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Directors Report of Sowbhagya Media Ltd.

Mar 31, 2015

Dear Members,

The Directors present their report for the Financial Year 2014-15 along with the material events that have taken place till the date of this report.

Financial Results: (Rs. In Lakhs)

For the year For the year Particulars ended ended 31.03.2015 31.03.2014

1. Net Sales/Income from Operations 259.02 296.52

2. Total Operating Expenditure 300.86 387.55

3. Profit/Loss from Operations before Other -41.84 -81.45 Income, Interest and Exceptional Items (1-2)

4. Other Income 12.78 9.56

5. Interest

6. Profit ( )/ Loss (-) from Ordinary -29.04 -81.45 Activities before tax

7. Tax Expense 0.72 -25.03

8. Net Profit ( )/ Loss (-) from -29.77 -56.42 Ordinary Activities after tax

9. Paid-up equity share capital 1,093.00 1,093.00

(Face Value of the Share shall be Rs.10/- Each Rs.10/- Each indicated)

10. Earnings Per Share (0.27) (0.52)

During the year under review your Company did not generate any profit. Your Directors are exploring various business options and the same are expected to get implemented soon. Your Company posted net loss of Rs. 29.04 lakhs as against loss of Rs. 81.45 lakhs in the previous year.

DIVIDEND:

In view of the losses incurred by the Company during the year under review, your Directors do not recommend any dividend for the financial year ended 31st March 2015.

FINANCE:

During the year under review, your Company did not raise any capital from the capital markets either by way of issue of equity shares /ADR/GDR / or any debt by way of debentures. The Company continued to get financial assistance from its lenders within the overall facilities to meet the working capital requirements.

PROSPECTS/NEW PROJECTS:

Your company has plans for expansion and Diversification. At the 20th Annual General Meeting, your company is glad to inform that various growth options are being considered to enhance that the company's future revenues.

PUBLIC DEPOSITS:

Your Company did not invite or accept deposits from public during the year under review.

LISTING WITH STOCK EXCHANGES:

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

DEMATERIALISATION OF SHARES:

93.73% of the company's paid up Equity Share Capital is in dematerialized form as on 31st March, 2014 and balance 6.27% is in physical form.

The Company's Registrars are M/s. XL Softech Systems Limited, 3 Sagar Society, Road No.2, Banjara Hills, Hyderabad - 500 034.

DIRECTORS:

Sri K. Ramakrishna Prasad, DIN-00016309, is a Bachelor's Degree from Andhra University with more than three decades experience in media and publishing industry. He has successfully led a number of publications from their inception to commercial success. He brings in rich experience of handling the intricacies of media and publishing businesses. He has handled both the advertising agencies and well as publications and has good understanding of both the sides of the advertisement operations. He was on the Editorial Board of Yugavani in the 1970s.

Sri V. Kishore, is a commerce graduate and an Independent Director with two decades of experience in Regional Entertainment Industry. He is known for his turnaround strategy in business.

Sri M. Madhusudana Rao, Years is a Honours Graduate in Commerce, Master's Degree Holder in Business Administration and has a Legal Degree, with more than 12 Years of Experience in Finance. He is a market leader within this sector and has handled the larger division of our organization with his extensive exposure. He would ensure the organization has continued growth and expansion in this challenging and rewarding environment with his knowledge. He works effectively to manage the day to day running of Finance Function and has credible track record in Media & Entertainment Industry.

Sri Sitha Balu, is a Graduate and has vast experience in writing novels and books that brings rich and varied experience to the Company, she would ensure the organization has continued growth and expansion in this challenging and rewarding environment with her knowledge.

BOARD & COMMITTEE MEETINGS:

During the year under review, the following Board/Committee Meetings were convened and held:

(a) Four (4) Board Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

(b) Four (4) Audit Committee Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

(c) One (1) Nomination & Remuneration Committee Meetings were held, details of which are given in the Corporate Governance Report.

VIGIL MECHANISM:

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report.

RISK MANAGEMENT POLICY:

Company is in the process of adopting a Business risk evaluation and management policy. However, Business risk evaluation and management is an ongoing process within the organization. The Board of Directors reviews the reports of compliance to all applicable laws and regulations periodically. Any non-compliance is seriously taken up by the Board and the action taken for rectification of non-compliance is reported to the Board.

CORPORATE SOCIAL RESPONSIBILTY POLICY:

As per Section 134(3) (o) of the companies Act 2013, the company is not under given criteria hence CSR is not applicable.

PARTICULARS OF EMPLOYEES:

There are no employees, whose particulars are required to be furnished under Section 197(12)read with Rule 5 (1) (2) & (3) of Companies (Appointment & Remuneration) Rules, 2014 as remuneration of none of the employee is in excess of 5,00,000/- per month during the financial year.

CONSTITUTION OF INTERNAL COMPLIANTS COMMITTEE:

The Company has adopted a policy on prevention and redressal of sexual harassment of women at work place as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and no complaints were received by the Company.

SECRETARIAL STANDARDS:

As Secretarial Standards as approved by the Central Government, haven been issued by the Institute of Company Secretaries of India (ICSI), under the provisions of Section 118(10) of the Companies Act, 2013 (the Act), vide ICSI Notification No. 1 (SS) of 2015 dated April 23rd, 2015 and these standards are applicable to all the companies. ICSI has notified two Secretarial Standards i.e. SST-1 and SST-2 for Board and General Meetings respectively with effect from 1st July 2015 and Company is taking all necessary steps and implementing those standards.

ENERGY CONVERSATION, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

A. Conversation of Energy: NIL

B. Technology Absorption: NIL

C. Foreign Exchange Earning: NIL

D. Foreign Exchange Outgo: NIL

DIRECTORS RESPONSIBILITY STATEMENT:

As required under section 134(5) of the companies act, 2013 Directors of your Company hereby state and confirm that:

1. The applicable Accounting Standards have been followed in preparation of annual accounts;

2. The accounting policies selected were applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the State of affairs of the Company as at 31st march, 2014 and of the loss 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 Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Annual Accounts for the year ended 31st March, 2015 have been prepared on a going concern basis;

REPORT ON CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ALANYSIS REPORT

As required by Clause 49 of the Listing Agreements with Stock Exchanges, the Management discussion and Analysis Report is enclosed as a part of this Annual report -Annexure - A.

SECRETARIAL AUDIT:

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 had appointed Mr. G S L N Gupta, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year ended 31st March 2015. The Report of the Secretarial Audit Report is annexed herewith as Annexure 'B'.

Directors' explanation on the comments of the Secretarial Auditor for the year ended 31st March 2015 as set out in his Secretarial Audit Report dated 18th June 2015 is as follows:

(i) With reference to sub-clause (a) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned that the company has not registered under A.P. Tax on Professions, Trades, Callings and Employments Act, 1987 for professional tax of company, the board would like to inform that, necessary steps are taking to get registration and to comply the applicable provisions under the said Act.

(ii) With reference to sub-clause (b) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned that the company has not registered under Shops & Establishments Act, the board would like to inform that, necessary steps are taking to get registration and to comply the applicable provisions under the said Act.

(iii) With reference to sub-clause (c) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned that the company has not filed Annual Report with the ROC/MCA for the FY 2013-14, the Board would like to inform you that the said Forms shall be filed with the Ministry of Corporate Affairs at the earliest.

(iv) With reference to sub-clause (d) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned that the company has not filed Annual Return with the ROC/MCA for the FY 2013-14, the Board would like to inform you that the said Forms shall be filed with the Ministry of Corporate Affairs at the earliest.

(v) With reference to sub-clause (e) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned that the Company Secretary of the company has resigned and the company has to recruit another full time Company Secretary as per the provisions of the Companies Act 2013 and as per the listing agreement clauses, the Board would like to inform you that the company is taking all necessary steps to appoint full time Company Secretary at the earliest.

(vi) With reference to sub-clause (f) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned In his note that CFO to be appointed by the company under the Category of KMP, the Board would like to inform you that the company is taking all necessary steps to appoint full time CFO at the earliest.

(vii) With reference to sub-clause (g) of clause (vi) of the said report wherein the Secretarial Auditor Has mentioned In his note that, During the year, the Central Bureau of Investigation (CBI) and Directorate of enforcement filed cases against the company and its managing director under the prevention of money laundering Act, 2002 and few properties of the company under provisional attachment with Enforcement Directorate, the Board would like to inform you that the company is confident that it has not done anything wrong and The company is co-operating with the above government agencies and company would be able to give replies to the allegations to the satisfaction of the government agencies involved.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Related party transactions that were entered during the financial year were on an arm's length basis and were in the ordinary course of business. There are transactions with related parties referred to in Section 188(1) in the company during the financial year and the complete details incorporated in the notes to accounts and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-C.

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) oftheCompaniesAct,2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report- Annexure'D'.

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 the date of the report.

AUDIT OBSERVATIONS:

Auditors' observations are suitably explained in notes to the Accounts and are self-explanatory.

AUDITORS

The Auditors, M/s. Ganesh Venkat & Co., Chartered Accountants, Hyderabad retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

CORPORATE GOVERNANCE AND SHAREHOLDERS' INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report (Annexure II).

Certificate from the Statutory Auditors of the company M/s. Ganesh Vekat & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause-49 of the Listing Agreement is attached to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

Information required under Section 134 of the Companies Act, 2013 read with Companies (Disclosure of particulars in Directors' Report) Rules, 1988 is given in the (Annexure III) to this report.

HUMAN RESOURCES:

There are no employees as on date on the rolls of the Company who are in receipt of Remuneration which requires disclosures under Section 134 of the Companies Act, 2013 and Companies (Particulars of Employees) Rules, 1975.

During the year under review, relationship with the employees is cordial.

VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been established.

RESERVES:

We propose to transfer Nil of the net profit for the year to the general reserve and another Nil to capital reserve. We propose to transfer Nil of the net profit for the year to the general reserve and another Nil to capital reserve

APPRECIATION:

The Directors wish to place on record their appreciation to employees at all levels for their co- operation. Your directors would also acknowledge the continued support of the Company's Shareholders, Bankers, Exhibitors, Distributors, and all others that contributed to the success of the company.

By Order of the Board of Directors For M/s. SOWBHAGYA MEDIA LIMITED

Sd/-

K.RAMAKRISHNA PRASAD MANAGING DIRECTOR

Sd/- M. MADHUSUDANA RAO DIRECTOR


Mar 31, 2014

TO THE MEMBERS

The Directors present their report for the Financial Year 2013-14 along with the material events that have taken place till the date of this report

Financial Results (Rs. In Lakhs)

As on As on Particulars 31.03.2014 31.03.2013

1. Net Sales/Income from Operations 296.53 528.60

2. Total Operating Expenditure 386.82 485.69

3. Profit from Operations before Other Income, (90.29) 42.91 Interest and Exceptional Items (1-2)

4. Other Income 9.56 7.55

5. Interest 0.73 1.40

6. Profit ( )/ Loss (-) from Ordinary Activities (81.46) 49.06 before tax

7. Tax Expense (25.04) 8.60

8. Net Profit ( )/ Loss (-) from Ordinary Activities (56.42) 40.46 after tax

9. Paid-up equity share capital 1,093.00 1,093.00 (Face Value of the Share shall be indicated) Rs.10/- Each Rs.10/- Each

10. Earnings Per Share (0.52) 0.37



Business Operations

Your Company reported total income of Rs. 296.53 Lakhs for the financial year ended March 31, 2014. Lack of proper avenues in the last Financial Year has resulted in loss. However, in the current financial year, Management is planning to take few steps ahead and contribute to profit. The first initiative towards this drive is launching of the T V Serial "Gokulamlo Seetha".

DIVIDEND:

Your Directors have not recommended any dividend for Current Financial Year

PROSPECTS/NEW PROJECTS:

Your company has plans for expansion and Diversification. At the 19th Annual General Meeting, your company is happy to inform that various growth options are being considered to enhance that the company''s future revenues.

MANAGEMENT DISCUSSION & ALANYSIS REPORT

As required by Clause 49 of the Listing Agreements with Stock Exchanges, the Management discussion and Analysis Report is enclosed as a part of this report (Annexure - I).

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2014-2015 to MSE and BSE where the Company''s Shares are listed

DEMATERIALISATION OF SHARES:

93.73% of the company''s paid up Equity Share Capital is in dematerialized form as on 31st March, 2014 and balance 6.27% is in physical form.

The Company''s Registrars are M/s XL Softech Systems Ltd., 3 Sagar Society, Road No.2, Banjara Hills, Hyderabad - 500 034.

DIRECTORS:

Sri K. Ramakrishna Prasad, is a Bachelor''s Degree from Andhra University with more than three decades experience in media and publishing industry. He has successfully led a number of publications from their inception to commercial success. He brings in rich experience of handling the intricacies of media and publishing businesses. He has handled both the advertising agencies and well as publications and has good understanding of both the sides of the advertisement operations. He was on the Editorial Board of Yugavani in the 1970s.

Sri V. Kishore, is a commerce graduate and an Independent Director with two decades of experience in Regional Entertainment Industry. He is known for his turnaround strategy in business.

Sri M. Madhusudana Rao, Years is a Honours Graduate in Commerce, Master''s Degree Holder in Business Administration and has a Legal Degree, with more than 12 Years of Experience in Finance. He is a market leader within this sector and has handled the larger division of our organization with his extensive exposure. He would ensure the organization has continued growth and expansion in this challenging and rewarding environment with his knowledge. He works effectively to manage the day to day running of Finance Function and has credible track record in Media & Entertainment Industry.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under section 217 (2AA) of the companies act, 1956 Directors of your Company hereby state and confirm that:

1. The applicable Accounting Standards have been followed in preparation of annual accounts;

2. The accounting policies selected were applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the State of affairs of the Company as at 31st march, 2014 and of the proit 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 Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Annual Accounts for the year ended 31st March, 2014 have been prepared on a going concern basis;

AUDIT OBSERVATIONS:

Auditors'' observations are suitably explained in notes to the Accounts and are self-explanatory.

AUDITORS

The Auditors, M/s Ganeshvenkat & Co., Chartered Accountants, Hyderabad retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

CORPORATE GOVERNANCE AND SHAREHOLDERS'' INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report (Annexure II).

Certificate from the Statutory Auditors of the company M/s Ganesh Vekat & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in Directors'' Report) Rules, 1988 is given in the (Annexure III) to this report.

HUMAN RESOURCES:

There are no employees as on date on the rolls of the Company who are in receipt of Remuneration which requires disclosures under Section 217 (2A) of the Companies Act, 1956 and Companies (Particulars of Employees) Rules, 1975.

During the year under review, relationship with the employees is cordial.

VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been established.

RESERVES:

We propose to transfer Nil of the net profit for the year to the general reserve and another Nil to capital reserve. We propose to transfer Nil of the net profit for the year to the general reserve and another Nil to capital reserve

APPRECIATION:

The Directors wish to place on record their appreciation to employees at all levels for their co- operation. Your directors would also acknowledge the continued support of the Company''s Shareholders, Bankers, Exhibitors, Distributors, and all others that contributed to the success of the company.

By Order of the Board of Directors By Order of the Board of Directors For M/s.SOWBHAGYA MEDIA LIMITED For M/s.SOWBHAGYA MEDIA LIMITED

Sd/- Sd/- (K.RAMAKRISHNA PRASAD) (M. MADHUSUDANA RAO) MANAGING DIRECTOR DIRECTOR


Mar 31, 2013

TO THE MEMBERS

The are delighted to present the Report on our Business and Operations for the year Ended 31st March, 2013.

Your Directors present their report for the Financial Year 2011-2012 along with the material events that have taken place till the date of this report

(Rs. In Lakhs)

As on As on 31.03.2013 31.03.2012

1. Net Sales/Income from Operations 903.85 528.60

2. Total Operating Expenditure 870.76 485.69

3. Profit from Operations before Other Income, Interest and Exceptional Items (1-2) 33.09 42.91

4. Exceptional Items 17.06 0

5. Profit ( )/ Loss (-) from Ordinary Activities before tax 16.14 49.06

6. Tax Expense 9.87 8.60

7. Net Profit ( )/ Loss (-) from Ordinary Activities after tax 6.27 40.46

8. Paid-up equity share capital 1,093.00 1,093.00

(Face Value of the Share shall be indicated) Rs. 10/-Each Rs.10/-Each

9. Earnings Per Share 0.06 0.37



Business Operations

Your Company reported total income of Rs. 903.85 Lakhs for the financial year ended March 31, 2013. Inspite of the Hush in the Market, we still could make profit of Rs. 6.27 Lakhs in the Financial Year 2012-13.

The company''s activities are production and telecasting Daily Mega Serials in Eenadu and Zee Television. Apart from that the Company also deals with Movie Remake and Dubbing Rights.

Currently the company is successfully telecasting two TV serials "Abhishekam", "Kumkuma Rekha". Last year the Company h as hosted a Comedy Show "Comedy Club" and also a Game Show "Abhimani"

In the last year, the company has acquired the Distribution Rights for Nizam Area of the Telugu Mega Movie - "Panjaa''-Starring Pawan Kalyan,

NEW PROJECTS:

Your company has plans for expansion and Diversification. At the 18th Annual General Meeting, your company is happy to inform that various growth options are being considered to enhance that the company''s future revenues.

RESERVES:

We propose to transfer Nil of the net profit for the year) to the general reserve and another Nil to capital reserve.

DIVIDEND:

Your Directors have not recommended any dividend for Current Financial Year.

DIRECTORS:

Sri K. Ramakrishna Prasad, aged 67 Years is a Bachelor''s Degree from Andhra University with more than three decades experience in media and publishing industry. He has successfully led a number of publications from their inception to commercial success. He brings in rich experience of handling the intricacies of media and publishing businesses. He has handled both the advertising agencies and well as publications and has good understanding of both the sides of the advertisement operations. He was on the Editorial Board of Yugavani in the 1970s.

Sri E.V. Raja Reddy, aged 46 Years is an independent director. He is a well known personality in the world of Film Distribution and Film Making. He has carved his niche in Financing for Film Projects and has rich knowledge of local pulse of the Regional Audiences. His Skill set includes identifying the turnaround projects, financing the same. He has resigned from services on 13th February, 2013.

Sri V. Kishore, aged 56 years is a commerce graduate and an Independent Director with two decades of experience in Regional Entertainment Industry. He is known for his turnaround strategy in business.

Sri M. Madhusudana Rao, aged 48 Years is a Honours Graduate in Commerce, Master''s Degree Holder in Business Administration and has a Legal Degree, with more than 12 Years of Experience in Finance. He is a market leader within this sector and has handled the larger division of our organization with his extensive exposure. He would ensure the organization has continued growth and expansion in this challenging and rewarding environment with his knowledge. He works effectively to manage the day to day running of Finance Function and has credible track record in Media & Entertainment Industry.

DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of Section 217(2AA) of the Companies Amendment Act,2000, your directors confirm-

i) That in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and loss account for that period.

iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

iv) That the directors had prepared the annual accounts on the going concern basis.

CHIEF ACCOUNTS OFFICER CERTIFICATION

I, Pakeeraiah, Chief Accounts Officer of Sowbhagya Media Limited, do hereby certify to the Board that:

a. We have reviewed financial statements and the cash flow statement for the year ended March 31, 2013 and that to the best of our knowledge and belief:

i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

ii. these statements together present a true and fair view of the company''s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company''s code of conduct.

c. We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d. We have indicated to the Auditors and the Audit committee

i. significant changes in internal control over financial reporting during the year;

ii. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii. Instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company''s internal control system over financial reporting.



Sd/-

Pakeeraiah

Place: Hyderabad.

Date 29th May, 2013.


Mar 31, 2012

The are delighted to present the Report on our Business and Operations for the year Ended 31st March, 2012.

Your Directors present their report for the Financial Year 2011-2012 along with the material events that have taken place till the date of this report

(Rs. In Lakhs)

Particulars Ason particulars 31.03.2012 31.03.2011

1. Net Sales/Income from Operations 903.58 808.12

2. Total Operating Expenditure 887.72 626 72

3. Profit from Operations before Other Income, Interest and Exceptional Items (1-2) 16.13 191.30

4. Deferred Tax Liability (2.41) 43 13

5. Profit ( )/ Loss (-) from Ordinary Activities before tax

6. Tax Expense 71.53

7. Net Profit ( )/ Loss (-) from Ordinary Activities after tax , 7_

8. Paid-up equity share capital 1,93.00 546.50

(Face Value of the Share shall be indicated) Rs.10/- Each Rs.10/- Each

9. Earnings Per Share 0.06 1.40

Business Operations

Your Company reported total income of Rs. 903.85 Lakhs for the financial year ended March 31, 2012. In spite of the unfavorable conditions in the Market, we still could make profit of Rs. 6.27 Lakhs in the Financial Year 2011-12.

The company's activities are production and telecasting Daily Mega Serials in Eenadu and Zee Television. Apart from that the Company also deals with Movie Remake and Dubbing Rights.

Currently the company is successfully telecasting two TV serials "Abhishekam", "Kumkuma Rekha". Last year the Company has hosted a Comedy Show "Comedy Club" and also a Game Show "Abhimani"

In the last year, the company has acquired the Distribution Rights for Nizam Area of the Telugu Mega Movie 'Panjaa'-Starring Pawan Kalyan,

NEWPROJECTS:

Your company has plans for expansion and Diversification. At the 17th Annual General Meeting, your company is happy to inform that various growth options are being considered to enhance that the company's future revenues.

RESERVES:

There is no amount transferred from the Net Profit for the year to the general reserve and another Nil to capital reserve.

DIVIDEND:

Your Directors have not recommended any dividend for Current Financial Year.

DIRECTORS:

Sri K. Ramakrishna Prasad, aged 67 Years is a Bachelor's Degree from Andhra University with more than three decades experience in media and publishing industry. He has successfully led a number of publications from their inception to commercial success. He brings in rich experience of handling the intricacies of media and publishing businesses. He has handled both the advertising agencies and well as publications and has good understanding of both the sides of the advertisement operations. He was on the Editorial Board of Yugavani in the 1970s.

Sri E.V. Raja Reddy, aged 46 Years is an independent director. He is a well known personality in the world of Film Distribution and Film Making. He has carved his niche in Financing for Film Projects and has rich knowledge of local pulse of the Regional Audiences. His Skill set includes identifying the turnaround projects, financing the same.

Sri V. Kishore, aged 56 years is a commerce graduate and an Independent Director with two decades of experience in Regional Entertainment Industry. He is known for his turnaround strategy in business.

Sri M. Madhusudana Rao, aged 48 Years is a Honours Graduate in Commerce, Master's Degree Holder in Business Administration and has a Legal Degree, with more than 12 Years of Experience in Finance. He is a market leader within this sector and has handled the larger division of our organization with his extensive exposure. He would ensure the organization has continued growth and expansion in this challenging and rewarding environment with his knowledge. He works effectively to manage the day to day running of Finance Function and has credible track record in Media & Entertainment Industry.

DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of Section 217(2AA) of the Companies Amendment Act,200, your directors confirm-

i) That in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and loss account for that period.

iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

iv) That the directors had prepared the annual accounts on the going concern basis.

CHIEF ACCOUNTS OFFICER CERTIFICATION

I, Pakeeraiah, Chief Accounts Officer of Sowbhagya Media Limited, do hereby certify to the Board that:

a. We have reviewed financial statements and the cash flow statement for the year ended March 31, 2012 and that to the best of our knowledge and belief :

i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

ii. these statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's code of conduct.

c. We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d. We have indicated to the Auditors and the Audit committee

i. significant changes in internal control over financial reporting during the year;

ii. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii. Instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting.

AUDITORS:

M/s. Ganeshvenkat & Co., Chartered Accountants, Hyderabad, as Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and eligible for re- appointment.

The company has received letters from M/s.Ganeshvenkat & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

The observations and comments given by Auditors in this report read together with notes to Accounts are self explanatory and hence do not call for further comments under Section 217 of the Companies Act, 1956.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

PARTICULARS OF EMPLOYEES:

No employees was in receipt of Remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956 and the rules framed there under, as amended to date.

FIXED DEPOSITS:

Your company has not accepted any deposits and as such no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information under section 217(1) (e) of the companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988.

A. Conservation of Energy : Not Applicable.

B. Technology Absorption : The Company has not imported any Technology.

C. Foreign Exchange Earnings & Outgo:

Foreign Exchange Earnings: Nil

Foreign Exchange Outgo : Nil

CORPORATE GOVERNANCE:

A report on Corporate Governance, along with a certificate for compliance with the Clause 49 of the Listing Agreement issued by the Practicing Company Secretary is provided elsewhere in the Annual Report.

Your company driven by a desire to be more competitive and recognized globally had inculcated more than a decade ago the rules that define ethical business, much before it was introduced as statutory compliance through clause 49 of the Listing Agreement.

Your company firmly believes that building a culture of compliance is more than meeting regulations and standards and practicing corporate governance in spirit and not just the letter of law.

We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas

We have complied with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI).

For fiscal year 2012, the compliance report is provided in the Corporate Governance section of the Annual Report. The auditors' certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors' report section.

The Company's shares are listed on Mumbai and Chennai stock Exchanges and the listing fee for the year 2011-2012 has been duly paid.

The Directors wish to place on record their appreciation to employees at all levels for their co- operation. Your directors would also acknowledge the continued support of the Company's Shareholders, Bankers, Exhibitors, Distributors, and all others that contributed to the success of the company.

By Order of the Board of Directors

By Order of the Board of Directors

For M/s.SOWBHAGYA MEDIA LIMITED For M/s.SOWBHAGYA MEDIA LIMITED

Sd/- Sd/-

(K.RAMAKRISHNA PRASAD) (M. MADHUSUDANA RAO)

MANAGING DIRECTOR DIRECTOR


Mar 31, 2011

TO THE MEMBERS

We are delighted to present the Report on our Business and Operations for the year Ended 31st March, 2011.

The Directors present their report for the Financial Year 2010-2011 along with the material events that have taken place till the date of this report

PERFORMANCE OF THE COMPANY

FINANCIAL RESULTS :

(Amount in Lakhs)

Particulars As on As on 31.03.2011 31.03.2010

1. Net Sales/Income from Operations 818.90 573.12 2. Total Operating Expenditure 627.50 568.53

3. Profit from Operations before Other Income, Interest and Exceptional Items (1-2) 191.39 4.59

4. Deferred Tax Liability 43.13 -

5. Profit ( )/ Loss (-) from Ordinary Activities before tax 148.27 8.78

6. Tax Expense 71.53 2.90

7. Net Profit ( )/Loss (-) from Ordinary Activities after tax 76.74 5.88

8. Paid-up equity share capital 546.50 546.50 (Face Value of the Share shall be indicated) (54,65,000 shares @ Rs. 10 each)

9. Earnings Per Share 1.40 0.11

Business Operations

During the Year, the Company started reaping the benefits of the past investments and has increased profitability.

Your Company reported total income of Rs. 8.18.90.234 (Rupees Eight Crores Eighteen Lakhs Ninety Thousand Two Hundred and Thirty Four Only) for the financial year ended March 31, 2011.

The company's activities are production and telecasting Daily Mega Serials in Eenadu and Maa Television. Apart from that the Company also deals with Movie Remake and Dubbing Rights of.

Currently the company is successfully telecasting three serials "Thoorpu Padamara", "Abhishekam" and "Sivaranjani". The Company also sold Movie Remake & Dubbing Rights of for the languages of Tamil, Malayalam and Hindi "Aadivaram Adavariki Selavu"

In the last year, the company has acquired the Distribution Rights for Nizam Area of the Telugu Mega Movie - 'SAKTHI'-Starring Mr. NTR (Junior) and Ms. Illeana.

NEW PROJECTS:

Your company has plans for expansion and Diversification. At the 16th Annual General Meeting, your company is happy to inform that various growth options are being considered to enhance that the company's future revenues.

Your Company has started a new Serial by name "Kumkuma Rekha" after the Close of previous Financial Year. The Serial is to be launched in E TV at the prime timings.

Your Company has started a Weekly Game show by name "Abhimani - katti lanti game show" is being telecast in ETV from 9.30 to 10.30 PM every Tuesday. The game show will start telecast from 21st June, 2011

RESERVES:

We propose to transfer Nil of the net profit for the year) to the general reserve and another Nil to capital reserve.

DIVIDEND:

Your Directors are pleased to recommend divided on Rs. 1.00 (10%) per equity share of on 54,65,000 equity shares of Rs. 10 each aggregating to Rs. 63.72,668.19 (Rupees Sixty Three Lakhs Seventy Two Thousand Six Hundred and Sixty Nine Only) inclusive of Dividend Distribution Tax @ 16.30875% (Rs. 9,07,668.19/-) for the financial year ended 31st March, 2011 which if approved a the ensuing Annual General Meeting, will be paid to

i) All Equity Shareholders whose names appear in the Register of Members as on July 27th , 2011 and

ii) To those whose names as beneficjal owners are furnished by National Securities Depository Ltd. And Central

Depository Services (India) Ltd. For the purpose.

The dividend payout as proposed is in accordance with the Company's Policy of paying, sustainable dividend linked to long term performance, keeping in view the capital needs for the company's growth plans and the desire to achieve optimal financing of Such Plans through internal accruals.

Particulars Amount in Rupees Amt in Lakhs

Capital 5,46,50,000.00 546.50

Dividend Payable 54,65,000.00 54.65

Dividend Distribution Tax © 16.30875% 9,07,668.19 9.08

Total amount 1 63,72,668.19 63.73

DIRECTORS:

Sri K. Ramakrishna Prasad, aged 66 Years is a Bachelor's Degree from Andhra University with more than three decades experience in media and publishing industry. He has successfully led a number of publications from their inception to commercial success. He brings in rich experience of handling the intricacies of media and publishing businesses. He has handled both the advertising agencies and well as publications and has good understanding of both the sides of the advertisement operations. He was on the Editorial Board of Yugavani in the 1970s.

Sri E.V. Raja Reddy, aged 45 Years is an independent director. He is a well known personality in the world of Film Distribution and Film Making. He has carved his niche in Financing for Film Projects and has rich knowledge of local pulse of the Regional Audiences. His Skill set includes identifying the turnaround projects, financing the same.

Sri V. Kishore, aged 55 years is a commerce graduate and an Independent Director with two decades of experience in Regional Entertainment Industry. He is known for his turnaround strategy in business.

Sri M. Madhusudana Rao, aged 47 Years is a Master's Degree Holder in Business Administration with more than 12 Years of Experience in Finance. He is a market leader within this sector and has handled the larger division of our organization with his extensive exposure. He would ensure the organization has continued growth and expansion in this challenging and rewarding environment with his knowledge. He works effectively to manage the day to day running of Finance Function and has credible track record in Media & Entertainment Industry.

DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of Section 217(2AA) of the Companies Amendment Act,200, your directors confirm-

i) That in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and loss account for that period.

iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

iv) That the directors had prepared the annual accounts on the going concern basis.

AUDITORS:

M/s.Ganeshvenkat ft Co., Chartered Accountants, Hyderabad, as Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and eligible for re-appointment.

The company has received letters from M/s.Ganeshvenkat & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

The observations and comments given by Auditors in this report read together with notes to Accounts are self explanatory and hence do not call for further comments under Section 217 of the Companies Act, 1956.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice, the Board of Directors of the Company appointed Sri Mahesh Grandhi , Practicing Company Secretary, to conduct Secretarial Audit of records and documents of the Company. The Secretarial Audit Report for the financial year ended March 31, 2011, is provided in the Annual Report.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

PARTICULARS OF EMPLOYEES:

No employees was in receipt of Remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956 and the rules framed there under, as amended to date.

FIXED DEPOSITS:

Your company has not accepted any deposits and as such no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information under section 217(1) (e) of the companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988.

A. Conservation of Energy: Not Applicable.

B. Technology Absorption:

The Company has not imported any Technology.

C. Foreign Exchange Earnings & Outgo:

Foreign Exchange Earnings: Nil

Foreign Exchange Outgo Nil

CORPORATE GOVERNANCE:

A report on Corporate Governance, along with a certificate for compliance with the Clause 49 of the Listing Agreement issued by the Practicing Company Secretary is provided elsewhere in the Annual Report.

Your company driven by a desire to be more competitive and recognized globally had inculcated more than a decade ago the rules that define ethical business, much before it was introduced as statutory compliance through clause 49 of the Listing Agreement.

Your company firmly believes that building a culture of compliance is more than meeting regulations and standards and practicing corporate governance in spirit and not just the letter of law.

We continue to be a pioneer in benchmarking our corporate governance policies with the best in the world. Our efforts are widely recognized by investors in India and overseas

We have complied with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI).

For fiscal year 2011, the compliance report is provided in the Corporate Governance section of the Annual Report. The auditors' certificate on compliance with the mandatory recommendations of the committee is provided in the Annexure to the directors' report section.

The Company's shares are listed on Mumbai and Chennai stock Exchanges and the listing fee for the year 2010-2011 has been duly paid.

APPRECIATION:

The Directors wish to place on record their appreciation to employees at all levels for their co-operation. Your directors would also acknowledge the continued support of the Company's Shareholders, Bankers, Exhibitors, Distributors, and all others that contributed to the success of the company.

By Order of the Board of Directors For M/s.SOWBHAGYA MEDIA LIMITED



Sd/- Sd/- (K.RAMAKRISHNA PRASAD) (M. MADHUSUDANA RAO) MANAGING DIRECTOR DIRECTOR

Place : Hyderabad Date : 26th June, 2011.

 
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