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Directors Report of Next Mediaworks Ltd.

Mar 31, 2014

THE MEMBERS,

The Directors are pleased to present the 33rd Annual Report on the business and operations of the Company together with the Audited Financial Accounts for the year ended 31st March 2014.

Financial Performance of the Company: (Rs. in lakhs)

Particulars 2013-14 2012-13

profit before Interest, Depreciation, Taxes & Exceptional Items (261.03) (144.82)

Less : Interest 90.47 117.32

Depreciation 0.57 27.30

Less: Exceptional Item - (161.71)

profit / Loss before taxes (352.07) (127.73)

Less: Provision for Taxation - (30.47)

Net profit / Loss after Tax (352.07) (97.26)

As required under the Accounting Standards, related party transactions, calculation of earnings per share, provision of deferred tax liability and Consolidated Accounts of the Company and its four subsidiaries are made a part of the Annual Report. The consolidated statements of the Company have been prepared in accordance with Accounting Standard 21 on Consolidated Financial Statements. Also the financial performance is discussed in detail in the Management Discussion and Analysis Report which forms the part of the Annual Report.

Company Performance:

During the year under review, the Company has incurred a loss of Rs. 352.07 lakhs from Loss of Rs. 127.73 lakhs in last year. The Company made a net loss after tax of Rs. 352.07 in FY 2013-14 as compared to Rs. 97.26 lakhs in FY 2012- 13. Your Directors are continuously looking for avenues for future growth of the Company.

Consolidated Financial Statements:

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard. The Auditors Report to the shareholders thereupon does not contain any qualification.

- Total Income grew by 13% from Rs. 5217.88 lakhs in FY 2012-13 To Rs. 5896.56 lakhs in FY 2013-14.

- profit Before Tax (PBT) stands at Rs. 132.84 lakhs in the FY 2013-14 from the loss of Rs. 484.94 lakhs in FY 2012-13

- During the Current Year, the Loss has been reduced from Rs. 724.97 lakhs in FY 2012-13 to Rs. 99.14 lakhs in FY 2013-14.

- During the year the Long Term Borrowing has been reduced from Rs. 1933.23 lakhs to Rs. 1471.27 lakhs.

Dividend:

In view of the losses during the year and in order to preserve cash for the operating businesses, your Directors do not recommend any dividend for the financial year 2013 - 2014.

Fixed Deposits:

Your company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the balance sheet date.

Directors:

In terms of the Articles of Association, Mr. I. Venkat, and Mr. Dilip Cherian, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Audit Committee:

The Audit Committee of the Company presently comprises of Mr. Narayan Varma (Chairman), Mr. I.Venkat, Mr. Tarique Ansari and Mr. Adille Sumariwalla. The Internal Auditors of the Company M/S T.R.Chaddha & Co. report directly to the Audit Committee. Brief description of the terms of reference of the Audit Committee has been furnished in the Report on Corporate Governance.

Buy-Back of Shares:

During the financial year under review, the Company has not offered to buy-back any of its outstanding shares.

Share Capital & Listing of Securities:

The equity shares of the Company are listed and admitted to dealings on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) and the Annual Listing has been paid to each exchange before 30th April, 2014.

Corporate Governance:

A separate report on Corporate Governance is enclosed as a part of the Annual Report alongwith the Certifcate of the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into with the Stock Exchanges.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the financial year required as per the Clause 49 of the Listing Agreement is hereby annexed as a separate section forming part of the Annual Report.

Directors'' Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management, confirm that- 1. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

2. They have, in selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

3. They have taken proper and sufficient care to the best of their knowledge and ability, 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;

4. They have prepared the annual accounts on a going concern basis.

5. Proper systems are in place to ensure compliance of all laws applicable to the Company.

Auditors:

The auditors, M/s Haribhakti & Co., Chartered Accountants, retire as auditors of the Company at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

The Company has received letter from the Auditor that their re-appointment, if made, would be within the prescribed limite under section 141(3)(g) of the Companies Act, 2013 and they are not disQualified for re-appointment.

Auditors'' Observation in their Report:

The Company''s exposure in its subsidiary Next Radio Limited through investments aggregating Rs. 15,602.86 lakhs as on March 31, 2014. Though net worth of the subsidiary is substantially eroded, no provision for impairment on this account as well as on goodwill on consolidation is considered necessary by the management taking into consideration the nature of Radio business and improvement in performance of the subsidiary.

As on 31st March 2014, the Company has recognized Deferred Tax Assets of Rs. 110.02 Lacs on unabsorbed Business Losses/ unabsorbed Depreciation on the basis of expected profits in future. This is not in accordance with Accounting Standard 22 on "Accounting for Taxes on Income" which requires that such assets should be recognized to the extent that there is virtual certainty supported by convincing evidence that the future taxable income will be available against which such assets can be realized. In our opinion such expectation cannot be considered as virtual certainty to recognize such assets. Consequently the relevant asset and the reserves and surplus are overstated by Rs. 110.02 lacs.

Subsidiary Companies:

As required under section 212 (1) (e) of the Companies Act, 1956, the audited statements of accounts, along with the Directors Report and the Auditors Report relating to the Company''s operating subsidiary Next Radio Limited and a summary of the financial statements relating to the Company''s subsidiaries Digital One Private Limited, One Audio Limited, Next Outdoor Limited thereon for the year ended March 31, 2014 are annexed.

Next Radio Limited is the Company''s wholly owned subsidiary. Next Radio Limited recorded total revenue of Rs. 5897 lakhs, EBITDA stood up at Rs. 2081 lakhs and this year Next Radio Limited has made a turnaround profit of Rs. 254 lakhs as against the loss of Rs. 627 lakhs in the previous financial year.

The Ministry of Corporate Affairs, vide its Circular No.2/2011 dated February 08, 2011, has granted general exemption under Section 212(8) of the Companies Act, 1956, for not attaching annual reports of subsidiary companies subject to certain conditions being fulfilled by the Company. As required under the said circular, the Board of Directors, at its meeting held on April 29, 2014, passed a resolution giving consent for not attaching the Balance Sheet of the subsidiary companies. The shareholders who wish to have a copy of the full report and accounts of the subsidiaries will be provided the same on the receipt of a written request from them. These documents will be placed on the Company''s website viz. www.nextmediaworks.com and will be available for inspection by any shareholder at the registered office of the Company.

Particulars of Employees:

Since there are no eligible employees, the provisions laid down in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 shall not be applicable.

Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo:

a) Conservation of Energy : NIL

b) Technology Abs orption : NIL

c) Foreign Exchange Earning : NIL

d) Foreign Exchange Outgo : NIL

Acknowledgement:

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from the banks, customers, advertisers, advertising agencies, bankers, Government Authorities and all the local authorities. Your Directors also thank all the shareholders for their continued support and all the employees of the Company for their valuable services during the year.

For and on behalf of the Board Tarique Ansari Narayan Varma Chairman & Managing Director Director

Place: Mumbai Date: April 29, 2014


Mar 31, 2013

TO THE MEMBERS,

The Directors hereby present their 32nd Annual Report on the business and operations of the Company together with the Audited Financial Accounts for the year ended 31st March 2013.

Financial Performance

(Rs. in Lakhs) Particulars 2012-13 2011-12

Profit before Interest, Depreciation, Taxes & Amortization (144.82) (102.30)

Less: Interest 117.32 177.92

Depreciation 27.30 2.97

Less: Exceptional Item (161.71)

Profit/(Loss) before taxes (127.73) (283.19)

Less: Provision for Taxation (30.47) (77.72)

Net Profit/ (Net Loss) after Tax (97.26) (205.47)

As required under the Accounting Standards, related party transactions, calculation of earnings per share, provision of deferred tax liability and Consolidated Accounts of the Company and its four subsidiaries are made a part of the Annual Report. The consolidated statements of the company have been prepared in accordance with Accounting Standard 21 on Consolidated Financial Statements.

Company Performance

The Loss Before Taxes for the FY 2012-13 has reduced to Rs. 127.73 lakhs as compared to Rs. 283.19 lakhs in the FY 2011-12. The Company made a net loss after tax of Rs. 97.26 lakhs in FY 2012-13 as compared to Rs. 205.47 lakhs in FY 2011-12.

Dividend

In view of the losses during the year and in order to preserve cash for the operating businesses, your Directors do not recommend any dividend for the financial year 2012-2013.

Fixed Deposits

Your company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the balance sheet date.

Share Capital

During the year paid up capital of the company has increased by Rs. 6 crores on account of conversion of unsecured loan of Rs. 6 crores extended to the company by the promoter group companies by allotment of 60,00,000 equity shares of Rs. 10 each having face value of Rs. 10 each to the promoter group companies.

Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association, Mr. Rajbir Singh Bhandal, and Ms. Monisha Shah, Director retire by rotation and are eligible for re-appointment.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance Practices followed by the Company together with a certificate from the Company''s Auditors confirming compliance is set out in the Annexure forming part of this Report.

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management, confirm that-

1. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

2. They have, in selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

3. They have taken proper and sufficient care to the best of their knowledge and ability, 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;

4. They have prepared the annual accounts on a going concern basis.

Auditors

The auditors, M/s Haribhakti & Co., Chartered Accountants, retire as auditors of the Company at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Auditors'' Observation in their Report

The Company''s exposure in its subsidiary Next Radio Limited (Formerly known as Radio One limited) through investments Rs. 15602.85 lakhs. Though net worth of the subsidiary is substantially eroded and the Company has been incurring constant losses, however no provision for impairment on this account is considered necessary by the management taking in to consideration the nature of Radio business and gradual improvement in performance of the subsidiary.

As on March 31, 2013, the Company has accounted for Rs. 110.02 lakhs as Deferred Tax Asset. The Company has started the digital business in the last financial year. However, as the Company has incurred losses in the said business activity, the Company has concluded the said digital business in the financial year 2012-13. The Company has operationalised strategy to get into new lines of business going forward. The Board reviews the carrying amount of Deferred Tax Assets at each Balance Sheet date and reviews the performance of the Company vis-a-vis the plan to arrive at a conclusion for carrying forward and creating a further Deferred Tax Asset.

As the Board is virtually certain that there will be sufficient future taxable income against which the Deferred Tax Asset can be realized, the Company has decided to recognize the Deferred Tax Asset for the carry forward loss.

Subsidiary Companies

As required under section 212 (1) (e) of the Companies Act, 1956, the audited statements of accounts, along with the report of the Board of Directors relating to the Company''s subsidiaries, Next Radio Limited (Formerly Radio One Limited), Digital One Private Ltd-(Formerly Mid Day Broadcasting South (India) Private Limited), One Audio Limited (Formerly Mid Day Radio North (India) Limited), Next Outdoor Ltd (Formerly Mid Day Outdoor Limited) and respective Auditors'' Reports thereon for the year ended March 31, 2013 are annexed.

Particulars of Employees

Since there are no eligible employees, the provisions laid down in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 shall not be applicable.

Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo:

a) Conservation of Energy : NIL

b) Technology Absorption : NIL

c) Foreign Exchange Earning : NIL

d) Foreign Exchange Outgo : NIL

Acknowledgement

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co- operation received from the banks, customers, advertisers, advertising agencies, bankers, Government Authorities and all the local authorities. Your Directors also thank all the shareholders for their continued support and all the employees of the Company for their valuable services during the year.

For and on behalf of the Board of Directors Tarique Ansari Chairman & Managing Director

Place : Mumbai

Date: April 25, 2013


Mar 31, 2012

The Directors hereby present their 31st Annual Report on the business and operations of the Company together with the Audited Financial Accounts for the year ended 31st March 2012.

Financial Performance (Rs. In Lakhs)

Particulars 2011-12 2010-11

Profit before Interest, Depreciation, Taxes & Exceptional Items (102) 182

Less : Interest 178 18

Depreciation 3 1

Less: Exceptional Item - 1753

Profit before taxes (283) (1590)

Less: Provision for Taxation (78) 55

Net Profit after Tax (205) (1645)

As required under the Accounting Standards, related party transactions, calculation of earnings per share, provision of deferred tax liability and Consolidated Accounts of the Company and its four subsidiaries are made a part of the Annual Report. The consolidated statements of the company have been prepared in accordance with Accounting Standard 21 on Consolidated Financial Statements.

Company Performance

During the year under review, the Company has incurred a loss of Rs. 205 lakhs from Loss of Rs. 1645 in last year. Your Directors are continuously looking for avenues for future growth of the Company.

The Company launched a digital radio business under the "India One" brand. The application is available on all i-pad, i-phone and most recently to blackberry OS7 users.

Dividend

In view of the losses during the year and in order to preserve cash for the operating businesses, your Directors do not recommend any dividend for the financial year 2011-2012.

Fixed Deposits

Your company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the balance sheet date.

Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association, Mr. I. Venkat, and Mr. Dilip Cherian, Directors retire by rotation and are eligible for re-appointment.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance Practices followed by the Company together with a certificate from the Company's Auditors confirming compliance is set out in the Annexure forming part of this Report.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management, confirm that-

1. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

2. They have, in selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

3. They have taken proper and sufficient care to the best of their knowledge and ability, 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;

4. They have prepared the annual accounts on a going concern basis.

Auditors

The auditors, M/s Haribhakti & Co., Chartered Accountants, retire as auditors of the Company at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Auditors' Observation in their Report

The company's exposure in its subsidiary Radio One Ltd. (Formerly known as Radio Mid-Day West (India) Ltd) through

investments and loans aggregate Rs. 1,531,400,334 (investment Rs. 1,382,491,498 and loan Rs. 148,908,836). Though net worth of the subsidiary is substantially eroded and the company has been incurring constant losses, however no provision for impairment on this account is considered necessary by the management taking in to consideration the nature of Radio business and gradual improvement in performance of the subsidiary.

As on March 31, 2012, the Company has accounted for Rs. 85,40,663/- Lacs as Deferred Tax Asset. The company has started digital business in current year and losses during the year were on account of setting up of new business and which is expected to generate substantial revenue going forward. The Board reviews the carrying amount of Deferred Tax Assets at each Balance Sheet date and reviews the performance of the Company vis-a-vis the plan to arrive at a conclusion for carrying forward and creating a further Deferred Tax Asset.

As the Board is virtually certain that there will be sufficient future taxable income against which the Deferred Tax Asset can be realized, the Company has decided to recognize the Deferred Tax Asset for the carry forward loss.

Employee Stock Option Scheme

The management is in the process of formulating Combined ESOP Scheme for the company and its subsidiaries. Subsidiary Companies

As required under section 212 (1) (e) of the Companies Act, 1956, the audited statements of accounts, along with the report of the Board of Directors relating to the Company's subsidiaries, Radio One Ltd (Formerly Radio Mid Day West (India) Limited), Digital One Private Ltd (Formerly Mid Day Broadcasting South (India) Private Limited), One Audio Limited (Formerly Mid Day Radio North (India) Limited), Next Outdoor Ltd (Formerly Mid Day Outdoor Limited) and respective Auditor Reports thereon for the year ended March 31, 2012 are annexed.

Particulars of Employees

Since there are no eligible employees, the provisions laid down in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 shall not be applicable.

Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo

a) Conservation of Energy : NIL

b) Technology Absorption : NIL

c) Foreign Exchange Earning : NIL

d) Foreign Exchange Outgo : NIL

Acknowledgement

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co- operation received from the banks, customers, advertisers, advertising agencies, bankers, Government Authorities and all the local authorities. Your Directors also thank all the shareholders for their continued support and all the employees of the Company for their valuable services during the year.

For and on behalf of the Board

Tarique Ansari

Chairman & Managing Director

Place : Mumbai

Date: May 8, 2012

 
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