for the financial year 2016-2017, keeping in mind various financials & business plans of the Company.
5. RESERVES
No percentage of profits was transferred to General reserve as dividend was not recommended for the financial year 2016 - 17.
6. EMPLOYEESâ STOCK OPTION SCHEME & CHANGES IN SHARE CAPITAL
During the year, the Board of Directors of the Company, on the recommendations of Nomination and Remuneration Committee, granted additional 282,227 stock options to the employees of the Company and its subsidiary company and 269,553 Equity shares of the Company were issued and allotted to various employees against exercise of equal number of stock options pursuant to Eros Employee Stock Option Scheme 2009. This resulted in increase in the Companyâs paid up share capital to Rs, 938,587,170 as on 31 March, 2017 as against Rs, 935,891,640 in the previous year.
Summary of information on the Stock options provided by the Company in accordance with Employee Stock Option Scheme 2009 of the Company and in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI Circular No. CIR/CFD/POLICY CELL/2/2015 dated 16 June, 2015, is attached as Annexure A hereto and is also available on website of the Company www.erosintl.com. A certificate from the statutory auditors that the scheme has been implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and in accordance with the resolution(s) passed by the shareholders would be placed at the AGM for inspection by the members.
Further, the Board of Directors of the Company at its meeting held on 2 6 M ay, 2 01 7 h ave approved the new Eros International Media Limited - Employee Stock Option Scheme 2017 (âEROS ESOP 2017â) prepared in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and necessary circulars/notifications issued thereto, for issue and allotment of grant of stock options to the employees of the Company, its holding and subsidiary companies. Brief features of ESOP 2017 are stated in the Notice convening the 23rd Annual General Meeting. Your Board of Directors recommend the item Nos. 6 and 7 of the Notice of the ensuring Annual General Meeting pertaining to EROS ESOP 2017 for your approval.
7. SUBSIDIARY COMPANIES
As on 31 March, 2017, the Company has 15 subsidiaries. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ). There has been no material change in the nature of the business of the Company and its subsidiaries. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Companyâs subsidiaries, its performance and financial position in the prescribed Form AOC-1 is annexed to this Report as Annexure B.
None of the subsidiary companies are material non-listed Indian subsidiary as per the SEBI Listing Regulations and in accordance with Companyâs policy on âDetermination of material subsidiariesâ, which is uploaded on the website of the Company at www.erosintl.com
In accordance with Section 136 of the Companies Act, 2013, the financial statements of the subsidiary companies are available for inspection by the members at the Corporate Office of the Company during business hours on all days except Saturdays, Sundays and public holidays between 11.00 a.m. to 1.00 p.m. up to the date of the Annual General Meeting (âAGMâ). Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Corporate Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company www. erosintl.com
8. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review, Mr. Vijay Ahuja, Non Executive Non Independent Director of the Company, who was liable to retire by rotation at the 22nd AGM held on 29 September, 2016, did not seek re-appointment at the said AGM and ceased to be a Director with effect from 29 September, 2016. The Board of directors placed on record its sincere appreciation for Mr. Vijay Ahuja for the significant contributions and valuable guidance provided by him during his tenure with the Company. The Company wished him all the best for his future endeavors.
Mr. Kishore Lulla, Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment, pursuant to the provisions of Section 152 of the Companies Act, 2013 and applicable rules thereto. Your Directors recommend his re-appointment for your approval.
Further, the term of Mr. Kishore Lulla, as an Executive Director of the Company was approved by the shareholders for a period of five (5) years from 1 November, 2012. The Board, at their meeting held on 26 May, 2017, have approved and proposed the re-appointment of Mr. Kishore Lulla for another term of five (5) years commencing from the end of the existing term i.e. from 1 November 2017 till 31 October, 2022. Your Directors recommend extension of the term of Mr. Kishore Lulla on such terms and conditions as stated in explanatory statement for your approval.
The brief details of the director proposed to be reappointed as required under Regulation 36 of SEBI Listing Regulations is provided in the Notice of the Annual General Meeting.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
All the Directors of the Company have confirmed that they are not disqualified to act as Director in terms of Section 164 of the Companies Act, 2013.
Pursuant to the provisions of Section 203 of the Act, the key managerial personnel of the Company are -Mr. Sunil Lulla, Executive Vice Chairman & Managing Director, Mr. Dinesh Modi, Group Chief Financial Officer (India), and Ms. Dimple Mehta, Vice President
- Company Secretary and Compliance Officer. There has been no change in the key managerial personnel during the year.
Declaration of Independence by Independent Directors & adherence to the Companyâs Code of Conduct for Independent Directors
All the Independent Directors of the Company have submitted their disclosure to the effect that they fulfill all the requirements/criteria of independence as per Section 149(6) of the Companies Act, 2013. Further, all the Independent Directors have affirmed that they have adhered and complied with the Companyâs Code of Conduct for Independent Directors which is framed in accordance with Schedule IV of the Companies Act, 2013.
Meetings conducted during the year
The Board met five (5) times during the financial year under review, the details of which are given in the Corporate Governance Report that forms part of this Report. The intervening gap between any two meetings of the Board was not more than one hundred and twenty (120) days as stipulated under the Companies Act, 2013 and SEBI Listing Regulations.
Constitution of various committees
The Board of Directors of the Company has constituted following committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Management Committee
Details of each of the Committees stating the composition, terms of reference and others are uploaded on our website www.erosintl.com and are stated in brief in the Corporate Governance Report attached to and forming part of this Report.
Annual Evaluation of Board, Committees and Individual Directors
The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements in accordance with the revised Board Performance Evaluation Policy approved and adopted by the Board on 10 February, 2017, which is as per the guidance note issued by SEBI on 5 January, 2017.
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 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 during the meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
The above evaluation was based on the evaluation criteria as per the revised Board Evaluation Policy of the Company. The performance evaluation was done in an independent and a fair manner.
The outcome of the Board evaluation for the financial year 2016-17 was discussed by the Nomination and Remuneration Committee and the Board at their meeting(s) held on 26 May, 2017.
Familiarization Programme for Independent Directors during the year
Familiarization Programme for Independent Directors is mentioned at length in the Corporate Governance Report attached to this Report and the details of the same have also been disclosed on the website of the Company www.erosintl.com
Policy on appointment and remuneration and other details of directors
The remuneration paid to the Directors is in line with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
The Companyâs policy on directorsâ appointment and remuneration and other matters as provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, which forms part of the Directorsâ Report.
A detailed statement of disclosure required to be made in accordance with the Nomination and Remuneration Policy of the Company, disclosures as per Companies Act, 2013 and applicable rules thereto is attached as Annexure C hereto and forms part of this Report.
9. AUDITORS
M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting (AGM). In accordance with the provisions Section 139 of the Companies Act, 2013 and the mandatory rotation of the Auditor requirement, the Board of Directors on recommendation from Audit Committee proposed to appoint M/s Chaturvedi & Shah (Firm Registration No 101220W) as statutory auditors of the Company to hold office from the conclusion of ensuring 23rd AGM till the conclusion of 28th AGM to be held in the year 2022. A Certificate from M/s. Chaturvedi & Shah has been received to the effect that their appointment would be in accordance with Section 139(1) of the Companies Act, 2013 and that they are not disqualified from being appointed as the Auditors of the Company.
Yours Directors recommend the appointment of Auditors as stated at item no. 3 in Notice convening the forthcoming Annual General Meeting.
Auditorsâ Report
There are no qualifications, adverse remarks or reservations made by M/s. Walker Chandiok & Co. LLP, Statutory Auditors, in their report for the financial year ended 31 March, 2017. The notes to the Accounts referred to in the Auditorâs Report are self-explanatory and therefore do not call for any further explanation.
Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incidence of fraud to the Audit Committee during the year under review.
10. SECRETARIAL AUDITORSâ AND ITS REPORT
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 appointed M/s Makarand M. Joshi & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2016 - 2017. The report of Secretarial Audit for the financial year 2016-2017 in form MR-3 is annexed herewith as Annexure D to this Report, which is self-explanatory. There are no qualifications, reservations or adverse remarks in the report.
11. CREDIT RATING
During the year, the following ratings for various facilities/ instruments were revised/ reaffirmed:
Sr |
Facilities/ |
Rating |
Rating |
No. |
Instrument |
Agency |
|
1 |
Long term Facilities |
CARE |
CARE A (Single A plus) |
2 |
Short term Facilities |
CARE |
CARE A1 (A one) |
Proposed Long |
CARE A / CARE A1 |
||
Term/ Short Term |
(Single A plus/ A one) |
||
Facilities |
|||
3 |
Proposed NonConvertible Debentures (that may be issued by the Company in future depending on various factors) |
CARE |
CARE A (Single A plus) |
4 |
Commercial Papers/ |
CARE CARE A1 (A One) |
|
Short Term Debt |
12. PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act, 2013 and the rules made there under, as amended, has been given in the Annexure E appended hereto and forms part of this Report.
13. LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of loans, guarantees and investments made /given by the Company in the year 2016-2017 under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31 March, 2017, are set out in the Notes to the Standalone Financial Statements of the Company forming part of this Annual Report.
14. RELATED PARTY TRANSACTIONS
In line with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board have approved a policy on related party transactions, which has been placed on the Companyâs website at www.erosintl.com. Prior omnibus approval of the Audit Committee is obtained for the transaction which are of a foreseeable and repetitive in nature and such transactions are reported on a quarterly basis for review by the Audit Committee and the Board.
Pursuant to Section 134 of the Companies Act, 2013, the particulars of material contracts or arrangements with related parties referred to in Section 188(1) and applicable rules of the Companies Act, 2013 in Form AOC-2 is provided as Annexure F in this Report.
Other contracts/arrangements with related parties, in usual course of business and at armâs length basis are stated in Notes to accounts.
15. VIGIL MECHANISM
I n line with the requirements under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI Listing Regulations, your Company has established a Vigil Mechanism Policy for receiving and redressing complaints from employees, directors and other stakeholders to report concerns about unethical behavior, actual or suspected fraud.
Mechanism is appropriately communicated within the Company across all levels and has been displayed on the Companyâs intranet for its employees and website at www.erosintl.com for stakeholders.
Protected disclosures are made by a whistle blower in writing to the Ombudsman on email ID [email protected] and under the said mechanism, no person has been denied direct access to the chairperson of the Audit Committee. The Stakeholders Relationship Committee periodically reviews the functioning of this mechanism.
16. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has formulated and implemented Anti Sexual Harassment Policy in accordance with Section 21 and 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to protect the interest of employees at the workplace. The Committee comprising of executive director and senior executives of the Company has been set up to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Details of number of cases filed under Sexual Harassment during the financial year and their disposal is as under:
Number of cases pending as on the beginning of the financial year (1 April, 2016) |
Nil |
Number of complaints filed during the year |
Nil |
Number of cases pending as on the end of the financial year (31 March, 2017) |
Nil |
17. EXTRACT OF THE ANNUAL RETURN
In accordance with Section 92(3) of the Companies
Act, 2013, the extract of annual return is given in Annexure G in the prescribed Form MGT-9, which forms part of this Report.
18. INSURANCE
All the insurable interests of your Company including properties, equipment, stocks etc. are adequately insured.
19. DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any Public Deposits falling within the purview of Section 73 of the Companies Act, 2013. As such, no amount on account of principal or interests on public deposits was outstanding, as on 31 March, 2017. The details of loans and advances, which are required to be disclosed in the Companyâs annual accounts, pursuant to Schedule IV of SEBI Listing Regulations, are mentioned in Notes to accounts forming a part of this Report.
20. DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained, in terms of Section 134 of the Companies Act, 2013, your Directors confirms that:
a. in the preparation of the annual accounts, the applicable accounting standards has been followed along with the proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2017 and of the profit of the Company for the year ended on that date;
c. proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis;
e. internal financial controls were followed by the Company and they are adequate and are operating effectively; and
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
The provisions of Section 134(3)(m) of the Companies Act,
2013 relating to conservation of energy and technology absorption do not apply to the Company. The Company has been continuously and extensively using technology in its operations.
Particulars of foreign currency earnings and outgo are as under:
(Rs, in Lakhs)
Particulars |
Year ended |
Year ended |
31 March, 2017 |
31 March, 2016 |
|
Expenditure in foreign |
149 |
221 |
currency |
||
Earnings in foreign currency |
37,520 |
20,894 |
CIF Value of Imports |
1,960 |
- |
22. INTERNAL AUDIT
As per the provisions of Section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems/ framework of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable the Directors to meet these responsibilities, the Board has entrusted the Audit Committee to set up the necessary internal control frameworks which are operating within the Company. In line with best practices, the Audit Committee regularly reviews the internal control system to ensure that it remains effective and fit for the purpose.
The Company has developed stringent internal control systems in its various business processes, commensurate with the size and nature of its business. The Company has entrusted the internal audit to M/s KPMG, Chartered Accountants.
The internal controls and governance process are duly reviewed for their adequacy and effectiveness through periodic audits by internal auditors. Your Companyâs Audit Committee periodically reviews the findings and suggestions given by internal auditors.
Further, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and suitable corrective actions are taken by your Company.
23. CORPORATE GOVERNANCE
In compliance with Regulation 34 of the SEBI Listing Regulations, a separate report on Corporate Governance along with a certificate from the Secretarial Auditor on its compliance, forms an integral part of the report.
24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
I n line with Regulation 34(2)(e) and Schedule V of SEBI Listing Regulations, Management Discussion and Analysis Report is annexed and forms part of this Report.
25. CORPORATE SOCIAL RESPONSIBILTY
Disclosures on CSR activities, as required under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, are reported in Annexure H forming part of this Report and is also available on the website of the Company at www.erosintl.com
During the financial year 2016-17, the Company had made a total spend of Rs, 20 Lakhs on CSR activities. The CSR contribution of Rs, 10 lakhs made in FY 2015-16 was utilized by âCARE India Solutions for Sustainable Developmentâ for the project âJoin My Village Maternal and Neo Natal Healthâ to intensify integrated maternal and new born health with a focus on assimilating gender interventions in selected district of Uttar Pradesh. Since the spend was not considered in FY 2015 - 2016, it is considered as spend in 2016 - 2017, being the actual year of utilization.
The Company has also contributed Rs, 10 Lakhs to NGO âArpanâ which was utilized for the project personal safety and education programme in schools for dealing with child sexual abuse. It also focuses on creating awareness and skill enhancement of adults like parents, teachers and institutional caretakers who are primary stakeholders and caregivers in childâs life.
26. BUSINESS RESPONSIBILITY REPORT
The maiden Business Responsibility Report of the Company for the Financial Year 2016 - 17, as stipulated under Regulation 34 of the SEBI Listing Regulations is annexed to this Report as Annexure I.
27. RISK MANAGEMENT
Given the extensive scale of business operations, your Company has put in place an Enterprise Risk Management (ERM) framework and adopted a risk management policy based on globally recognized standards. The ERM framework is administered by the Audit Committee, as they have been vested with powers and functions relating to Risk Management, which inter alia includes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization. The objective of the risk management framework is to enable and support achievement of business objectives through risk intelligent assessment while also placing significant focus on constantly identifying and mitigating risks within the business. Further details on the Companyâs risk management framework is provided in the Management Discussion and Analysis report.
28. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and till the date of this Report.
29. DETAILS OF SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS
There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companyâs operations in future.
30. OTHER DISCLOSURES
O During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force);
- The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings;
O The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
31. ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to express their sincere appreciation for support and co-operation from the Banks, Financial Institutions, Shareholders, Vendors, Customers and all other business associates.
Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by the employees at all levels. Your Directors also wish to place on record their gratitude to all the stakeholders for their continued support and confidence.
For and on behalf of the Board of Directors
Sunil Lulla Jyoti Deshpande
DIN: 00243191 DIN: 02303283
Executive Vice Chairman &
Executive Director Managing Director
Place: New Delhi
Date: 26 May 2017
Mar 31, 2016
The Directors have pleasure in presenting the 22nd Annual Report of
your Company for the financial year ended 31 March, 2016.
1. FINANCIAL RESULTS
Financial Results of the Company for the year under review along with
the figures for the previous year are as follows:
Rs. in lakhs
Particulors Eros International
Media Eros Group
Limited (Standalone) (Consolidated)H
2015-16 2014-15 2015-16 2014-15
Sales and other Income 119,202 109,071 160,355 144,103
Profit Before tax 18,130 19,787 30,360 32,315
Less: Provision for Tax 6,811 7,368 7,908 7,615
Less: Minority Interest - - 1,037 (6)
Net profit after Tax 11,319 12,419 21,415 24,706
Add: Balance carried
forward from 60,358 47,939 101,089 76,383
Profit and Loss A/c
Add: Recoupment from
Minority - - 9 -
Shareholders
Profit available for
appropriations 71,677 60,358 122,513 101,089
Add: Excess provision for
dividend - - - -
distribution tax reversed
Balance of profit carried
forward to 71,677 60,358 122,513 101,089
Balance Sheet
EPS (Diluted) inRs. 12.05 13.28 22.79 26.43
During the financial year 2015 - 16, your Company released a total of
63 films, of which 6 were high budget, 16 medium budget and 41 low
budget films as compared to 64 films released in corresponding period
last year of which 6 were high budget films, 11 medium budget and 47
low budget films. Amongst the 63 films released during the financial
year, 33 were Hindi films, 21 were Tamil/Telugu films and 9 were other
regional language films.
The year saw Eros International''s films achieve unprecedented success
in box office performance of its films with 7 out of the top 15 Hindi
films in 2015 being Eros films. A string of films such as the Salman
Khan-starrer ''Bajrangi Bhaijaan'', Sanjay Leela Bhansali''s ''Bajirao
Mastani'', Tanu Weds Manu Returns'', ''Welcome Back'', Bengali films such
as ''Bela Seshe'', ''Monchora'', the second highest Telugu-grosser
''Srimanthudu'' along with ''Singh is Bling'' (Overseas), ''DM Dhadakne Do''
(Overseas), ''Gabbar is Back'' (Overseas) amongst others marked our
unparalleled, critically and commercially successful film slate during
the year. Moreover, Eros films won over 150 prestigious awards for
excellence further reinforcing Eros'' approach of investing in a
portfolio of high-quality films.
For the current financial year 2016 - 17, your Company has clocked in a
promising slate of films with franchise films ''Housefull 3'' and ''Rock
On 2'', other major films such as ''Dishoom'', ''Baar Baar Dekho'', ''Banjo'',
Colour Yellow Productions ''Happy Bhaag Jayegi'' in Hindi alongwith a
host of promising regional movies such as ''24'' in Tamil, ''Sardaar
Gabbar Singh'' in Telugu, ''Chaar Sahibzade'' in Punjabi and many other
films spanning across Hindi, Tamil, Telugu, Malayalam, Marathi and
Punjabi languages. With this, FY2017 will be seeing an unparalleled
movie repertoire, making it the biggest future slate by any studio in
India.
Another significant value-addition to the business during the fiscal
was the development slate at India''s first and only franchise label,
Trinity Pictures. Trinity is also the first Studio in India that has a
dedicated in- house team of writers in the ''Trinity Writers'' Room''.
This initiative is tracking well and the team has developed four films
that will enter production in this financial year. Out of this, two
films that were developed in-house have been green lit as Indo-China
productions.
Your Company''s key asset is a film library of over 2000 films. In an
effort to reach a wide range of audiences, we maintain rights to a
diverse portfolio of films spanning various genres, generations and
languages. These include rights to films in Hindi and several regional
languages Tamil, Telugu, Kannada, Marathi, Bengali, Malayalam and
Punjabi.
During the fiscal, the Company generated strong free cash flows ofRs.
300 crores as compared to negative Rs. 5 crores in the previous
financial year and also improved its working capital efficiencies. The
country''s leading bank, State Bank of India (SBI), has also expressed
confidence in your Company''s business and has been inducted in the
Consortium of bankers and is appointed as a lead bank. SBI has assessed
consortium limits at Rs. 750 crores, which was previously assessed at
Rs. 434.1 crores and has sanctioned credit facilities ofRs. 250 crores,
reflecting upon the Company''s strong financial position.
2. DIVIDEND
With a view to strengthen the financial position of the Company, your
Directors did not recommend any dividend to its equity shareholders.
3. RESERVES
No percentage of profits was transferred to General reserve as dividend
was not recommended for the financial year 2015-16.
4. RESULTS OF OPERATIONS Consolidated
In the financial year 2015-16, the Company recorded consolidated
revenue ofRs. 160,355 lakhs as against Rs. 144,103 lakhs in the
previous financial year, registering a growth of 11.28%. The earnings
before interest and tax (EBIT) decreased by 6.66% to Rs. 33,746 lakhs
as compared to Rs. 36,155 lakhs in previous year. The Profit after tax
(after minority interest) (PAT) at Rs. 21,415 lakhs was lower by 13.32%
over last year (Rs. 24,706 lakhs in FY 2014 -15). Diluted EPS decreased
by 13.77% to Rs. 22.79 as compared to Rs. 26.43 in financial year 2014
-15.
Standalone
On standalone basis, the revenues from operations for the financial
year 2015-16 stood at Rs. 119,202 lakhs which was higher by 9.29% as
compared to previous year which was Rs. 109,071 lakhs. The earnings
before interest and tax (EBIT) decreased by 9.01 % to Rs. 21,502 lakhs
as compared to Rs. 23,631 lakhs in previous year. The Profit After Tax
(PAT) atRs. 11,319 lakhs was lower by 8.85% over last year (Rs. 12,419
lakhs in FY 2014 - 15). Diluted EPS decreased by 9.26% to Rs. 12.05 as
compared to Rs. 13.28 in financial year 2014 - 15.
5. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
As on 31 March, 2016, the Company has 15 subsidiaries (comprising of 10
direct subsidiaries and 5 indirect subsidiaries) as listed below:
- Eros International Films Private Limited (Direct Subsidiary)
- Big Screen Entertainment Private Limited (Direct Subsidiary)
- EM Publishing Private Limited (Direct Subsidiary)
- EyeQube Studios Private Limited (Direct Subsidiary)
- Eros Animation Private Limited (Direct Subsidiary)
- Colour Yellow Productions Private Limited (Direct Subsidiary)
- Digicine PTE Limited (Direct Subsidiary)
- Universal Power Systems Private Limited ("Techzone")* (Direct
Subsidiary)
- Copsale Limited (Direct Subsidiary)
- Ayngaran International Limited (Indirect Subsidiary)
- Ayngaran International UK Limited (Indirect Subsidiary)
- Ayngaran International Mauritius Limited (Indirect Subsidiary)
- Ayngaran International Media Private Limited (Indirect Subsidiary)
- Ayngaran Anak Media Private Limited (Indirect Subsidiary)
- Eros International Distribution LLP (Direct Subsidiary)**
* Universal Power Systems Private Limited ("Techzone") became wholly
owned subsidiary of the Company w.e.f. 1 August, 2015.
** Eros International Distribution LLP was incorporated on 11 December,
2015.
None of the subsidiary companies is material non- listed Indian
subsidiary as per SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (hereinafter "SEBI Listing
Regulations") and in accordance with Company''s policy on "Determination
of material subsidiaries", which is uploaded on the website of the
Company at www.erosintl.com. Further, there are no associate companies
within the meaning of Section 2(6) of the Companies Act, 2013. There
has been no material change in the nature of the business of the
Company and its subsidiaries.
In accordance with Section 129(3) of the Companies Act, 2013, a
consolidated and standalone financial statements of the Company and all
its subsidiaries are prepared in accordance with applicable accounting
standards and Schedule III of the Companies Act 2013; and the same
forms part of this Annual Report. Further, the report on the
performance and financial position of each of the subsidiary and
salient features of the financial statements in the prescribed Form
AOC-I is annexed to this Report as Annexure A.
In accordance with Section 136 of the Companies Act, 2013, the audited
financial statements, including the consolidated financial statements
and related information of the Company and audited financial statements
of each of the subsidiary shall be kept open for inspection at the
Corporate Office of the Company during working hours for a period of 21
days
before the date of the Annual General Meeting. Your Company will also
make available these documents upon request by any Member of the
Company interested in obtaining the same and it shall also make
available these documents on website of the Company www.erosintl.com.
6. INDIAN ACCOUNTING STANDARDS (IND AS)- IFRS CONVERGED STANDARDS
The Ministry of Corporate Affairs (MCA) vide its notification in the
Official Gazette dated 16 February, 2015 has notified the Companies
(Indian Accounting Standard) Rules, 2015. In pursuance of this
notification, the Company and its subsidiaries would adopt Ind AS for
the accounting period beginning from 1 April, 2016.
7. BOARD OF DIRECTORS
During the year under review, Dr. Shankar Nath Acharya, Non Executive
Independent Director, resigned from the Board w.e.f. 30 April, 2015 and
the Board of directors placed on record its sincere appreciation for
Dr. Shankar Nath Acharya for the significant contributions and valuable
guidance received by him during his tenure with the Company. The
Company wished him all the best for his future endeavours.
Mr. Rakesh Sood was appointed as an Additional Independent Director by
the Board w.e.f. 1 May, 2015. The shareholders of the Company at their
meeting held on 3 September, 2015 approved the appointment of Mr.
Rakesh Sood as an Independent Director of the Company for a first term
of five (5) years and to hold the office till the conclusion of Annual
General Meeting (AGM) to be held in the calendar year 2020.
Mr. Sunil Lulla was re-appointed as an Executive Vice Chairman &
Managing Director, not liable to retire by rotation, for a period of
five (5) years commencing from 28 September, 2015 to 27 September,
2020, at the said AGM.
Ms. Jyoti Deshpande was re-appointed as an Executive Director of the
Company by the shareholders at the AGM held during the year, for a
period of (five) 5 years commencing from 1 October, 2015 to 30
September, 2020.
In accordance with the provisions of Section 152 of the Companies Act,
2013 and applicable rules thereto, Mr. Vijay Ahuja, Non-Executive Non
Independent Director of the Company, retires by rotation and has
expressed his unwillingness to be reappointed as Director at the
ensuing Annual General Meeting. Your Board recommends that the vacancy
created on account of retiring director shall not be filled in and the
number of the Board of Directors be reduced accordingly.
All the Directors of the Company have confirmed that they are not
disqualified to act as Director in terms of Section 164 of the
Companies Act, 2013.
Declaration of Independence by Independent Directors & adherence to the
Company''s Code of Conduct for Independent Directors
All the Independent Directors of the Company have submitted their
disclosure to the effect that they fulfill all the
requirements/criterias of independence as per Section 149(6) of the
Companies Act, 2013. Further, all the Independent Directors have
affirmed that they have adhered and complied with the Company''s Code of
Conduct for Independent Directors.
Meetings conducted during the year
The Board met seven (7) times during the financial year under review,
the details of which are given in the Corporate Governance Report that
forms part of this Report. The intervening gap between any two meetings
of the Board was not more than one hundrec and twenty (120) days as
stipulated under the Companies Act, 2013 and SEBI Listing Regulations.
Constitution of various committees
The Board of Directors of the Company has constituted the following
committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Management Committee
Details of each of the Committees stating the composition, terms of
reference and others are uploaded on our website at www.erosintl.com
and are stated in brief in Corporate Governance Report attached to and
forming part of this Report.
Annual Evaluation of Board, Committees and Individual Directors
In accordance with the SEBI Listing Regulations, Companies Act 2013 and
Board Evaluation Policy of the Company, a formal annual evaluation was
carried out by the Board.
Various evaluators, except evaluees, evaluated the performance of the
overall Board, its members and Board committees. Such evaluation was
based on the evaluation criteria identified by Nomination and
Remuneration Committee in consultation with the Board of Directors and
various Committees. The performance evaluation was done in an
independent and fair manner. Evaluators follows the ideal evaluation
process that includes filing and deliberations of evaluation rating
sheet followed by individual interviews and explanations. Results of
all types of evaluation are consolidated in a report along with the
final ratings and placed before the Board for it deliberation and
action plan.
Familiarization Programme for Independent Directors during the year
Familiarization Programme for Independent Directors is mentioned at
length in Corporate Governance Report attached to this Report and the
details of the same have also been disclosed on website of the Company
www.erosintl.com.
8. KEY MANAGERIAL PERSONNEL
During the year, there was no change in Key Managerial Personnel.
9. POLICY ON APPOINTMENT AND REMUNERATION AND OTHER DETAILS OF
DIRECTORS
The Company''s policy on directors'' appointment and remuneration and
other matters as provided in Section 178(3) of the Companies Act, 2013
has been disclosed in the Corporate Governance Report, which forms part
of the Directors'' Report.
A detailed statement of disclosure required to be made in accordance
with the Nomination and Remuneration Policy of the Company, disclosures
as per Companies Act, 2013 and applicable rules thereto is attached as
Annexure B hereto and forms part of this Report.
10. EMPLOYEES''STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors,
inter alia, administers and monitors the Employees Stock Option Scheme
of the Company which is in accordance with the erstwhile SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 (''the SEBI Guidelines'') and in accordance with SEBI (Share Based
Employee Benefits) Regulations, 2014.
Details of Scheme being implemented by the Company including the
summary of information on the stock options provided by the Company is
attached as Annexure C hereto and forms part of this Report.
During the year, the Board of Directors of the Company, on the
recommendations of Nomination and Remuneration Committee, granted
additional 966,009 stock options to its existing employees and new
joinees during the financial year and also issued and allotted 180,920
Equity shares to its employees in various tranches against exercise of
equivalent stock options granted to them.
11. ISSUE OF EQUITY SHARES
During the year, the Company issued and allotted 180,920 equity shares
to its employees against exercise of equivalent stock options and
900,970 equity shares on preferential basis as non cash consideration
to the promoters of Universal Power Systems Private Limited ("UPSPL")
towards acquisition of 100% stake in UPSPL.
As on 31 March, 2016, the paid up capital of the Company stood at Rs.
935,891,640/- as compared to Rs. 925,072,740/- as on 31 March, 201 5,
an increase of Rs. 10,818,900/- during the year under review.
12. AUDITORS & AUDITORS'' REPORT
In accordance with Section 139 of the Companies Act, 2013 and rules
made thereunder, M/s Walker Chandiok & Co LLP, Chartered Accountants,
Mumbai, (Registration No. - 001 076N/N500013) have been appointed as
Statutory Auditors to hold office from the conclusion of the 20th
Annual General Meeting (AGM) till the conclusion of the 23rd Annual
General Meeting of the Company, which will be held in 2017 (subject to
ratification of their appointment by the members at every AGM held
after the AGM in which the appointment was made) on a remuneration as
may be agreed upon by the Board of Directors and the Auditors.
A certificate from the auditors has been received to the effect that
their appointment, if ratified, would be in accordance with Section
139(1) of the Companies Act, 2013 and that they are not disqualified
from being appointed as the Auditors of the Company. Being eligible,
it is proposed to the shareholders to ratify the appointment of
Auditors from conclusion of this AGM till conclusion of next AGM.
The auditors'' report to the shareholders for the audited financial
statements of the Company, both standalone and consolidated, under
review does not contain any qualifications, reservations or adverse
remarks. The notes to the Accounts referred to in the auditor''s Report
are self-explanatory and therefore do not call for any further
explanation.
13. SECRETARIAL AUDIT REPORT
The Board has appointed M/s Makarand M. Joshi & Co., a firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the
Company for the financial year 2015-16. The Secretarial Audit Report
for the financial year 2015 - 16 in form MR-3 is annexed herewith as
Annexure D to this Report, which is self-explanatory. The Secretarial
Audit Report does not contain any qualification, reservation or adverse
remark.
14. CREDIT RATING
During the year, the following ratings for various
facilities/instruments were revised/ reaffirmed:
Sr. No. Facilities/ Instrument Rating Agency Rating
1 Long term Facilities CARE CARE A [Single A]
2 Short term Facilities CARE CARE A2 [A Two Plus]
3 Proposed Non-Convertible
Debentures (that may be
issued CARE & ICRA CARE A [Single A] &
ICRA A [A Plus]
by the Company in future
depending on various
factors)
4 Commercial Papers/ Short
Term Debt CARE CARE A2 [A Two Plus]
15. PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act, 2013
and the rules made thereunder, as amended, has been given in the
Annexure E appended hereto and forms part of this Report.
16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
The particulars of loans, guarantees and investments made /given by the
Company in the year 2015-16 as per Section 186 of the Companies Act,
2013 is stated in the Notes to Account which forms part of this Annual
Report.
17. RELATED PARTY TRANSACTIONS
In compliance with the SEBI Listing Regulations, the Company has a
policy for dealing in transactions with Related Party and the same has
been displayed on the Company''s website www.erosintl.com.
Pursuant to Section 134 of the Companies Act, 2013 and Rules made
thereunder, particulars of transactions with related parties as
required under Section 188 (1) of the Companies Act, 2013, in the
prescribed Form AOC-2 is annexed herewith as Annexure F.
18. VIGIL MECHANISM
Your Company has established a Vigil Mechanism Policy for its
directors, employees and other stakeholders to report concerns about
unethical behaviour, actual or suspected fraud. Protected disclosures
can be made by a whistle blower in writing to the Ombudsman on email ID
whistleblower- erosintl.com and under the said mechanism, no persor has
been denied direct access to the chairperson of the Audit Committee.
The Vigil Mechanism Policy is available on the Company''s website at
www.erosintl.com.
19. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT
WORKPLACE
Your Company has formulated and implemented Anti Sexual Harassment
Policy in accordance with Section 21 and 22 of Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013,
to protect the interest of employees at the workplace. The Committee
comprising of executive director and senior executives of the Company
has been set up to redress the complaints received regarding sexual
harassment. All employees (permanent, contractual, temporary,
trainees) are covered under this policy. Details of number of cases
filed under Sexual Harassment during the financial year and their
disposal is as under:
Number of cases pending as on the Nil
beginning of the financial year
(1 April, 2015)
Number of complaints filed during the year Nil
Number of cases pending
as on the end Nil
of the financial year (31 March, 2016)
20. EXTRACT OF THE ANNUAL RETURN
As per Section 92(3) of the Companies Act, 2013, the extract of annual
return is given in Annexure G in the prescribed Form MGT-9, which forms
part of this Report.
21. INSURANCE
All the insurable interests of your Company including properties,
equipment, stocks etc. are adequately insured.
22. DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any Public Deposits falling within the
purview of Section 73 of the Companies Act, 2013. As such, no amount on
account of principal or interests on public deposits was outstanding,
as on 31 March, 2016. The details of loans and advances, which are
required to be disclosed in the Company''s annual accounts, pursuant to
Schedule IV of SEBI Listing Regulations, are mentioned in Notes to
accounts forming a part of this Report.
23. DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained, in terms of Section 134 of the
Companies Act, 2013, your Directors confirms that:
a. in the preparation of the annual accounts, the applicable
accounting standards has been followed along with the proper
explanation relating to material departures;
b. such accounting policies have been selected and applied
consistently and judgements and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31 March, 2016 and of the profit of the Company for
the period ended on that date;
c. proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis;
e. internal financial controls were followed by the Company and they
are adequate and are operating effectively; and
f. proper systems have been devised to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
The provisions of Section 134(3)(m) of the Companies Act, 2013 relating
to conservation of energy and technology absorption do not apply to the
Company. The Company has been continuously and extensively using
technology in its operations.
Particulars of foreign currency earnings and outgo are as under:
(Rs.in lakhs)
Particulars Year ended Year ended
31 March, 2016 31 March, 2015
Expenditure in foreign 221 321
currency
Earnings in foreign 20,894 44,299
currency
CIF Value of Imports - -
25. INTERNAL AUDIT
As per the provisions of Section 134(5)(e) of the Companies Act, 2013,
the Directors have an overall responsibility for ensuring that the
Company has implemented robust systems/ framework of internal financial
controls to provide them with reasonable assurance regarding the
adequacy and operating effectiveness of controls with regards to
reporting, operational and compliance risks. To enable the Directors to
meet these responsibilities, the Board has devised systems/ frameworks
which are operating within the Company. In line with best practice, the
Board regularly reviews the internal control system to ensure that it
remains effective and fit for purpose.
Where weaknesses are identified as a result of the reviews, new
procedures are put in place to strengthen controls and these are in
turn reviewed at regular intervals.
The Company has developed stringent internal control systems in its
various business processes, commensurate with the size and nature of
its business. The term of M/s. Ernst & Young LLP, Chartered
Accountants, Internal Auditor expired on 31 October, 2015. Thereafter,
the Board of Directors at its meeting held on 9 November, 2015
appointed M/s KPMG, Chartered Accountants as an internal auditor with
effect from 1 November, 2015.
The internal controls and governance process are duly reviewed for
their adequacy and effectiveness through periodic audits by independent
internal audit function. Your Company''s Audit Committee periodically
reviews the findings and suggestions for improvement.
Further, Statutory Auditors and the Business Heads are periodically
apprised of the internal audit findings and corrective actions taken.
26. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out
by Securities and Exchange Board of India in letter and spirit.
Parameters of Statutory compliances evidencing the standards expected
from a listed entity have been duly observed and a Report on Corporate
Governance as well as the Certificate from M/s. Makarand M. Joshi &
Co., Company Secretaries confirming compliance with the requirements of
SEBI Listing Regulations forms part of this Report.
27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per Regulation 34(2)(e) and Schedule V of SEBI Listing Regulations,
Management Discussion and Analysis Report is annexed and forms part of
this Report.
28. LISTING OF SHARES
The shares of the Company are listed on the National Stock Exchange of
India Limited (NSE) and BSE Limited (BSE).
Subsequent to the notification of SEBI Listing Regulations during the
year, the Company has entered into "Uniform Listing Agreement" with
both the Stock Exchanges where its securities are listed,
namely, National Stock Exchange of India Limited and BSE Limited in
order to carry out a novation of the erstwhile Listing Agreement.
29. CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors at its meeting held on 9 November, 2015 has
modified the Corporate Social Responsibility Policy of the Company to
the extent of broadening its CSR objectives, which was duly reviewed
and recommended by CSR Committee.
Disclosures on CSR activities, as required under Rule 9 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014, are
reported in Annexure H forming part of this Report and is also
available on the website of the Company at www.erosintl.com.
During the financial year 2015-16, the Company made total CSR
contribution of Rs. 10 lakhs to "NGO Arpan", out of total statutory
requirement of Rs. 374 lakhs (being 2% of average net profit of last
three years). The amount contributed to NGO Arpan was utilised for the
project personal safety and education programme in schools for dealing
with child sexual abuse. It aims at enabling and empowering the
children to protect themselves from sexual abuse. It focuses on
teaching personal safety skills to the children''s in schools, so that
they can identify and seek help in an unsafe situation. It also
involves awareness building and skill enhancement of adults like
parents, teachers and institutional caretakers who are primary
stakeholders and caregivers in a child''s life. Such information and
skills for children, parents and caregivers are enhanced through
various workshops.
The Company has also contributed Rs. 10 lakhs to "CARE India Solutions
for Sustainable Development" for the project "Join My Village Maternal
and Neo Natal Health" to intensify integrated maternal and new born
health with a focus on assimilating gender interventions in select
district of Uttar Pradesh.
30. RISK MANAGEMENT
The Audit Committee of the Board has been vested with powers and
functions relating to Risk Management which inter alia includes (a)
review of risk management policies and business processes to ensure
that the business processes adopted and transactions entered into by
the Company are designed to identify and mitigate potential risk;
(b) laying down procedures relating to Risk assessment and
minimization. The Audit Committee regularly reviews the risk in
accordance with Risk Management Policy of the Company.
31. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
OF THE COMPANY
There have been no material changes and commitments, affecting the
financial position of the Company which have occurred between the end
of the financial year of the Company to which the financial statements
relate and till the date of this Report.
32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
AND COMPANY''S OPERATIONS IN FUTURE
There have been no significant and material orders passed by the
Regulators or Courts or Tribunals impacting the going concern status
and Company''s operations in future.
33. ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to express their sincere
appreciation for support and co-operation from the Banks, Financial
Institutions, Shareholders, Vendors, Customers and all other business
associates.
Your Directors sincerely appreciate the high degree of professionalism,
commitment and dedication displayed by the employees at all levels.
Your Directors also wish to place on record their gratitude to all the
stakeholders for their continued support and confidence.
For and on behalf of the Board of Directors
Sunil Lulla Naresh Chandra
Executive Vice Chairman Chairman -
and Managing Director Independent Director
Place : Mumbai
Date: 27 May, 2016
Mar 31, 2015
Dear Members,
The Board of Directors of your Company is pleased to present the 21st
Annual Report of your Company along with the standalone and
consolidated Audited Accounts for the financial year ended 31 March,
2015.
1. FINANCIAL RESULTS
Financial Results of the Company for the year under review along with
the figures for previous year are as follows:-
Rs. in lacs
Particulars Eros International Media
Limited (Standalone)
2014-15 2013-14
Sales and other Income 109,071 85,929
Profit Before tax 19,787 18,514
Less: Provision for Tax 7,368 7,147
Less: Minority Interest - -
Net profit after Tax 12,419 11,367
Add: Balance carried forward from
Profit and Loss A/c 47,939 36,535
Profit available for appropriations 60,358 47,902
Add: Excess provision for dividend - 37
distribution tax reversed
Balance of profit carried forward to
Balance Sheet 60,358 47,939
EPS (Diluted) in Rs. 13.28 12.31
Rs. in lacs
Particulars Eros International Group
(Consolidated)
2014-15 2013-14
Sales and other Income 144,103 113,964
Profit Before tax 32,315 26,697
Less: Provision for Tax 7,615 7,370
Less: Minority Interest (6) (642)
Net profit after Tax 24,706 19,969
Add: Balance carried forward from
Profit and Loss A/c 76,383 56,377
Profit available for appropriations 101,089 76,346
Add: Excess provision for dividend - 37
distribution tax reversed
Balance of profit carried forward to
Balance Sheet 101,089 76,383
EPS (Diluted) in Rs. 26.43 21.63
During the fiscal 2014-2015, your Company successfully released 64
films in multiple languages consisting of 44 Hindi films and 20
Tamil/Telugu films as against 69 films during FY 2014, which included
37 Hindi, 30 Tamil/Telugu and 2 other regional language films.
Of the Company's total release portfolio of 64 films during the year,
major theatrical releases included 'Action Jackson', 'Tevar', 'NH10',
'Shamitabh', 'Badlapur', 'Lingaa (Multi-lingual), 'Kaththi' (Tamil),
'Aagadu' (Telugu), 'Mary Kom' (Overseas), 'Ek Villain' (Overseas),
'Kochadaiyaan' (Multi Lingual) amongst others.
During the fiscal, your Company significantly augmented its FY2015-2016
film slate with some impressive signings. The Company partnered with
Salman Khan Films for the Global Distribution Rights of 'Bajrangi
Bhaijaan' & 'Hero', acquired international rights of Excel
Entertainment's eagerly awaited films 'Dil Dhadakne Do' & 'Bangistan' .
Your Company signed an agreement with Viacom18 Motion Pictures for
international distribution of four films: 'Mary Kom' (Released in
FY15); 'Gabbar' (FY16); 'Golu Pappu' (FY16); & 'Santa Banta' (FY16).
The year gone by saw your Company's strategy of entry into Regional
cinema pay-off well and contribute notably to the portfolio of
releases. Building further on its regional footprint, the Company
announced its entry into the Malayalam market by partnering with
leading director Jeethu Joseph for 'Life of Josootty'.
In fiscal 2014-15, your Company launched a Motion Pictures Production
Division, Trinity Pictures, which will be focusing on developing
intellectual property in-house. While the Company's acquisition and
co-production model fuel scalability and increased market share, the
Trinity label will primarily focus on quality success rate and building
franchises with lasting value, complementing our overall content
strategy.
Your Company also enjoys a competitive advantage through its extensive
film library comprising of 2,000 films which include recent and
classic titles across diverse genres, budgets and languages. There is
also growing potential for the digital revenue through ErosNow, a
dedicated online entertainment portal, ErosNow owned by the parent Eros
International PLC, offers full length films, music videos, television
and originals as it continues to expand its reach through various
strategic collaborations. With improving internet connectivity in the
coming years, supported by exponential growth expected in smartphone
user base in India, appetite for on-the-go entertainment should
increase significantly.
2. DIVIDEND
With a view to strengthen the financial position of the Company, your
Directors did not recommend any dividend for its equity shareholders.
3. RESERVES
No percentage of profits was transferred to General reserve as dividend
was not recommended for the financial year 2014-2015.
4. RESULTS OF OPERATIONS Consolidated
In the financial year 2014-2015, the Company recorded consolidated
revenue of Rs. 144,103 lacs as against Rs. 113,964 lacs in the previous
financial year, registering a growth of 26.45 %. The earnings before
interest and tax (EBIT) increased by 20.63 % to Rs. 36,155 lacs as
compared to Rs. 29,971 lacs in previous year. The Profit after tax
(after minority interest) (PAT) at Rs. 24,706 lacs was higher by 23.72
% over last year (Rs. 19,969 lacs in FY 2013-2014). Diluted EPS
increased by 22.19 % to Rs. 26.43 as compared to Rs. 21.63 in financial
year 2013-14.
Standalone
On standalone basis, the revenues from operations for the financial year
2014-2015 stood at Rs. 109,071 lacs which was higher by 26.93% as
compared to previous year which was Rs. 85,929 lacs. The earnings before
interest and tax (EBIT) increased by 8.47 % to Rs. 23,631 lacs as
compared to Rs. 21,785 lacs in previous year. The Profit after tax (PAT)
at Rs. 12,419 lacs was higher by 9.26% over last year (Rs.11,367 lacs in
FY 2013- 2014). Diluted EPS decreased by 7.88 % to Rs. 13.28 as compared
to Rs. 12.31 in financial year 2013-14.
5. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
As on 31 March, 2015, the Company had 13 subsidiaries (comprising of 8
direct subsidiaries and 5 indirect subsidiaries) as listed below:
* Eros International Films Private Limited (Direct Subsidiary)
* Big Screen Entertainment Private Limited (Direct Subsidiary)
* E M Publishing Private Limited (Direct Subsidiary)
* EyeQube Studios Private Limited (Direct Subsidiary)
* Eros Animation Private Limited (Direct Subsidiary)
* Colour Yellow Productions Private Limited (Direct Subsidiary)*
* Digicine PTE Limited (Direct Subsidiary)
* Copsale Limited (Direct Subsidiary)
* Ayngaran International Limited (Indirect Subsidiary)
* Ayngaran International UK Limited (Indirect Subsidiary)
* Ayngaran International Mauritius Limited (Indirect Subsidiary)
* Ayngaran International Media Private Limited (Indirect Subsidiary)
* Ayngaran Anak Media Private Limited (Indirect Subsidiary)
*During the year, your Company acquired 50% stake in Colour Yellow
Productions Private Limited and holds majority of the control of Board
of Directors.
Further, during the year, the Company had placed a proposal to the
shareholder for acquisition of 100% stake of Universal Power Systems
Private Limited from its existing promoters and shareholders, who
approved the same, vide Postal Ballot results dated 26 March, 2015. The
acquisition procedure shall commence on receipt of approval from
Foreign Investment Promotion Board (FIPB) for making downstream
investment.
The Company's Policy for determining material subsidiaries is available
on the Company's website on the following link viz.
http://www.erosintl.com/EROS/ media/Images/Policy-on-Determination-of-
Material- Subsidiary.pdf. None of the subsidiary companies is material
non-listed Indian subsidiary as per Clause 49 (V) of the Listing
Agreement. Further, there are no associate companies within the meaning
of Section 2(6) of the Companies Act, 2013. There has been no material
change in the nature of the business of the subsidiaries.
The financial statements of all the subsidiary companies as on 31
March, 2015, forms part of consolidated financial statements in
compliance with Section 129 and other applicable provisions, if any, of
the Companies Act, 2013 and the same are prepared in accordance with
applicable accounting standards. The financial statements, both
standalone and consolidated, are prepared in accordance with applicable
accounting standards and as per Schedule III of the Companies Act, 2013
and applicable rules thereto.
In addition to the consolidated financial statements, a detailed
financial statement containing the salient features of the financial
statement of each of the subsidiary companies as included in the
consolidation of financial statements as on 31 March, 2015 is annexed
herewith as Annexure A (AOC 1) and forms part of this Report.
The financial statements of the subsidiary companies and related
information are available for inspection by the members at the
Corporate Office of your Company during business hours on all days
except Saturdays, Sundays and public holidays upto the date of the
Annual General Meeting (AGM) as required under Section 136 of the
Companies Act, 2013. Any member desirous of obtaining a copy of the
said financial statements may write to the Company Secretary at the
Corporate Office of your Company.
As required by the Act, the financial statements of the Company
including consolidated financial statements alongwith relevant
documents and separate audited accounts in respect of each of the
subsidiaries are made available on the website of the Company.
6. DIRECTORS
In compliance with Section 149, 152, Schedule IV and other applicable
provisions of the Companies Act, 2013 read with Companies (Appointment
and Qualification of Directors) Rules, 2014 and Clause 49 of the Listing
Agreement, the shareholders of the Company at their meeting held on 25
September, 2014 approved the appointments of Mr. Naresh Chandra, Mr.
Dhirendra Swarup and Dr. Shankar Nath Acharya as Independent Directors
of the Company for a first term of five years and to hold the office
till the conclusion of Annual General Meeting to be held in the calendar
year 2019.
At the said AGM, Mr. Kishore Lulla was re-appointed as an Executive
Director of the Company, liable to retire by rotation, for a period of
three (3) years commencing from 25 September, 2014 till 24, September
2017.
During the year, Mr. Vijay Ahuja, Executive Director of the Company was
re-designated as Non-Executive Non Independent Director of Company
w.e.f 13 February, 2015.
Pursuant to the provisions of Section 152 of the Companies Act, 2013 and
applicable rules thereto, Ms. Jyoti Deshpande, Executive Director of the
Company, is liable to retire by rotation at the ensuing Annual General
Meeting and being eligible, seeks re-appointment. Your Directors
recommend her re- appointment for your approval.
The Board of Directors at their meeting held on 29 May, 2015,
re-appointed Mr. Sunil Lulla as Executive Vice Chairman and Managing
Director for another period of five years commencing from the end of
the present tenure i.e. from 28 September, 2015 till 27 September,
2020, and have recommended the proposed re-appointment for approval of
the shareholders. Your Directors recommend his re-appointment for your
approval.
Dr. Shankar Nath Acharya, Non Executive Independent Director of the
Company, tendered his resignation w.e.f. 30 April, 2015. The Board
placed on record its deep appreciation for Dr. Shankar Nath Acharya and
thanked him for his significant contributions and valuable guidance
during his association with the Company.
Based on the application received from one of the member proposing the
candidature of Mr. Rakesh Sood as Independent Director, the Board of
Directors of the Company at their meeting held on 30 April, 2015,
appointed Mr. Rakesh Sood as an Independent Additional Director w.e.f. 1
May, 2015, who shall hold his office till the next Annual General
meeting. The proposed resolution for appointment of Mr. Rakesh Sood as
Independent Director forms part of the Notice convening Annual General
Meeting. Your Directors recommend his appointment for your approval.
Necessary disclosures/declarations, as per the Companies Act, 2013 and
applicable rules thereto, are received from all the Directors seeking
appointment/ re-appointment(s). As required under Clause 49 of the
Listing Agreement entered with Stock Exchanges, the information
including brief profile(s) of the Directors proposed for
appointment/re-appointment(s) are mentioned at length in the
explanatory statement annexed to the Notice convening the Twenty First
Annual General Meeting.
Declaration of Independence by Independent Directors & adherence to the
Company's Code of Conduct for Independent Directors
All the Independent directors of the Company have submitted their
disclosure to the effect that they fulfill all the
requirements/criteria of independence as per Section 149(6) of the
Companies Act, 2013 as well as Clause 49 of the Listing Agreement.
Further, all the independent directors have affirmed that they have
adhered and complied with the company's Code of Conduct for Independent
Directors which is framed in accordance with Schedule IV of the
Companies Act, 2013.
Meetings conducted during the year
During the year under review, the Board met four (4) times in a year
i.e. on 29 May, 2014, 14 August 2014, 12 November 2014 and 13 February,
2015, apart from one separate meeting of Independent Directors held on
25 September, 2014. The maximum time gap between any two meetings of the
Board was not more than one hundred and twenty days as stipulated under
the Listing Agreement entered with Stock Exchanges.
Constitution of various committees
The Board of Directors of the Company has constituted following
committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Risk Management Committee
f. Management Committee
Details of each of the Committees stating the composition, terms of
reference and others are covered at length in Corporate Governance
Report attached to and forming part of this report.
Annual Evaluation of Board, Committees and individual Directors
In accordance with Board Performance Evaluation Policy of the Company,
a formal annual evaluation was carried out by the Board of its own
performance and that of its committees and individuals directors on
rating sheet methodology and in accordance with the provisions of the
Act and the Corporate Governance requirements as prescribed by
Securities and Exchange Board of India ("SEBI") under clause 49 of the
Listing Agreement.
The performance evaluation was done in an independent and fair manner.
Evaluators undertook the evaluation process which includes filing and
deliberation of evaluation rating sheet followed by individual
interviews and explanations. Results of all types of evaluation were
consolidated in a report along with the final ratings. Evaluation
reports, prepared by Nomination and Remuneration Committee, were tabled
before the Board which was deliberated upon at its meeting.
Familiarization Programme for Independent Directors during the year
Familiarization Programme for Independent Directors is mentioned at
length in Corporate Governance Report attached to this report and the
details of the same have also been disclosed on website of the Company
and are available at the following link: http://www.erosintl.com/
eros/media/images/videos/familiarization-programme-
of-independent-directors.pdf.
7. KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company had appointed Mr. Sunil Lulla,
Executive Vice Chairman and Managing Director, Mr. Kamal Kumar Jain,
erstwhile Chief Financial Officer of the Company and Ms. Dimple Mehta,
Company Secretary and Compliance Officer of the Company as Key
Managerial Personnel in accordance with the provisions of Section
2(51), Section 203 of the Companies Act, 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
During the year, Mr. Kamal Kumar Jain, Chief Financial Officer of the
Company had resigned from his office as such w.e.f. 30 November, 2014
and a new Key Managerial Personnel Mr. Dinesh Modi was appointed by the
Board of Directors in his place w.e.f. 25 November, 2014.
8. 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.
A detailed statement of disclosure required to be made in accordance
with the Nomination and Remuneration Policy of the Company, disclosures
as per Companies Act, 2013 and applicable rules thereto and Listing
Agreement is attached as Annexure B hereto and forms part of this
report.
9. EMPLOYEES' STOCK OPTION PLAN (ESOS)
The Nomination and Remuneration Committee of the Board of Directors,
inter alia, administers and monitors the Employees Stock Option Scheme
of the Company which was in accordance with the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 ('the SEBI Guidelines').
Details of Scheme being implemented by the Company including the
summary of information on the stock options provided by the Company is
attached as Annexure C to this report and forms part of this report.
During the year, pursuant to the grants made to the employees under the
Company's Employees Stock Option Scheme 2009, the employees had
exercised 5,34,084 stock options against which equivalent number of
shares were issued and allotted by the Company.
Based on the recommendations of Nomination and Remuneration Committee,
the Board of Directors of the Company had granted additional 6,91,961
stock options to its existing and new joinees during the financial
year.
10. ISSUE OF EQUITY SHARES
Your Company issued and allotted 5,34,084 Equity shares of the Company
against exercise of equal number of stock options pursuant to Eros
Employee Stock Option Scheme 2009, thereby resulting in increase in the
Company's paid up capital from Rs. 919,731,900 to Rs. 925,072,740 as on
31 March, 2015.
11. AUDITORS & AUDITORS' REPORT
M/s. Walker Chandiok & Co LLP, Chartered Accountants, were appointed as
the statutory auditors of the Company by the shareholders at their
meeting held on 25 September, 2014 for a period of three (3) years till
the conclusion of 23rd Annual General Meeting to be held in 2017,
subject to ratification of their appointment at every AGM.
Your director recommends that the appointment of M/s. Walker Chandiok &
Co LLP, Chartered Accountants, needs to be ratified at the Annual
General Meeting. Your Company has received letters from M/s Walker
Chandiok & Co LLP, Chartered Accountants to the effect that their
appointment, if ratified, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that they are not
disqualified from being appointed as the Auditors of the Company.
M/s Walker Chandiok & Co LLP, Chartered Accountants, audited the
financial statements of the Company, both standalone and consolidated
and issued Auditors Report thereon. The auditors' report does not
contain any qualifications, reservations or adverse remarks. The notes
to the Accounts referred to in the Auditors' Report are self explanatory
and therefore do not call for any further clarifications under Section
134(3)(f) of the Companies Act, 2013.
12. SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act, 2013, the Company
has appointed M/s Bankim Mehta & Associates, Practicing Company
Secretaries (COP- 8959) as the Secretarial Auditor for FY 2014-2015
whose report dated 29 May, 2015 is attached separately to this report
as Annexure D.
The Secretarial Auditors' Report is unqualified and do not contain any
adverse remarks. The Report is self explanatory and therefore do not
call for any further clarifications under Section 204 of the Companies
Act, 2013.
13. CREDIT RATING
During the year, Credit Analysis and Research Limited ("CARE") upgraded
the Company's rating for its Long Term facilities from CARE A to CARE
AA- and ratings for short term facilities were reaffirmed at CARE A1 .
The rating for NCDs (that may be issued by the Company in future
depending on various factors) was upgraded from CARE A to CARE AA- and
the ratings for Commercial Papers (CPs) were reaffirmed at CARE A1 .
14. PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act,
2013 and the rules made thereunder, as amended, has been given in the
Annexure E appended hereto and forms part of this report. The Company
had 5 employees who were employed throughout the year and were in
receipt of remuneration of more than Rs. 60 lacs per annum and 6
employee(s) were employed for part of the year and were in receipt of
remuneration of more than Rs. 5 lacs per month.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
The particulars of loans, guarantees and investments made /given by the
Company in the year 2014 -2015 as per Section 186 of the Companies Act,
2013 is stated in the Notes to Account which forms part of this Annual
Report.
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
None of the transactions with related parties falls under the scope of
Section 188(1) of the Companies Act, 2013. Information on transactions
with related parties pursuant to Section 134(3)(h) of the Act read with
rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure
F in Form AOC-2 and the same forms part of this report.
17. POLICY ON RELATED PARTY TRANSACTIONS
The Company has adopted a policy on Related Party Transaction and the
same has been displayed on the Company's website:
http://www.erosintl.com/EROS/
media/Images/Policy-on-dealings-and-materiality-of-
Related-Party-Transaction.pdf.
18. VIGIL MECHANISM
The Company has established a vigil mechanism for reporting of genuine
concerns through Whistle Blower Policy of the Company. This Policy,
inter alia, provides a direct access to the Chairman of Audit Committee
of the Company on his dedicated email-ID whistleblower@ erosintl.com.
The Whistle Blower Policy is posted on the Company's website at
http://www.erosintl.com/eros/ media/images/whistle-blower-policy.pdf.
19. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT
WORKPLACE
Your Company has formulated and implemented Anti Sexual Harassment
Policy in accordance with Section 21 and 22 of Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013,
to protect the interest of women employees at workplace. The Committee
comprising of executive director and senior executives of the Company
has been set up to redress the complaints received regarding sexual
harassment. All employees (permanent, contractual, temporary, trainees)
are covered under this policy. Details of number of cases filed under
Sexual Harassment and their disposal is as under:
Number of cases pending as on the beginning of Nil
the financial year (1 April, 2014)
Number of complaints filed during the year Nil
Number of cases pending as on the
end of the financial year Nil
(31 March, 2015)
20. EXTRACT OF THE ANNUAL RETURN
As per Section 92(3) of the Companies Act, 2013, the extract of annual
return is given in Annexure G in the prescribed Form MGT-9, which forms
part of this report.
21. INSURANCE
All the insurable interests of your Company including properties,
equipment, stocks etc. are adequately insured.
22. DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any Public Deposits falling within the
purview of Section 73 of the Companies Act, 2013. As such, no amount on
account of principal or interests on public deposits was outstanding,
as on 31 March, 2015. The details of loans and advances, which are
required to be disclosed in the Company's annual accounts, pursuant to
Clause 32 of the Listing Agreement with the Stock Exchanges, are
mentioned in Notes to accounts forming a part of this Report.
23. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(5) of the Companies
Act, 2013, the Board confirms and submit the Director's Responsibility
Statement stating that:
a. in the preparation of the annual accounts, the applicable
accounting standards has been followed along with the proper
explanation relating to material departures;
b. the directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are 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 and
loss of the company for that period;
c. the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
d. the directors had prepared the annual accounts on a going concern
basis;
e. the directors had laid down internal financial controls to be
followed by the Company and that such financials controls are adequate
and were operating effectively; and
f. the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequately and operating effectively.
24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
The provisions of Section 134(3)(m) of the Companies Act, 2013 relating
to conservation of energy and technology absorption do not apply to the
Company. The Company has been continuously and extensively using
technology in its operations.
Particulars of foreign currency earnings and outgo are as under:
Rs. in lacs
Year ended Year ended
March 31, March 31,
2015 2014
Expenditure in foreign 321 225
currency
Earnings in foreign currency 44,299 17,352
CIF Value of Imports - -
25. INTERNAL AUDIT
The Company has developed stringent Internal Control systems in its
various business processes, commensurate with the size and nature of
its business. The Company has entrusted the internal audit to M/s.
Ernst & Young LLP, Chartered Accountants. The main thrust of the
internal audit process is test and review of controls, independent
appraisals of risks, business processes and benchmarking internal
controls with best practices.
The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen them.
The Audit Committee of the Board of Directors, Statutory Auditors and
the Business Heads are periodically apprised of the internal audit
findings and corrective actions taken.
26. CORPORATE GOVERNANCE
The Company has been observing the best corporate governance practices
on an on-going basis. A separate section on Corporate Governance and a
Certificate from M/s. Bankim Mehta & Associates, Practicing Company
Secretaries (Registration No COP- 8959/ Membership-7831) regarding
compliance of the conditions of Corporate Governance as stipulated under
Clause 49 of the Listing Agreements with the Stock Exchanges forms part
of the Corporate Governance Report annexed herewith.
27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per clause 49 of the Listing Agreement entered into with the stock
exchanges, Management Discussion and Analysis Report is attached
herewith and forms part of this report.
28. CORPORATE SOCIAL RESPONSIBILTY
The Board of Directors at its meeting held on 29 May 2014 approved the
Corporate Social Responsibility Policy of the Company, which was duly
reviewed and recommended by CSR Committee, in accordance with Section
135 of the Companies Act, 2013 read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014.
The thrust areas of CSR Policy, inter alia, are education and
empowerment of women. Disclosures on CSR activities as required under
Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules,
2014, are reported in Annexure H forming part of this report and is
also available on the website of the Company.
During the financial year 2014-2015, the Company spent a sum of Rs. 55
lacs only towards its CSR activities, out of total CSR amount of Rs.
3.58 crores (being 2% of average net profit of last three years)
required to be spent in the entire financial year. As the Company is
still in the process of identifying the right charitable trust/
societies to be associated with, in accordance with the CSR Policy of
the Company, the Company ended up spending short on its CSR activities
in FY 2014-2015.
29. RISK MANAGEMENT
The Board of Directors at its meeting held on 12 November, 2014
constituted the Risk Management (RM) Committee comprising of the
Directors and executives as its Members and approved the Risk Management
Policy. The Policy deals with the process which includes, inter alia,
identification of elements of risk which in the opinion of the Board may
threaten the existence of the Company, assessment thereof and
minimisation procedures. The details about Risk Management Committee and
its charter are available on the website of the Company on following
link http:// www.erosintl.com/EROS/media/Images/Charter-of-
Risk-management-Committee.pdf.
30. ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to express their sincere
appreciation for support and the co-operation from the Banks, Financial
Institutions, Shareholders, Vendors, Customers and all other business
associates.
Your Directors sincerely appreciate the high degree of professionalism,
commitment and dedication displayed by employees at all levels. Your
Directors also wish to place on record their gratitude to all the
stakeholders for their continued support and confidence.
For and on behalf of Board of directors
Sunil Lulla Jyoti Deshpande
Executive Vice Chairman Executive Director
and Managing Director
Place: Mumbai
Date: 29 May, 2015
Mar 31, 2014
Dear Members
The Board of Directors are pleased to present the Twentieth Annual
Report of your Company along with the standalone and consolidated
Audited Accounts for the financial year ended 31 March, 2014.
1. FINANCIAL RESULTS
The summary of standalone and consolidated operating results for the
year ended 31 March, 2014 and appropriation of divisible profits is
stated below:
(Rs. in Lakhs)
Particulars Eros International Media
Limited (Standalone)
2013-14 2012-13
Sales and other Income 85,929 93,322
Profit Before tax 18,514 17,902
Less: Provision for Tax 7,147 6,193
Less: Minority Interest - -
Net profit after Tax 11,367 11,709
Add: Balance carried forward from 36,535 27,013
Profit and Loss A/c
Profit available for appropriations 47,902 38,722
Less: Transfer to general reserve - 586
Less: Dividend - 1,378
Less: Tax on dividend - 223
Add: Excess provision for dividend 37 -
distribution tax reversed
Balance of profit carried forward to 47,939 36,535
Balance Sheet
(Rs. in Lakhs)
Particulars Eros International Group
(Consolidated)
2013-14 2012-13
Sales and other Income 113,964 107,435
Profit Before tax 26,697 21,700
Less: Provision for Tax 7,370 6,119
Less: Minority Interest (642) 128
Net profit after Tax 19,969 15,453
Add: Balance carried forward from 56,377 43,149
Profit and Loss A/c
Profit available for appropriations 76,346 58,602
Less: Transfer to general reserve - 586
Less: Dividend - 1,378
Less: Tax on dividend - 261
Add: Excess provision for dividend 37 -
distribution tax reversed
Balance of profit carried forward to 76,383 56,378
Balance Sheet
During FY 2013-2014, the Company successfully released 69 films in
multiple languages consisting of 37 Hindi films, 30 Tamil/Telugu films
and 2 other regional languages films as compared to 77 films during FY
2013, which included 30 Hindi, 44 Tamil and 3 other regional language
films.
Of the Company''s releases during the year under review, some successful
films included ''Goliyon Ki Raasleela-Ram Leela'', ''Jai Ho'',
''R...Rajkumar'', ''Grand Masti'', ''One Nenokkadine''(Telugu), ''Raanjhanaa'',
Singh Saab The Great, ''Krrish 3'' (Overseas), ''Yeh Jawaani Hai Deewani''
(Overseas), ''Phata Poster Nikla Hero'' (Overseas). Of India''s top ten
box office grossing Hindi language films in FY 2013-2014, three were
released by Eros International [Source: Box Office India]
During the year, new deals were signed with MSM Satellite Singapore
Private Limited for broadcast of films on Sony as well as with Viacom
18 Media Private Limited for broadcast of various films on Colors.
''Goliyon Ki Raasleela-Ram Leela'' and ''R...Rajkumar'' satellite licensing
deals further benefitted from the box office linked bonus over and
above the minimum guarantee licence fees. Revenues from the satellite
segment also contributed towards strong financial performance in
financial year 2014. Positive trends in this segment have been
witnessed on account of digitization which is expected to remain a
significant growth driver.
Your Company continues to explore new opportunities to monetise this
content across various distribution platforms. With strong focus on
this approach, the Company reported healthy catalogue revenues during
the fiscal. The Company also holds digital rights for 700 additional
movies including recent and classic titles that encompass diverse
genres, budgets and languages which provide further impetus on content
monetization.
ErosNow, the Company''s dedicated online entertainment platform offering
full length movies and music videos, further enhanced its content
offering by including highly popular television content ranging from
top rated current serials and soaps to reality shows. Your Company''s
ErosNow YouTube channel, a leading Indian channel, has crossed over 1.9
billion video views in aggregate and average over 50 million video
views per month.
Your Company continues to gain momentum on account of exclusive
relationship with HBO Asia as the distribution of channels extends to
more platforms. The two unique premium advertising free channels viz.
HBO Defined and HBO Hits, showcase the Hollywood and Bollywood content.
This fiscal witnessed the launch of these channels on the TATA Sky
network apart from earlier launch on Dish TV and other DTH platforms.
During the year under review, the ultimate parent company viz. Eros
International Plc, became the first Indian media company to list on New
York Stock Exchanges in November 2013.
2. RESULTS OF OPERATIONS
Consolidated
In the financial year 2013-2014, the Company recorded consolidated
revenue of Rs. 113,964 lakhs as against Rs. 107,435 lakhs in the
previous financial year, registering a growth of 6.08 %. The earnings
before interest and tax (EBIT) increased by 32.49 % to Rs. 29,971 lakhs
as compared to Rs. 22,622 lakhs in previous year. The Profit after tax
(after minority interest) (PAT) at Rs. 19,969 lakhs was higher by
29.22 % over last year (Rs. 15,453 lakhs in 2012-2013). Diluted EPS
increased by 28.67 % to Rs. 21.63 as compared to Rs. 16.81 in financial
year 2013.
Standalone
On standalone basis, the revenues from operations for the financial
year 2013-2014 at Rs. 85,929 lakhs was lower by 7.92 % as compared to
previous year which was Rs. 93,322 lakhs. The earnings before interest
and tax (EBIT) increased by 15.63 % to Rs. 21,785 lakhs as compared to
Rs. 18,841 lakhs in previous year. The Profit after tax (PAT) at Rs.
11,367 lakhs was lower by 2.92 % over last year (Rs. 11,709 lakhs in
2012-2013). Diluted EPS decreased by 3.38 % to Rs. 12.31 as compared
to Rs. 12.74 in financial year 2013.
3. DIVIDEND
With a view to strengthen the financial position of the Company, your
Directors did not recommend any dividend for its equity shareholders.
4. EMPLOYEES'' STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors,
inter alia, administers and monitors the Employees'' Stock Option Scheme
of the Company in accordance with the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 (''the SEBI Guidelines'').
Summary of information on the Company''s stock options, as required to
be made in terms of provisions of the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are provided in the Annexure attached to this Report.
During the year, the Company had granted 3,00,000 stock options to its
two senior management personnel and allotted 51,850 equity shares to
the employees against exercise of equal number of stock options
pursuant to EROS Employee Stock Options Scheme 2009. The issuance of
equity shares pursuant to exercise of options does not affect the
Statement of Profit and Loss of the Company, as the exercise is made at
the market price prevailing as on the date of the grant plus taxes as
applicable.
5. ISSUE OF EQUITY SHARES
Your Company issued 51,850 equity shares to its employees against
exercise of equal number of stock options pursuant to EROS Employee
Stock Option Scheme 2009, thereby resulting in increase in the
Company''s paid up share capital from Rs. 919,213,400 to Rs. 919,731,900
as on 31 March, 2014.
6. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
REPORT
As per Clause 49 of the Listing Agreements entered into with the Stock
Exchanges, Corporate Governance Report with Auditors'' Certificate
thereon and Management Discussion and Analysis are attached and forms
part of this Report.
7. DIRECTORS
During the year, Dr. Shankar Nath Acharya and Mr. Vijay Ahuja were
appointed as Non- Executive Independent Director and Executive Director
of the Company respectively, liable to retire by rotation, w.e.f. 28
August, 2013, with the approval of Members at the Annual General
Meeting.
In terms of Section 149, 152, Schedule IV and other applicable
provisions, if any, of the Companies Act, 2013 read with Companies
(Appointment and Qualification of Directors) Rules, 2014, the
Independent Directors can hold office for a term of upto five (5)
consecutive years on the Board of Directors of your Company and are not
liable to retire by rotation. Accordingly, it is proposed to appoint
Mr. Naresh Chandra, Mr. Dhirendra Swarup and Dr. Shankar Nath Acharya
as Independent Directors of your Company upto five (5) consecutive
years.
Pursuant to the provisions of Section 152 of the Companies Act, 2013
and applicable rules thereto, Mr. Kishore Lulla, Executive Director of
the Company, is liable to retire by rotation at the ensuing Annual
General Meeting and being eligible, seeks re- appointment. Your
Directors recommend his re-appointment for your approval.
The term of payment of remuneration to Mr. Kishore Lulla as approved by
the shareholders on 29 December, 2011 for a period of 3 years, would be
expiring on 31 October, 2014. Your Directors have recommended the
payment of remuneration to Mr. Kishore Lulla as an Executive Director
of the Company for another period of three years w.e.f 1 November, 2014
as set out in the Notice of Annual General Meeting.
Necessary disclosures/declarations, as per the Companies Act, 2013 and
applicable rules thereto, are received from the Directors seeking
appointment/re- appointment(s).
As required under Clause 49 of the Listing Agreements entered with
Stock Exchanges, the information including brief profile(s) of the
Directors proposed for appointment/ re-appointment(s) are mentioned at
length in the Notice convening the 20th Annual General Meeting and also
in Corporate Governance Report.
8. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
Your Company has 12 subsidiaries (including 7 direct subsidiaries and 5
indirect subsidiaries) as on 31 March, 2014. Out of 7 direct
subsidiaries, 5 are Indian and other 2 are foreign.
None of the subsidiaries of the Company are material Indian non-listed
subsidiary, in terms of Clause 49(iii) of the Listing Agreement.
The financial statements of all the subsidiary companies as on 31
March, 2014, are included in the Consolidated Financial Statements,
which are prepared in compliance with applicable Accounting Standards.
The Ministry of Corporate Affairs, vide its Circular No. 02/2011 dated
8 February, 2011, has granted general exemption under Section 212(8) of
Companies Act 1956, from attaching the balance sheet, profit and loss
account and other documents of the subsidiary companies to the balance
sheet of the Company, subject to approval by the Board of Directors of
the Company and furnishing of certain financial information in the
Annual Report.
Accordingly, your Board of Directors at its meeting held on 29 May,
2014, have approved for not attaching the balance sheet, profit and
loss account and other documents of subsidiary companies to the Balance
Sheet of the Company. Your Company, having complied with all the
conditions as stated in the said circular, has not attached the
financial statements of its subsidiary companies for the financial year
2013-14 and the same will be made available to the investors seeking
such information. The statement on financials of the subsidiary
companies and statement on subsidiary companies pursuant to Section
212(8) of the Companies Act, 1956, forms part of this Annual Report.
The Consolidated financial statements, in terms of Clause 32 of the
Listing Agreement and prepared in accordance with Accounting Standard
21 as specified in the Companies (Accounting Standards) Rules, 2006,
also forms part of this Annual Report.
9. AUDITORS & AUDITORS'' REPORT
M/s. Walker Chandiok & Co LLP, Chartered Accountants, who are the
statutory auditors of the Company hold office till the conclusion of
the forthcoming AGM and are eligible for re-appointment. Pursuant to
the provisions of Section 139 of the Companies Act, 2013 and Rules
framed thereunder, it is proposed to appoint Walker Chandiok & Co LLP
as statutory auditors of the Company for a term of 3 years from the
conclusion of the forthcoming AGM till the conclusion of 23rd Annual
General Meeting to be held in 2017, subject to ratification of their
appointment at every AGM.
Your Company has received letters from Walker Chandiok & Co LLP,
Chartered Accountants to the effect that their reappointment, if made,
would be within the prescribed limits under Section 141(3) (g) of the
Companies Act, 2013 and that they are not disqualified from being
appointed as the Auditors of the Company.
During the year, the Company had received intimation from Walker
Chandiok & Co LLP stating that Walker, Chandiok & Co. had been
converted into a limited liability partnership (LLP) under the
provisions of the Limited Liability Partnership Act, 2008 with effect
from 25 March, 2014. In terms of Ministry of Corporate Affairs,
Government of India, General Circular no. 9/2013 dated 30 April, 2013,
if a firm of Chartered Accountants, being an auditor in a company under
the Companies Act, 1956, is converted into an LLP, then such an LLP
would be deemed to the auditor of the said Company. The Board of
Directors of the Company have taken due note of this change.
Accordingly, the audit of the Company for financial year 2013-2014 was
conducted by Walker Chandiok & Co LLP.
The Auditors'' Report is unqualified and do not contain any adverse
remarks. The notes to the Accounts referred to in the Auditor''s Report
are self explanatory and therefore do not call for any further
clarifications under Section 217(3) of the Companies Act, 1956.
10. SECRETARIAL AUDIT REPORT
M/s. S G & Associates, Practising Company Secretary, has conducted
Secretarial Audit, pursuant to the provisions of the Companies Act,
1956, for the financial year 2013-2014. M/s. S G & Associates has
submitted the Report confirming compliance with the applicable
provisions of Companies Act, 1956 and other rules and regulations
issued by SEBI and other regulatory authorities.
11. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of employees are required
to be attached to this report. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Annual
Accounts of your Company sent to the shareholders do not contain the
said annexure. Any member desirous of obtaining a copy of the said
annexure may write to the Company Secretary at the Corporate Office.
12. INSURANCE
All the insurable interests of your Company including properties,
equipments, stocks etc. are adequately insured.
13. DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any Public Deposits falling within the
purview of Section 58A of the Companies Act, 1956. As such, no amount
on account of principal or interests on public deposits was
outstanding, as on 31 March, 2014. The details of loans and advances,
which are required to be disclosed in the Company''s annual accounts,
pursuant to Clause 32 of the Listing Agreement with the Stock
Exchanges, are mentioned in Notes to accounts forming a part of this
Report.
14. DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956, in relation to
financial statements for the year 2013-14, the Board of Directors state
that:
a. The applicable accounting standards have been followed in
preparation of the financial statements and there are no material
departures from the said standards.
b. Reasonable and prudent accounting policies have been used in
preparation of the financial statements and that they have been
consistently applied, so as to give a true and fair view of the state
of affairs of the Company as at 31 March 2014 and of the profit for the
year ended on that date;
c. Proper and sufficient care has been taken for 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;
d. The financial statements have been prepared on a going concern
basis.
15. CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
Considering the Company''s business activities, information required
under Section 217(1)(e) of the Companies Act,1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is not applicable to the Company. Particulars of
foreign currency earnings and outgo are given in the notes to accounts
forming part of this Report.
16. INTERNAL AUDIT
The Company has developed stringent Internal Control systems in its
various business processes, commensurate with the size and nature of
its business. The Company has entrusted the internal audit to M/s.
Ernst & Young LLP, Chartered Accountants. The main thrust of the
internal audit process is test and review of controls, independent
appraisals of risks, business processes and benchmarking internal
controls with best practices.
The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen them.
The Audit Committee of the Board of Directors, Statutory Auditors and
the Business Heads are periodically apprised of the internal audit
findings and corrective actions taken.
17. EARNINGS AND OUTGO
Considering the Company''s business activities, information required
under Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is not applicable to the Company. Particulars of
foreign currency earnings and outgo are given in the notes to accounts
forming part of this Report.
18. ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to express the sincere
appreciation for the support and the co-operation from the Banks,
Financial Institutions, Shareholders, Vendors, Customers and all other
business associates.
Your Directors sincerely appreciate the high degree of professionalism,
commitment and dedication displayed by employees at all levels. The
Directors also wish to place on record their gratitude to the Members
for their continued support and confidence.
For and on behalf of the Board of Directors
Sunil Lulla Jyoti Deshpande
Executive Vice Chairman & Executive Director
Managing Director
Place: Mumbai
Date: 29 May, 2014
Mar 31, 2013
To, The Shareholders,
The Board of Directors are pleased to present the Nineteenth Annual
Report of your Company, together with the Audited Accounts for the
financial year ended 31 March 2013.
FINANCIAL RESULTS
The summary of standalone and consolidated operating results, for the
year ended 31 March 2013, and appropriation of divisible profits are
stated below:
(Rs. in lacs)
Particulars (Standalone) (Consolidated)
2012-13 2011-12 2012-13 2011-12
Sales and other Income 93,322 82,132 107,435 96,318
Profit before tax 17,902 17,258 21,700 21,225
Less: Provision for tax 6,193 6,279 6,119 6,314
Less: Minority interest 128 127
Net profit after tax 11,709 10,979 15,453 14,784
Add: Balance carried
forward from the profit 27,013 16,034 43,149 28,365
and loss A/c
Profit available
for appropriations 38,722 27,013 58,603 43,149
Appropriations
Less: Transfer to
general reserve 586 586
Less: Dividend 1,378 1,378
Less: Tax on dividend 223 261
Balance ofprofit
carried forward to
Balance Sheet 36,535 27,013 56,378 43,149
During the FY 2012-13, the Company successfully released 77 films in
multiple languages, comprising 30 Hindi, 47 Tamil and other regional
languages. The number of films released remained stable compared to 77
films released in FY 2011-12. Out of the 44 Tamil films released in FY
2012- 13, five were mainstream releases, compared to one Tamil
mainstream release in FY2011-12.
Of the Company''s 30 Hindi releases during the year under review, some
successful films included ''Housefull 2'', ''Cocktail'', ''Son of
Sardaar'', ''Khiladi 786'', ''Teri Meri Kahaani'', ''Vicky
Donor'' and ''English Vinglish''. ''Thuppaki'', ''Maatraan'' and
''Kadal'' were the three notable Tamil releases during FY 2012-13. Of
India''s top ten box office grossing Hindi language films in FY
2012-13, two were released by Eros International [Source: Box Office
India].
During the year the Company entered into an exciting collaboration with
HBO Asia to launch two new premium advertising free television
channels, namely HBO Defined and HBO Hits, that will showcase Hollywood
and Bollywood library and new release content at compelling windows to
tap into the rapidly growing pay television market within India.
The Company has well positioned itself to monetise its film library
over emerging digital platforms, further diversifying its revenue
streams.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with the listing agreement requirements, the Management
Discussion and Analysis Report is presented in a separate section
forming a part of this Annual Report.
EMPLOYEE STOCK OPTION SCHEME
During the year under review, the Company has allotted 184,483 equity
shares to the employees against exercise of stock options pursuant to
EROS Employee Stock Options Scheme 2009, thereby resulting in increase
in the Company''s paid up share capital from Rs. 91,73,68,570 to Rs.
91,92,13,400 as on 31 March 2013.
Summary of information on the Company''s stock options, as required to
be made in terms of provisions of the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999, are provided in the Annexure attached to this Report.
DIVIDEND
During the financial year 2012-13, your Company had declared its maiden
interim dividend of 15% amounting to Rs. 1.50 per equity share to all the
shareholders of the Company. The Board has recommended to the Members
that interim dividend be considered and treated as final dividend for
the year 2012-13.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and the
Company''s Articles of Association,
Mr. Dhirendra Swamp and Mr. Vijay Ahuja retire by rotation at the
ensuing Annual General Meeting and are eligible for re-appointment.
Your Directors recommend their re-appointments for your approval.
The brief profiles of Mr. Dhirendra Swarup and Mr. Vijay Ahuja are
given in the Notice convening the 19th Annual General Meeting and
discussed at length in the Corporate Governance Report.
During the year, Ms. Jyoti Deshpande was appointed as an Executive
Director of the Company, liable to retire by rotation, w.e.f. 24
September 2012, with the approval of Members at the Annual General
Meeting.
SUBSIDIARY COMPANIES
As on 31 March 2013, the Company has 12 subsidiaries (including six
direct and six indirect subsidiaries). Of the six direct subsidiaries,
four are Indian and other two are foreign.
The financial statements of all the subsidiary companies, as on 31
March 2013, are included in the Consolidated Financial Statements,
which are prepared in compliance with applicable Accounting Standards.
The Ministry of Corporate Affairs, vide its Circular No. 02/2011 dated
8 February 2011, has granted general exemption under Section 212(8) of
the Companies Act, 1956, from attaching the balance sheet, profit and
loss account and other documents of the subsidiary companies to the
Company''s Balance Sheet, subject to approval by the Board of
Directors and furnishing of certain financial information in the Annual
Report.
Accordingly, your Board of Directors, at its meeting held on
30 May 2013, have approved for not attaching the balance sheet, profit
and loss account and other documents of subsidiary companies to the
Company''s Balance Sheet. Your Company, having complied with all the
conditions as stated in the said circular, has not attached the
financial statements of its subsidiary companies for FY 2012-13.
However, the financial statements will be made available to the
investors seeking such information. The statement on financials of the
subsidiary companies and statement on subsidiary companies pursuant to
Section 212(8) of the Companies Act, 1956, forms a part of this Annual
Report.
The Consolidated financial statements of your Company for the financial
year 2012-13, have been prepared in compliance with applicable
Accounting Standards.
AUDITORS
The Company''s Statutory Auditors, M/s Walker, Chandiok & Co.,
Chartered Accountants (Registration No. 001076N), retire at the
conclusion of the ensuing Annual General Meeting and have confirmed
their eligibility and willingness to accept the office of Statutory
Auditors for FY 2013-14, if re-appointed.
The Audit Committee and the Board of Directors at their respective
meetings held on 30 May 2013 have recommended the re-appointment of
M/s. Walker Chandiok & Co., Chartered Accountants, Mumbai for your
approval.
AUDITORS'' REPORT
The Auditors'' Report is unqualified and also does not contain any
adverse remarks. The notes to the Accounts referred to in the
Auditor''s Report are self explanatory and therefore, do not require
any further explanation.
PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act,
1956, read with rules framed thereunder, is available for inspection at
the Corporate Office of the Company. Any shareholder interested in
obtaining a copy of the said statement may acquire it by writing to the
Company Secretary and Compliance Officer at the Corporate Office of the
Company.
INSURANCE
The Company''s property, equipment and stocks are adequately insured
against major relevant risks.
CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, a separate report on
Corporate Governance forms part of the Annual Report. As required by
the listing agreement, a report from Practising Company Secretary
regarding compliance of conditions of corporate governance forms part
of this Report.
Further, a certificate duly signed by the Executive Vice Chairman and
Managing Director and the Group Chief Financial Officer (India) on the
financial statements of the Company for the year ended 31 March 2013
was submitted to the Board of Directors on 30 May 2013. This
certificate is also attached hereto and forming part of this Report.
DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any Public Deposits falling within the
purview of Section 58A of the Companies Act, 1956. As such, no amount
on account of principal or interests on public deposits was
outstanding, as on 31 March 2013. The details of loans and advances,
which are required to be disclosed in the Company''s annual accounts,
pursuant to Clause 32 of the Listing Agreement with the Stock
Exchanges, are mentioned in Notes to accounts forming a part of this
Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956, in relation to
financial statements for the year 2012-13, the Board of Directors state
that:
1. The applicable accounting standards have been followed in
preparation of the financial statements and there are no material
departures from the said standards.
2. Reasonable and prudent accounting policies have been used in
preparation of the financial statements and that they have been
consistently applied, so as to give a true and fair view of the state
of affairs of the Company as at 31 March 2013 and of the profit for the
year ended on that date;
3. Proper and sufficient care has been taken for 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;
4. The financial statements have been prepared on a going concern
basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Considering the Company''s business activities, information required
under Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is not applicable to the Company.
Particulars of foreign currency earnings and outgo are given in the
notes to accounts forming part of this Report.
ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to express the sincere
appreciation for the support and the co-operation from the Banks,
Financial Institutions, Shareholders, Vendors, Customers and all other
business associates.
Your Directors sincerely appreciate the high degree of professionalism,
commitment and dedication displayed by employees at all levels. The
Directors also wish to place on record their gratitude to the Members
for their continued support and confidence.
For and on behalf of the Board of Directors
Sunil Lulla Jyoti Deshpande
Executive Vice Chairman Executive Director
and Managing Director
Place: Mumbai
Date: 30 May 2013
Mar 31, 2012
The Shareholders,
Eros International Media Limited
Mumbai
The Directors have the pleasure of presenting the Eighteenth Annual
Report of the Company for the Financial Year ending 31 March 2012.
OVERVIEW
Eros International Media Limited is a leading global Company in the
Indian film entertainment industry that acquires co- produces and
distributes Indian language films in multiple formats worldwide.
FINANCIAL RESULTS
The summary of standalone and consolidated operating results for the
year and appropriation of divisible Profits is given below:
(Rs. in Lakhs)
(Standalone) (Consolidated)
Particulars 2011-12 2010-11 2011-12 2010-11
Sales and other Income 82,132 48,589 96,318 71,592
Profit Before tax 17,258 10,246 21,225 15,188
Provision before Tax (6,279) (3,290) (6,314) (3,367)
Minority's Interest - - (127) (98)
Net profit after Tax 10,979 6,956 14,784 11,724
Add: Balance carried 16,034 9,078 28,365 16,642
from Profit and Loss A/c
Balance carried to the 27,013 16,034 43,149 28,365
balance sheet
The Company successfully released total of 77 films in Hindi and other
regional languages reflecting its eminent position in the film industry.
Out of the top ten box office Hindi films in India, four of them were
Eros releases. Some of the major releases were Ra.One, Zindagi Na
Milegi Doobara, Ready and Rockstar thus reiterating Eros leadership in
the Indian Film Industry.
Some of the regional language films released during the financial year
were "Velayudham", "Mambattiyan", "Engeyum Kadhal", "Vedi", "3",
"Rajapattai", "Nanban" etc in Tamil; "Dharti", "Khushiyan" in Punjabi
and 'Moraya" in Marathi.
During the year, an online entertainment platform "Eros Now" was
launched to offer digitised Bollywood film content.
The Company was honoured with a Certificate of Excellence at the
recently held Annual Inc. India Awards, a resource base for Indian
Enterprise. A number of our film releases including
Rockstar, Zindagi Na Milegi Doobara, Ra - One and others won nearly 50
awards across a number of prestigious award ceremonies including
Filmfare Awards, Screen Awards, Apsara Awards and Zee Cine Awards.
A statement showing details of the current financial year utilisation of
initial public offering proceeds, raised in October 2010, is given in
the notes to accounts forming part of the Annual Report.
During the financial year, a wholly owned subsidiary Company was
incorporated in Singapore, namely, Digicine Pte Limited, on 30 March
2012 with a main purpose of carrying on production and/or distribution
of films, music, programmes, or any other intellectual property rights
etc.
MANAGEMENT DISCUSSION & ANALYSIS REPORT In accordance with the listing
agreement requirements, the Management Discussion & Analysis report is
presented in a separate section forming part of the Annual Report.
EMPLOYEE STOCK OPTION SCHEME
The Company has allotted 329,857 Equity Shares to the eligible
employees pursuant to the Employees Stock Option Plan, 2009 ("ESOP")
for its employees and its Directors in the said Financial Year.
The Information required to be disclosed in terms of the provisions of
the SEBI (Employees Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999) is enclosed to the report.
DIVIDEND
With a view to strengthen the financial position of the Company,
Directors did not recommend any dividend for its equity shareholders.
DIRECTORS
Dr. Shankar Nath Acharya, Director of the Company, is liable to retire
by rotation at the ensuing Annual General Meeting and being eligible
has been proposed for re-appointment.
The Employment Agreement entered into between the Company and Mr. Sunil
Lulla will expire on 27 September 2012. Further, his term of
appointment as an Executive Vice Chairman and Managing Director of the
Company will expire on 10 February 2013 in accordance with the special
resolution passed at the Extra Ordinary General Meeting of the Company
held on 11 February 2010. The Board of Directors at their meeting held
on 26 May 2012 have considered the renewal of the Employment Agreement
and terms of his appointment as an Executive Vice Chairman and Managing
Director of the Company for a further period of 3 years to be made
effective from 28 September 2012, subject to approval of shareholders
in the Annual General Meeting.
As required under the Clause 49 of the Listing Agreement with the Stock
Exchanges, the information on the particulars of the Directors proposed
for appointment and/or reappointment has been given in the Notice of
the Annual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT In terms of section 217(2AA) of the
Companies Act, 1956, in relation to financial statements for the year
2011-12, the Board of Directors state that:
1 The applicable accounting standards have been followed in preparation
of the financial statements and there are no material departures from
the said standards;
2 Reasonable and prudent accounting policies have been used in
preparation of the financial statements and that they have been
consistently applied, so as to give a true and fair view of the state
of affairs of the Company as at 31 March 2012 and of the Profit for the
year ended on that date;
3 Proper and sufficient care has been taken for 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;
4 The financial statements have been prepared on a going concern basis.
PRESENTATION OF FINANCIAL STATEMENTS The Ministry of Corporate Affairs
(MCA) vide notification dated 28 February 2011 amended the existing
Schedule VI to the Companies Act, 1956. The revised Schedule VI is
applicable from financial year commencing from 1 April 2011. The
financial statements of your Company for the year ended 31 March 2012
have been prepared in accordance with the revised Schedule VI and
accordingly, the previous year's figures have been reclassified/
regrouped to conform to this year's classification.
CONSOLIDATED ACCOUNTS
The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011
dated 8 February 2011 had granted an exemption to companies from
complying with Section 212 of the Companies Act, 1956 provided such
companies fulfill conditions mentioned in the said circular. Accordingly,
the Board of Directors of your Company at its meeting held on 26 May
2012 approved the audited consolidated financial statements for the
financial year 2011-12 in accordance with the Accounting Standard
(AS-21) and other Accounting Standards issued by the Institute of
Chartered Accountants of India as well as Clause 32 of the Listing
Agreement, which include financial information of all its subsidiaries,
and forms part of this report. The Consolidated Financial Statements of
your Company for the financial year 2011-12, have been prepared in
compliance with applicable Accounting Standards.
The annual accounts and financial statements of the subsidiary companies
of your Company and related detailed information shall be made
available to members on request and are open for inspection at the
Corporate Office of your Company during business hours on working days
up to the date of Annual
General Meeting. Your Company has complied with all the conditions as
stated in the circular and accordingly has not attached the financial
statements of its subsidiary companies for the financial year 2011-12. A
statement of summarised financials of all subsidiaries of your Company
pursuant to the circular issued by the Ministry of Corporate Affairs,
forms part of this report.
AUDITORS AND AUDITOR'S REPORT The Auditors, M/s Walker Chandiok & Co.,
Chartered Accountants, Mumbai retire at the ensuing Annual General
Meeting and are eligible for reappointment as Auditors. The Audit
Committee in their meeting held on 26 May 2012 has recommended the
re-appointment of M/s Walker Chandiok & Co., Chartered Accountants,
Mumbai.
The observations of the auditors' in their report read with the
relevant notes to accounts are self explanatory and do not require any
further explanation.
PARTICULARS OF EMPLOYEES
The information required under section 217(2A) of the Companies Act,
1956, read with Companies (Particulars of Employees) Rules, 1975 is
available for inspection at the Corporate Office of the Company. Any
shareholder interested in obtaining the particulars may obtain it by
writing to the Company Secretary and Compliance Officer of the Company
at the Corporate Office of the Company.
INSURANCE
The Company's property, equipments and stocks are adequately insured
against major risks after taking into account all the relevant factors.
CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, a separate report on
Corporate Governance forms part of the Annual Report. As required by
the listing agreement, a report from Mr. Suhas Ganpule, Practising
Company Secretary, Mumbai is attached herewith.
Further, a certificate duly signed by the Executive Vice Chairman and
Managing Director and the Group Chief Financial Officer (India) on the
financial statements of the Company for the year ended 31 March 2012 was
submitted to the Board of Directors on 26 May 2012. This certificate is
also attached to this report.
FIXED DEPOSIT
Your Company has not accepted any Fixed Deposits during the year
2011-12 and there are no outstanding fixed deposits from the public as
on 31 March 2012.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO Considering the business activities of the Company,
information required under Section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 is not applicable to the Company.
Particulars of foreign currency earnings and outgo during the year are
given in the notes to accounts forming part of the Annual Report.
APPRECIATION AND ACKNOWLEDGEMENTS The Board of Directors take this
opportunity to express their sincere appreciation for the support and
the co-operation from the Banks, Financial Institutions, Shareholders,
Vendors, Customers and all other business associates.
The Board of Directors also put on record their sincere appreciation of
the hard work and commitment put in by the management and employees of
the Company and thanks them for another good year for the Company.
For and on behalf of the Board of Directors
Sunil Lulla
Executive Vice Chairman and Managing Director
Place: Mumbai
Date: 26 May 2012
Mar 31, 2011
DEAR MEMBERS,
The Directors take pleasure in presenting the Seventeenth Annual
Report together with the audited statement of accounts of the Company
for the year ended 31 March 2011.
FINANCIAL RESULTS
the financial results for the year ended 31 march 2011 are as follows:
(Rs. In thousands)
Unconsolidated Consolidated
for the year ended
for the year ended 31 March 31 March
31 March 31 March 2011 2010
2011 2010
Sales and Other
Income 4,858,858 5,475,075 7,159,165 6,535,015
Profit before Tax 1,024,643 802,994 1,518,777 1,122,448
Provision for
taxation (328,989) (287,384) (336,712) (296,265)
Profit after Tax 695,654 515,610 1,182,065 826,183
Minority Interest - - (9,795) (5,041)
net Profit attributable to share
holders of the
Company 695,654 515,610 1,172,270 821,142
Balance brought
forward from
previous year 907,834 1,055,289 1,506,107 1,664,184
1,506,107
Capitalization of
Reserves - (663,065) - (663,065)
Balance carried to
to Balance sheet 1,603,488 907,834 2,836,454 1,664,184
OPERATIONAL RESULTS
a. Consolidated Financials
In Financial Year 2010-2011, Eros International successfully released a
total of 77 films in Hindi and other regional languages, reiterating
its leadership position in the Indian film industry.
The growth in revenues were mainly driven by:
- The Theatrical success of the portfolio of releases in the year notably
Housefull, Golmaal 3, Endhiran and Dabangg
During the year under review, the net sales and operating income on
consolidated basis increased by 9.6% from Rs. 65,35,015 (thousands) to
Rs. 71,59,165 (thousands) as a result of high profile films, successful
theatrical release of films and robust & dynamic business model with
its unique de-risking strategy of pre licensing its films content for
maximum monetization.
- The strong television syndication revenues especially within a rising
Indian cable and satellite television market
- The growth in Digital and Ancillary revenues helped by higher music and
mobile monetization.
Investment in content has increased to Rs. 53,65,000 (thousands)
compared to Rs. 26,20,000 (thousands) in FY 2010.
EyeQube, our VFX facility, has initiated work on prominent hollywood
projects as well as current Hindi film projects involving Sharukh Khan
starrer Ra.One.
The Company successfully implemented its Digital Asset ManagementÃ
platform (ÃDAMÃ). This new media initiative ensures optimum
exploitation of Eros indiaÃs film content across multiple platforms,
through comprehensive digitization of its movie library, consisting of
more than 1,100 films.
During the year under review, the net sales and operating income on
consolidated basis increased by 9.6% from Rs. 65,35,015 (thousands) to
Rs. 71,59,165 (thousands) as a result of high profile films,
successful theatrical release of films and robust & dynamic business
model with its unique de-risking strategy of pre licensing its films
content for maximum monetization.
Profit before tax has also shown an upward trend due to strong traction
in new media and satellite licensing, bundling new releases with films
from existing catalogue, lower direct costs and innovative marketing
initiatives. Profit after tax has shown an increase of 43.1% from
previous year.
net profit after minority interest consolidated for the current year is
Rs. 11,72,270 (thousands) as against Rs. 8,21,142 (thousands) in the
previous year.
b. Standalone Financials
During the year under review, net sales and operating income for the
standalone entity decreased to Rs. 48,58,858 (thousands) from Rs.
54,75,075 (thousands) in the previous year a decline of 11.3%, but the
profit after tax for the current year is Rs. 6,95,654 (thousands) as
against Rs. 5,15,610 (thousands) in the previous year.
INTIAL PUBLIC OFFERING
During the year, the Company successfully completed the listing of its
shares on the Indian exchanges. It raised Rs. 35,00,000 (thousands)
through Initial Public Offer of its shares. The issue price was kept at
Rs. 175/- per share including a premium of Rs. 165/- per share. The
issue got a overwhelming response and was subscribed 29.9 times.
APPROPRIATIONS
Divident
With a view to strengthen the financial position of the Company the
Directors of the Company do not recommend any dividend for the year
under consideration.
EMPLOYEE STOCK OPTION SCHEME
Your Company has introduced a Stock option plan à the Employees Stock
Option Plan, 2009 (ÃESOPÃ) Ã for its employees and some of its
Directors.
The Information required to be disclosed in terms of the provisions of
the SEBI (Employees Stock Option Scheme and Employees Stock Purchase
Scheme) Guidelines, 1999) is annexed to this report.
SUBSIDIARIES
Ministry of Corporate Affairs, Government of India has, vide its
Circular no. 51/12/2007-CL-III dated 8 February 2011, has granted a
general exemption from applicability of provisions of Section 212(8) of
the Companies Act, 1956, in relation to attachment of accounts of the
subsidiaries subject to fulfillment of certain conditions set out
therein. Directors confirm that the conditions laid down in the
circular for such
During the year, the Company successfully completed the listing of its
shares on the Indian exchanges. It raised Rs. 35,00,000 (thousands)
through Initial Public Offer of its shares. The issue price was kept at
Rs. 175/- per share including a premium of Rs. 165/- per share. The
issue got a overwhelming response and was subscribed 29.9 times.
exemption have been fulfilled and hence the information for
subsidiaries has not been attached.
However, the Company will make available the annual accounts of the
subsidiary companies and the related detailed information upon request
by any member of the Company. These documents/details will also be
available for inspection by any member of the Company at its corporate
office during business hours on working days up to the date of Annual
General Meeting.
CONSALIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS-21) on Consolidated
Financial Statements the audited Consolidated Financial Statements for
the Financial Year 2010-11 are provided in the Annual Report.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Naresh Chandra and Mr.
Kishore Lulla, retire by rotation at the conclusion of the forthcoming
Annual General Meeting and being eligible, offer themselves for
re-appointment.
Appropriate resolutions for their re-appointment are being placed
before you for your approval at the ensuing Annual General Meeting.
The brief resume of the aforesaid Directors and other information have
been detailed in the Notice of the Annual General Meeting. Your
Directors recommend their re- appointment as Directors of your Company.
AUDITORS AND AUDITORS' REPRT
The present Statutory Auditors M/s. Walker Chandiok and Co., hold
office until the conclusion of the ensuing annual General meeting and
have furnished a certificate regarding their eligibility for
reappointment. The Directors
Profit before tax has also shown an upward trend due to strong traction
in new media and satellite licensing, bundling new releases with films
from existing catalogue, lower direct costs and innovative marketing
initiatives. Profit after tax has shown an increase of 43.1% from
previous year.
recommend that they be re-appointed as Auditors of the Company until
the conclusion of the next Annual General Meeting.
The Auditors Report to the shareholders does not contain any
qualification. the observations of auditors in their report read with
the relevant notes to accounts are self- explanatory and do not require
further explanation.
FIXED DEPOSITS
the Company has not accepted any fixed deposits and as such, no amount
of principal or interest was outstanding as on the balance sheet date.
INSURANCE
All the insurable interests of your Company including inventories,
fixed assets, etc and liabilities under legislative enactments are
adequately insured.
PARTICULARS OF EMPLOYEES
In terms of provision of Section 219(1)(b)(iv) of the Companies Act
1956 the Directorsà Report and Accounts are being sent to all the
Members of the Company excluding the statement of particulars of the
employee under section 217 (2a) of the Companies act 1956. Pursuant to
the notification dated 31 March 2011 issued by the Government of India,
Ministry of Corporate Affairs and in accordance with section 217 (2A)
of the Companies Act 1956 and the rules framed there under , the names
and other particulars of the employees as required to be set out in the
Annexure to the Directorsà report is available for inspection at the
Corporate office of the Company. any member interested in obtaining a
copy of Annexure may write to the Company Secretary & Compliance
officer at the Corporate office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Considering the business activities of the Company Information required
to be provided under Section 217(1) (e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, in relation to Conservation of Energy
and Technology Absorption are currently not applicable to the Company.
Particulars of foreign currency earnings and outgo during the year are
given in Notes to the Accounts forming part of the Annual Report.
CORPORATE GOVERNANCE
The Report on Corporate Governance forms part of the Directorsà Report,
and is annexed herewith.
As required by the Listing Agreement, Practicing Company SecretaryÃs
Report on Corporate Governance and a declaration by the Managing
Director with regard to Code of Conduct are attached to the said
Report.
Further, as required under Clause 49 of the Listing agreement, a
certificate, duly signed by the managing Director and Chief financial
officer (India) on the financial Statements of the Company for the year
ended 31 March 2011, was submitted to the Board of Directors at their
meeting held on 27 may 2011. the certificate is attached to the Report
on Corporate Governance
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report covering a wide range of
issues relating to Performance, outlook etc., is annexed to this
report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956 and based on the representation received from the operating
management, the Directors hereby confirm that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures;
- Appropriate Accounting policies have been selected and consistently
applied 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 at the end of the financial year and of the profit of the
Company for the year ended on that date;
- Proper and sufficient care has been taken 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; and
- The Annual Accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Directors take this opportunity to acknowledge sincere appreciation of
all investors, banks, distributors, exhibitors, customers, vendors and
other business associates for the excellent support received from them
during the year. Directors also recognize and appreciate the efforts
and hard work of all the employees of the Company and their continued
contribution to its progress.
On and behalf of the Board of Directors,
Sunil Lulla
Executive Vice Chairman and Managing Director
Date: 27 May 2011
Place: Mumbai