Mar 31, 2023
Your Directors have pleasure in presenting the Twenty Fourth Annual Report together with the audited financial statements of Entertainment Network (India) Limited [''the Company''/ ENIL''] for the financial year ended March 31, 2023.
The financial statements for the year ended March 31, 2023 have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendments issued thereafter.
1. Financial Highlights
(Rs. in Lakhs) |
||||
Standalone |
Consolidated |
|||
Financial Year |
Financial Year |
Financial Year |
Financial Year |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
Revenue from operations |
41,952.31 |
30,547.38 |
43,997.22 |
31,902.77 |
Other income |
1,888.29 |
1,642.81 |
2,224.97 |
1,681.98 |
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense |
8,639.36 |
5,864.74 |
9,313.35 |
6,200.47 |
Less: Depreciation and amortisation expenses |
7,734.32 |
7,884.07 |
8,504.78 |
8,654.91 |
Profit/(Loss) before Finance Costs, Exceptional items and Tax Expense from continuing operations |
905.04 |
(2,019.33) |
808.57 |
(2,454.44) |
Less: Finance Costs |
1,547.28 |
1,616.26 |
1,665.62 |
1,733.13 |
(Loss) before Exceptional items and Tax Expense |
(642.24) |
(3,635.59) |
(857.05) |
(4,187.57) |
Exceptional items |
(1,778.48) |
- |
(263.13) |
- |
(Loss) before Tax Expense from continuing operations |
(2,420.72) |
(3,635.59) |
(1,120.18) |
(4,187.57) |
Less: Tax Expense (Current & Deferred) |
(472.65) |
(887.53) |
(450.10) |
(877.23) |
(Loss) for the year from continuing operations |
(1,948.07) |
(2,748.06) |
(670.08) |
(3,310.34) |
(Loss) from discontinuing operations |
- |
- |
(382.15) |
(310.69) |
Attributable to: |
||||
Shareholders of the Company |
(1,948.07) |
(2,748.06) |
(1,075.66) |
(3,630.22) |
Non-controlling interest |
NA |
NA |
23.42 |
9.18 |
Balance of profit for earlier years |
53,554.69 |
56,820.15 |
52,443.60 |
56,595.14 |
Other comprehensive income/(Loss) for the year |
(15.85) |
(40.70) |
(15.85) |
(40.70) |
Transfer to Legal Reserves |
- |
- |
(13.29) |
(3.92) |
Dividend paid on Equity Shares |
(476.70) |
(476.70) |
(476.70) |
(476.70) |
Balance carried forward |
51,114.06 |
53,554.69 |
50,862.10 |
52,443.60 |
Non-controlling interest |
- |
- |
62.76 |
29.54 |
2. Financial Performance, Operations and the state of the Company''s affairs
Total income of the Company increased from '' 32,190.19 lakhs during the previous year to
'' 43,840.60 lakhs during the year under review. Loss after tax declined from '' (2,748.06) lakhs during the previous year to loss of '' (1,948.07) lakhs during the year under review.
On a consolidated basis, for continued operations, total income of the Company increased from '' 33,584.75 lakhs during the previous year to
'' 46,222.19 lakhs during the year under review. Loss declined from '' (3,310.34) lakhs during the previous
year to loss of '' (670.08) lakhs during the year under review. For discontinued operations loss increased from '' (310.69) Lakhs during the previous year to loss of '' (382.15) Lakhs during the year under review.
During the financial year ended March 31, 2023, based on the business environment and relevant economic and market indicators, the Company identified indicators of impairment of its investment related to its operations in San Francisco. Further, considering the adverse impact of Covid 19 since the launch of operations in the Kingdom of Bahrain and huge quantum of license fees payable to the Ministry of Information Affairs (MOIA), the said operations had
become unsustainable in the financial year under review. As a result, the Company identified and recorded impairment of its investment related to the operations in the Kingdom of Bahrain. Kindly refer to Note 46 to the standalone financial statements and Note 49 to the consolidated financial statements for a detailed explanation.
In October 2022, the Company entered into a Share Subscription and Shareholders'' Agreement (''SSHA'') with Spardha Learnings Private Limited (''Spardha'') and others. As a part of SSHA, the Company subscribed to 5 equity shares and 12,932 Pre-Series A2 Compulsorily Convertible Preference Shares (''CCPS''). Total investment constitutes 11.5% of the share capital of Spardha on a fully diluted basis. Spardha is a private limited company engaged, inter-alia, in the business of providing education, training, personalised guidance, and conducting workshops in academics, music, dance, fine-arts and sports through an online platform.
The Company, through its wholly owned subsidiary-Mirchi Bahrain W.L.L., launched radio broadcasting operations in the Kingdom of Bahrain in May 2021. However, considering the adverse impact of Covid 19 since the launch of operations and huge quantum of license fees payables to the Ministry of Information Affairs - Bahrain (MOIA), the operations of the Company had become unsustainable in the current year ended March 31, 2023. Considering this, a notice of termination has been served to MOIA expressing our inability to continue services in the region due to continued losses and high license fees.
In May 2021, the Company''s US subsidiary, Viz. Entertainment Network, LLC (EN. LLC.) had entered into a Time Brokerage arrangement with a US based broadcaster to broadcast radio programmes and content, targeting the South Asian community in the Bay Area - USA. Due to the non-fulfilment of material contractual obligations by the counterparty, business operations of EN. LLC. became unviable. Therefore EN. LLC. issued a termination notice to the counterparty, terminating the Time Brokerage arrangement effective from November 30, 2022.
In April 2023, Hon''ble Madras High Court pronounced its order in the matter of appeals filed by Phonographic Performance Limited (''PPL'') i.e., PPL vs the Company (''ENIL'') and others. The Order was in respect of the appeal filed by PPL in year 2010, challenging the 2% Net Advertisement Revenue (''NAR'') rate fixed by the then Copyright Board (''CRB'') for a period of ten years ending September 2020 (''CRB Order''). As per the said Order, the appeal filed by PPL has been partly allowed and CRB Order is upheld and further modified by fixing a minimum floor rate of '' 660 per needle hour
(effectively 2% of Net Advertisement Revenue (''NAR'') or '' 660 per needle hour, whichever is higher) for the period from 2010-2020. The Company will file a special leave petition before the Hon''ble Supreme Court of India for a stay of the said order.
There were 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 these financial statements relate and the date of this Report. There has been no change in the nature of the business of the Company.
There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of one-time settlement with any bank or financial institution.
The Board of Directors (''Board'') of your Company has decided not to transfer any amount to the reserves for the financial year under review.
Your Directors are pleased to recommend a dividend @ 10% i.e., '' 1.00 (Rupee one only) per equity share of '' 10/- each for the financial year ended March 31, 2023, aggregating '' 476.70 lakhs. The dividend payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM). The Board of Directors has approved and adopted the Dividend Distribution Policy of the Company and dividend recommendation and payout are in accordance with the Company''s Dividend Distribution Policy.
As per the Income-tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the Members. Your Company shall, accordingly, make the payment of the dividend after deduction of tax at source.
The dividend, if declared at the AGM, would be paid within thirty days from the date of declaration of dividend through electronic mode to the Members who have updated their bank account details and dividend warrants/ demand drafts would be dispatched at the registered address of the Members who have not updated their bank account details, to those persons or their mandates:
¦ whose names appear as beneficial owners as at the end of the business hours on Friday, September 15, 2023 in the list of the Beneficial Owners to be obtained from the Depositories i.e., National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL], in respect of the shares held in electronic/ dematerialized mode; and
¦ whose names appear as Members in the Register of Members of the Company as at the end of the business hours on Friday, September 15, 2023, in respect of the shares held in physical mode.
As per the provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the dividend that remains unclaimed/unpaid/ un-encashed for a period of seven years and Equity Shares of the Company, in respect of which dividend entitlements have remained unclaimed or unpaid for seven consecutive years or more, are required to be transferred by the Company to the Investor Education and Protection Fund (''IEPF''), established by the Central Government. Details of the unclaimed dividend amount is available on the Company website - www.enil.co.in at the url: https:// www.enil.co.in/unclaimed-dividend.php. Calendar for transfer of unclaimed dividend to IEPF has been stated in the notes to the Notice convening the AGM. Pursuant to the guidelines issued by the IEPF Authority, Company Secretary has been nominated as the Nodal Officer to facilitate the refund of the claims of the unpaid (unclaimed) dividend (e-mail ID: mehul. [email protected]).
The shareholders whose dividend / shares are/ will be transferred to the IEPF Authority can claim the same from IEPF Authority by following the Refund Procedure as detailed on the website of IEPF Authority: http:// www.iepf.gov.in at http://www.iepf.gov.in/IEPF/ refund.html.
The Company has transferred '' 16,433, being the unpaid or unclaimed dividends declared for the financial year 2014-15 and 559 equity shares to the IEPF Authority as per the provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Details of dividends and shares transferred to the IEPF Authority are available on the Company website-www.enil.co.in at the url: https://www.enil.co.in/ unclaimed-dividend.php and also on the website of IEPF Authority and the same can be accessed through the link: www.iepf.gov.in.
The Company has not accepted any deposit from the public / members under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review. Consequently, there is no requirement of furnishing details related to deposit covered under Chapter V of the Companies Act, 2013.
6. Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 (''the Act'') read with the applicable rules thereto, Mr. Vineet Jain (DIN: 00003962) retires by rotation at the ensuing AGM and being eligible, offers himself for reappointment. The Board of Directors recommends the reappointment of Mr. Vineet Jain as the Director of the Company.
Mr. Yatish Mehrishi (PAN: AEXPM1887N) was appointed as the Chief Executive Officer and Key Managerial Personnel effective from November 1, 2022. Members of the Company, through Postal Ballot Voting Process on April 26, 2023, approved the reappointment of Ms. Sukanya Kripalu (DIN: 06994202) as the Independent Director for the second term of five consecutive years commencing from May 23, 2023 and also approved the appointment of Mr. Yatish Mehrishi as the Manager as per the provisions of the Companies Act, 2013 for a period of five years commencing from April 1, 2023.
In May 2023, the Board of Directors considered and approved the reappointment of Mr. Subramanian Narayanan (Mr. N. Subramanian) (DIN: 03083775) as the Executive Director & Group Chief Financial Officer (''ED & Group CFO'') of the Company for the term of five years commencing from November 2, 2023.
Mr. Prashant Panday resigned from the position of the Managing Director as well as Directorship of the Company with effect from the close of business hours on January 31, 2023 due to other preoccupations. The Board of Directors places on record their appreciation for the invaluable contributions made by Mr. Prashant Panday, Managing Director, who has served the Company for more than two decades and built the Brand Mirchi into a power brand over the last twenty-two years.
The Company has received the consent, declarations and confirmations from all the Independent Directors of the Company pursuant to the provisions of Section 149 and all other applicable provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [''Listing Regulations''] stating that they meet the criteria of independence as provided under the Act and the Listing Regulations and that they are not disqualified to become directors under the Act. All the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence and that they are independent of the management. The Board of Directors took on record the said declarations and confirmations submitted by the Independent Directors under applicable provisions of the Act and the Listing Regulations after undertaking due assessment of the veracity of the same. In the opinion of the Board of Directors, all the Independent Directors fulfill the criteria of independence as provided under the Act, rules made thereunder, read with the Listing Regulations and that they are independent of the management.
The Board of Directors is of the opinion that all the Independent Directors of the Company hold the highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.
All the Independent Directors have confirmed that they have complied with the provisions of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 regarding applying online to the Indian Institute of Corporate Affairs at Manesar (''IICA'') for inclusion of their names in the databank maintained by IICA and also filed the application for renewal of the same. They have also confirmed that they are exempted from the requirement to pass the online proficiency self-assessment test under the aforesaid Rule.
The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and the Code of Conduct for directors and senior management personnel formulated by the Company.
The Company has received all the relevant consent, documents, declarations, confirmation from the director proposed to be reappointed and he is not disqualified to become the director under the Act.
As per the requirement of the circular from the stock exchange (no: LIST/COMP/14/2018-19 Dated June 20, 2018), the Board of Directors and its Nomination and Remuneration Committee, while considering the appointment and reappointment of the directors, have verified that they are not debarred from holding the office of director pursuant to any SEBI order or any other such authority. Accordingly, the Company affirms that the Director proposed to be reappointed is not debarred from holding the office of director by virtue of any SEBI order or any other such authority.
Certificate from the Company Secretary in Practice has been attached with the Report of Corporate Governance, confirming that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board (SEBI)/ Ministry
of Corporate Affairs or any such statutory authority.
As stipulated under the Listing Regulations and Secretarial Standards, details in respect of the director seeking reappointment at the AGM, inter-alia, age, qualifications, experience, details of remuneration last drawn by such person, relationship with other directors and Key Managerial Personnel of the Company, the number of Meetings of the Board attended during the year and other directorships, membership/ chairmanship of the committees of other Boards, shareholding, etc. are annexed to the Notice convening the AGM.
None of the Directors are related with each other or key managerial personnel (inter-se).
Details of the number of meetings of the Board of Directors and Committees and attendance at the meetings have been furnished in the Report on Corporate Governance.
Following persons are designated as the Key Managerial Personnel (KMP):
¦ Mr. Yatish Mehrishi: Manager & Chief Executive Officer
¦ Mr. N. Subramanian: Executive Director & Group CFO
¦ Mr. Mehul Shah: EVP Compliance & Company Secretary
7. Annual evaluation of performance of the Board, its Committees and individual directors
The Board of Directors is committed to continued improvement in its effectiveness. Accordingly, the Board, its Committees and individual directors participated in the annual formal evaluation of its performance. This was designed to ensure, amongst other things, that the Board, its Committees and each director continue to contribute effectively.
Evaluation of the performance of the Board, its Committees and individual directors involved structured questionnaire-driven discussions that covered a number of key areas / evaluation criteria including the roles and responsibilities, size and composition of the Board and its Committees, meaningful and constructive contribution and inputs in the meetings, dynamics of the Board and its Committees and the relationship between the Board and management. Chairman of the Board of Directors had meetings with the Independent Directors. Chairman of the Nomination & Remuneration Committee had meetings with the Non- Independent Directors. Independent Directors, at their Meeting led by the Chairman of the Nomination & Remuneration
Committee, reviewed the performance of the Chairman, Non-Independent Directors and the Board as a whole in respect of the financial year under review. The Independent Directors, in the said meeting, also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. These meetings were intended to obtain Directors'' inputs on effectiveness of the Board/ Committee processes. The evaluation of the Independent Directors was done by the entire Board of Directors which included performance of the Directors and fulfillment of the independence criteria as specified in the Listing Regulations and their independence from the management. In the above evaluation, the Directors who were subject to evaluation did not participate. The results of the evaluation were discussed with the relevant Committees and collectively by the Board as a whole. Constructive feedback was also sought on the contributions of individual Directors.
Formal Annual Evaluation was made in compliance with all the applicable provisions of the Act and the Listing Regulations. During the Board Evaluation, it was observed that the Board of Directors, as a whole, is functioning as an integrated body helping the board discussion to be rich and value adding. The Board has an optimum balance of discussion between operational and strategic issues. The Board is proactively engaged on the key matters concerning talent, strategy, governance, etc. There are specific areas identified by the Board as a part of this evaluation exercise for the Board to engage itself with. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
8. Board Familiarization Program
At the time of appointment of a new director, through the induction process, he/ she is familiarized with the Company, director''s roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Detailed presentations are made before the Board Members at the Board and its Committee meetings covering various areas including business strategy, branding, programming, financial performance and forecast, compliances/ regulatory updates, audit reports, risk assessment and mitigation, etc. The details of the familiarization program are available on the Company''s website at: https://www.enil.co.in at web link: https://www.enil.co.in/policies-and-code-of-conduct.php
9. Policy on directors'' appointment and remuneration
The Company''s Policy on the Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matters as provided under Section 178 of the Act is titled as Nomination & Remuneration Policy, and is available on the Company''s website at: https://www.enil.co.in at web link: https://www.enil. co.in/policies-and-code-of-conduct.php and also appended as Annexure A to this Report.
The Company has an adequate and functional ''Whistle Blower Policy'' / ''Vigil Mechanism'' in place. The objective of the Vigil Mechanism is to provide the employees, directors, customers, vendors, contractors and other stakeholders of /in the Company an impartial and fair avenue to raise genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct and seek redressal, in line with the Company''s commitment to the highest possible standards of ethical, moral and legal business conduct and fair dealings with all its stakeholders and constituents and its commitment to open communication channels. Vigil Mechanism provides adequate safeguards against victimization of persons who use such mechanism for whistle blowing in good faith and it also ensures that the interests of the person who uses such Mechanism are not prejudicially affected on account of such use. The Board of Directors affirms and confirms that no personnel have been denied access to the Audit Committee. The Policy contains the provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/ Vigil Mechanism is available on the Company''s website at: https://www.enil.co.in at web link: https://www.enil.co.in/policies-and-code-of-conduct.php
The Audit Committee of the Company consists of the following Directors as on the date of this Report:
¦ Mr. N. Kumar - Chairman (Independent NonExecutive Director)
¦ Mr. Ravindra Kulkarni (Independent NonExecutive Director)
¦ Mr. Richard Saldanha (Independent NonExecutive Director)
¦ Ms. Sukanya Kripalu (Independent Non- Executive Director)
The Internal Auditors of the Company report directly to the Audit Committee. All the recommendations of the Audit Committee were accepted by the Board of Directors. Brief description of terms of reference and other relevant details of the Audit Committee have been furnished in the Report on Corporate Governance.
The constitution, composition, quorum requirements, terms of reference, role, powers, rights, obligations of Corporate Social Responsibility Committee [''CSR Committee''] are in conformity with the provisions of Section 135 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and all other applicable rules made under the Companies Act, 2013 (including any statutory modification(s) or re-enactment or amendments thereof).
The CSR Committee of the Company consists of the following Directors as on the date of this Report:
¦ Mr. Vineet Jain - Chairman (Non- Executive Director)
¦ Mr. Ravindra Kulkarni (Independent NonExecutive Director)
¦ Mr. N. Subramanian (Executive Director & Group CFO)
During the financial year under review, the Committee met on May 6, 2022.
Brief description of terms of reference of the Committee inter-alia includes:
¦ Formulating and recommending to the Board of Directors (Board), a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
¦ Recommending the amount of expenditure to be spent on the CSR activities to be undertaken by the Company;
¦ Monitoring the CSR Policy of the Company from time to time;
¦ Formulating and recommending to the Board, an Annual Action Plan in pursuance of its CSR Policy, which shall include:
- the list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;
- the manner of execution of such projects or programmes;
- the modalities of utilisation of funds and implementation schedules for the Provided projects or programmes;
- monitoring and reporting mechanism for the projects or programmes; and
- details of need and impact assessment, if any, for the projects undertaken by the company;
¦ Approving specific projects, either new or ongoing, in pursuance of the CSR Policy and the Annual Action Plan;
¦ Recommending to the Board any alteration in the Annual Action Plan approved by the Board along with reasonable justification;
¦ Monitoring, reviewing the progress of the CSR initiatives undertaken and reporting of the CSR activities to the Board from time to time;
¦ Satisfying the Board on the utilization of the funds disbursed for the purpose and in the manner approved by it;
¦ Reviewing and recommending to the Board, the Annual Report on CSR activities to be included in the Board''s report;
¦ Reviewing and recommending to the Board, if and to the extent applicable, the need for impact assessment of the projects and appointment of impact assessment agency and the impact assessment report to be obtained by the Company from time to time;
¦ Undertaking such activities and carrying out such functions as may be provided under Section 135 of the Act and the rules issued thereunder.
CSR Policy development and implementation:
The CSR Policy is available on the Company''s website at: https://www.enil.co.in at web link: https://www. enil.co.in/policies-and-code-of-conduct.php
CSR Policy Statement and Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure B to this Report.
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company comprises of the following Directors as on the date of this Report:
¦ Mr. N. Kumar - Chairman (Independent NonExecutive Director)
¦ Mr. Ravindra Kulkarni (Independent NonExecutive Director)
¦ Mr. Richard Saldanha (Independent NonExecutive Director)
¦ Ms. Sukanya Kripalu (Independent Non- Executive Director)
¦ Mr. Vineet Jain (Non- Executive Director)
Brief description of terms of reference and other relevant details of the Nomination and Remuneration Committee have been furnished in the Report on Corporate Governance.
14. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company comprises of the following Directors as on the date of this Report:
¦ Mr. Richard Saldanha - Chairman (Independent Non- Executive Director)
¦ Mr. Ravindra Kulkarni (Independent NonExecutive Director)
¦ Mr. N. Subramanian (Executive Director & Group CFO)
Brief description of terms of reference and other relevant details of the Stakeholders Relationship Committee have been furnished in the Report on Corporate Governance.
The Audit Report does not contain any qualification, reservation or adverse remark or disclaimer. The Statutory Auditors of the Company have not reported any details in respect of frauds as specified under Section 143(12) of the Act.
The Members of the Company, at the 23rd AGM held on September 27, 2022, had approved the appointment of Walker Chandiok & Co LLP, Chartered Accountants (ICAI Firm Registration number - 001076N/ N500013) as the Statutory Auditors of the Company for a term of five consecutive years, to hold the office commencing from the conclusion of the 23rd AGM till the conclusion of the 28th AGM. Walker Chandiok & Co LLP, Chartered Accountants have stated that they satisfy the criteria provided in Section 141 of the Act.
17. Secretarial Auditor and report
The Board of Directors had appointed M/s. Hemanshu Kapadia & Associates, Company Secretaries (C. P. No: 2285), to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the financial year ended March 31, 2023 is appended as Annexure C-1 to this Report. The Secretarial
Compliance Report for the financial year ended March 31, 2023 is appended as Annexure C-2 to this Report.
The Secretarial Audit Report dated April 30, 2023 and Secretarial Compliance Report dated April 30, 2023 do not contain any qualification, reservation or adverse remark or disclaimer.
The Board of Directors, on recommendation of the Audit Committee and pursuant to Section 148 and all other applicable provisions of the Act, read with the Companies (Audit and Auditors) Rules, 2014 and all other applicable rules made under the Act (including any statutory modification(s) or re-enactment thereof for the time being in force), has approved the appointment and remuneration of the Cost Auditors, M/s. R. Nanabhoy & Co., Cost Accountants (Firm registration number- 00010) to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2024. The aforesaid appointment of M/s. R. Nanabhoy & Co. is subject to the relevant notifications, orders, rules, circulars, etc. issued by the Ministry of Corporate Affairs and other regulatory authorities from time to time. The remuneration payable to M/s. R. Nanabhoy & Co. shall be '' 4,75,000 (Rupees four lakhs seventy five thousand only) plus out of pocket expenses and applicable taxes for the aforesaid audit. The remuneration payable to the Cost Auditors is required to be ratified subsequently by the shareholders. Accordingly, consent of the members has been sought for passing the resolution as set out at Item No. 4 of the Notice convening the AGM for ratification of the remuneration payable to the Cost Auditors for the financial year ending on March 31, 2024.
Maintenance of cost records as specified by the Central Government under Sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company and accordingly, such accounts and records are made and maintained.
The Cost Audit Report for the financial year 202122 was filed on September 3, 2022. The Cost Audit Report for the financial year 2022-23 will be filed on/ before the due date.
19. Conservation of Energy, Technology absorption and Foreign exchange earnings and Outgo
The Company is in the business of Private FM Radio Broadcasting. Hence, most of the information required to be provided relating to the Conservation of energy and Technology absorption is not applicable.
However, the information, as applicable, is given hereunder:
(a) Conservation of energy:
(i) Steps taken or impact on conservation of
energy and the steps taken by the Company
for utilising alternate sources of energy:
- Energy Conservation: We increased the efforts already executed in the preceding years by regulating the electrical consumption at the transmitters, studios and offices, which has resulted in substantial savings in energy cost in the financial year under review.
- Optimization of office spaces: As a part of our continuous efforts in office space restructuring, we rationalised office space at more locations with an efficient office design using LED lights and energy efficient electronic devices that has contributed to reduction of about 40% in the energy consumption.
- We have maximized energy savings in AC units. Air conditioner (AC) usage patterns are monitored regularly to reduce electricity consumption without any extra capital investment. AC units are set at optimum temperatures based on ambient conditions, e.g., Studio ACs are set at not less than 25 degrees temperature. This has helped achieve substantial savings. Transmitter power is optimally reduced in the night band when listenership is low, and the ambient temperature is lower. We continue to replace old conventional fixed speed ACs with Inverter/ VRV ACs for better energy savings.
- We have successfully implemented a pilot project by installing a Smart Room Cooling (SRC) at a transmission site for energy savings in air-conditioning. Existing comfort ACs were replaced with a highly efficient industry grade product. Due to its longer life, capex will be avoided for around 10-12 years which otherwise would be incurred on replacing regular ACs periodically. The product has higher airflow with lower energy consumption resulting in a short payback period.
- UPS upgrades and load reassessment helped us reduce our connected load across stations over the years by more
than 300 KW.
(ii) Capital investment on energy conservation equipments: '' 6.30 lakhs
(b) Technology absorption:
(i) The efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution: Your Company has consistently taken initiatives to improve productivity and increase efficiencies in processes.
- A Contest and Merchandise management tool was developed in SharePoint and hosted on Azure Cloud. The workflow increased efficiency and improved inventory management in the Contest management process. The tool also simplifies the process of monitoring contest entries and managing winners, making it easier to track and measure the success of contests.
- A Creative brief approval workflow was developed and deployed on SharePoint and hosted on the MS Azure Cloud. We automated the process of filing a creative brief to Programming or Brewery teams for their review and approval. The workflow is currently used by teams in 55 stations, substantially improved productivity, saved time and helps archive creatives for future reference.
- HR onboarding process was automated with SAP and integrated with satellite system. This has resulted in reducing the turn-around-time of the HR team for hiring and data synchronization, increased efficiency and reduced operating costs.
- An API solution was developed for automating customer payment transactions made through HDFC Bank. The inbound interface developed between HDFC Bank and SAP ERP enabled us to reduce manual effort and errors, provide daily receipts reconciliation and track new customers, thus increasing team productivity.
- Hub Station Optimization: Successfully replicated Hub station optimization for remote networked stations in Maharashtra. The centralized solution resulted in optimal use of manpower
and resources and savings in both capex and operating expenses.
- RCS ZettaCloud on Triton: Implemented RCS ZettaCloud for playout of 39 deferred streams of 13 FM stations in 3 different time zones (PST, EST, GST) on the Triton audio streaming platform for Mirchi App.
- Infrastructure enhancement: With the focus on Digital businesses, we expanded the infrastructure of our existing private cloud. This not only augmented our goal of space and energy savings, but also gave us the complete control of setting up new playout systems instantly by using the scalability and flexibility parameters of the private cloud.
- We continue to replace older analog consoles with IP consoles due to their ease of installation, maintenance and flexibility.
- Benefits derived: Improvement in processes, higher productivity, cost effectiveness, time-savings, energy conservation are some of the major benefits derived.
(ii) Imported technology (imported during last three years reckoned from the beginning of the financial year): The Company has not imported any new technology in this financial year. Nevertheless, the Company has continued to use the latest equipment and software for its business activities.
(iii) The expenditure incurred on Research & Development (R & D):
The Company has not spent any amount towards research and development activities. The Company has been active in harnessing the latest technology available in the industry.
(c) Foreign exchange earnings and outgo:
The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.
('' in lakhs) |
||
Financial Year |
Financial Year |
|
2022-23 |
2021-22 |
|
Foreign exchange earnings |
1,249.11 |
643.91 |
Foreign exchange outgo |
816.79 |
1,212.05 |
Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure D to this Report.
The Managing Director and Executive Director of the Company do not receive any remuneration or commission from the Company''s holding or subsidiary companies.
As per the provisions of Section 197 of the Act read with the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other relevant particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of the Annual Report. As per the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is made available for inspection by the Members in electronic mode basis the request being sent on [email protected] without payment of fee and same will also be available during the AGM. Any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report is available on the Company''s website at: www.enil.co.in.
Pursuant to Section 92(3) read with Section 134(3)
(a) of the Act, the Annual Return of the Company is available at the Company''s website: (https://www. enil.co.in) at url: https://www.enil.co.in/financials-annual-reports.php.
22. Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
¦ any shares, debentures, bonds, warrants or securities;
¦ any equity shares with differential rights as to dividend, voting or otherwise;
¦ any shares to its employees under the Employees Stock Option Scheme;
¦ any sweat equity shares.
During the financial year under review, the Company has not bought back its shares, pursuant to the provisions of Section 68 of the Companies Act, 2013 and Rules made thereunder.
No shares are held in trust for the benefits of
employees. There is no change in the capital structure of the Company during the financial year under review.
The equity shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) since February 15, 2006. Annual Listing Fee has been paid to each exchange. As required under the Listing Regulations, the Company has executed the Uniform Listing Agreement with BSE and NSE.
23. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under review as stipulated under Regulation 34 of the Listing Regulations is set out in a separate section forming part of this Report.
The Company has adopted Integrated Reporting. The information related to the Integrated Reporting forms part of the Management Discussion & Analysis and Integrated Reporting has also been hosted on the website of the Company: (https://www.enil.co.in) at url: https://www.enil.co.in/financials-annual-reports. php.
24. Business Responsibility & Sustainability Report
As per Regulation 34 of the Listing Regulations, the Company has published a separate Business Responsibility & Sustainability Report (''BRSR'') for the financial year under review and is attached as Annexure E to this Report.
The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated under the Listing Regulations. A separate Report on Corporate Governance is enclosed as a part of this Report along with the Certificate from the Practicing Company Secretary.
The Company complies with the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
27. Directors'' Responsibility Statement
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts for the financial year ended on March 31, 2023, the applicable accounting standards have been followed and that there are no material departures
from the same;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2023 and of the loss of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
28. Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company during the financial year under review with related parties were in the ordinary course of business and on an arm''s length basis.
Bennett, Coleman & Company Limited (''BCCL'') is the holding company and a related party under Section 2(76) of the Companies Act, 2013 and Regulation 2(1) (zb) of the Listing Regulations.
In order to achieve efficiencies in Ad sales, business synergies, economics of scale and also to optimize costs, the Company and BCCL have entered into various contracts/ arrangements/ transactions relating to the transfer and / or availing of resources, services or obligations in the past and propose to continue with such contracts/ arrangements/ transactions in the future too.
In compliance with Regulation 23 of the Listing Regulations, Members of the Company granted approval for the contracts/ arrangements/ transactions entered into and/ or to be entered into with BCCL relating to the transfer and / or availing of resources, services or obligations, for each of the five financial years of the Company commencing from April 1, 2020, exceeding ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company but not
exceeding the aggregate value of '' 200 crore (Rupees two hundred crore only) per annum, on such terms and conditions as may be mutually agreed between the Company and BCCL.
Details of the Material Related Party Transactions entered during the year by the Company, as required under Section 134(3) (h) of the Act (in the Form AOC 2) is attached as Annexure F to this Report.
The Company''s Policy on Materiality of related party transactions and dealing with related party transactions is available on the Company''s website at: www.enil.co.in (url: https://www.enil.co.in/policies-and-code-of-conduct.php).
The related party transactions are entered into based on business exigencies such as synergy in operations, profitability, market share enhancement etc. and are intended to further the Company''s interests. In accordance with the applicable accounting standards, transactions with related parties are furnished in the financial statements.
29. Dividend Distribution Policy
The Company has formulated a Dividend Distribution Policy as required under the Regulation 43A of the Listing Regulations. The said Policy is appended as Annexure G to this Report and also uploaded on the Company''s website at www.enil.co.in (url: https:// www.enil.co.in/policies-and-code-of-conduct.php).
30. Particulars of loans given, investment made, guarantees given and securities provided
The Company has not given any guarantees or provided any securities under Section 186 of the Act. Particulars of loan given to the subsidiary company are provided in Note 39 to the standalone financial statements and the said loan was repaid during the financial year under review. The loan was given for business purposes. Particulars of investments made by the Company during the financial year 2022-23 are provided in Note 8 to the standalone financial statements.
The Board of Directors is responsible for ensuring that the Company has appropriate systems of control in place - in particular, systems for risk management, financial and operational control, and compliance with the laws and relevant standards. Accordingly, the Board oversees the framing, implementing and the monitoring of the risk management plan for the Company. The Board also ensures the integrity of the Company''s accounting and financial reporting systems, including the independent audit.
The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s Risk Management policies, systems and procedures. Internal Audit for the financial year under review has been carried out by Deloitte Touche Tohmatsu India Limited Liability Partnership (''Deloitte''), the independent Internal Auditors. Internal Audit covers key radio stations at pan India level and the corporate office as per the annual audit plan approved by the Audit Committee. Internal Audit report is presented to the Audit Committee on regular basis and the Chairman of the Audit Committee briefs the Board of Directors about the same.
The Company has adopted a Risk Management Policy pursuant to the provisions of Section 134 and all other applicable provisions of the Companies Act, 2013 and Listing Regulations and also established related procedures to inform Board Members about the risk assessment and minimization procedures. The Company has a strong Enterprise Risk Management framework which is administered by the Senior Management team and monitored by the Risk Management Committee. Major risks are identified and mitigation measures are put in place, and the same are also reported to the Audit Committee and Board of Directors along with the action taken report. The Risk Management Policy envisages assessment of strategic risks, operational risks, financial risks, regulatory risks, human resource risks, technological risks.
The Risk Management Policy adopted by the Company involves identification and prioritization of risk events, categorization of risks into High, Medium and Low based on the business impact and likelihood of occurrence of risks and Risk Mitigation & Control.
The Risk Management Committee of the Company comprises of the following members as of the date of this Report:
¦ Mr. Vineet Jain (Non-Executive Chairman)
¦ Mr. N. Kumar (Independent Director)
¦ Mr. N. Subramanian (Executive Director & Group CFO)
¦ Mr. Yatish Mehrishi (CEO)
A brief description of terms of reference and other relevant details of the Risk Management Committee have been furnished in the Report on Corporate Governance.
32. Internal Financial Controls
The Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s
policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The Company has in place adequate internal financial controls with reference to the financial statements. The Company''s internal control systems, including internal financial controls, are commensurate with the nature of its business and the size and complexity of its operations and same are adequate and operating effectively. These systems are periodically tested and no reportable material weakness in the design or operation was observed. The Audit Committee reviews the adequacy and effectiveness of the Company''s internal control system including internal financial controls.
33. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting standards, the audited consolidated financial statements are provided and form part of the Annual Report.
The Company has the following subsidiaries:
¦ Alternate Brand Solutions (India) Limited (ABSL), a 100% subsidiary based in India. ABSL recorded a total income of '' 46.25 lakhs during the financial year ended March 31, 2023, as compared to '' 89.52 lakhs during the financial year ended March 31, 2022. Profit after Tax stood at '' 32.57 lakhs for the financial year ended March 31, 2023, as compared to Profit of '' 32.57 lakhs during the financial year ended March 31, 2022.
¦ Entertainment Network, INC (EN, INC) and a step-down subsidiary, Entertainment Network, LLC (EN, LLC) based in the United States of America. EN, INC is a 100% subsidiary of the Company. EN, LLC is the 100% subsidiary of EN, INC. EN, INC recorded a total consolidated income of '' 1,515.38 lakhs during the financial year ended March 31, 2023, as compared to '' 1,000.46 lakhs during the financial year ended March 31, 2022. Consolidated loss after Tax stood at '' (359.91) lakhs for the financial year ended March 31, 2023 as compared to loss of '' (617.88) lakhs during the financial year ended March 31, 2022.
¦ Global Entertainment Network Limited (GENL) (A company incorporated under the laws of the State of Qatar having its registered office in Doha, Qatar). In March 2021, the Company acquired 49% equity of GENL. The remaining 51% of the
equity stake is owned by another company (Marhaba FM). Basis the shareholding agreement executed by the Company with Marhaba FM, the Company has a controlling interest over GENL. As a result, the investment made in GENL is treated as an investment in a subsidiary as per Ind AS 110- Consolidated Financial Statements. GENL recorded a total income of '' 970.66 lakhs during the financial year ended March 31, 2023, as compared to '' 472.86 lakhs during the financial year ended March 31, 2022. Profit after Tax stood at '' 82.71 lakhs for the financial year ended March 31, 2023, as compared to Profit of '' 36.74 lakhs during the financial year ended March 31, 2022.
¦ Mirchi Bahrain WLL, based in the Kingdom of Bahrain, is a 100% subsidiary of the Company. Mirchi Bahrain WLL became a wholly owned subsidiary of the Company in April 2021. Mirchi Bahrain WLL recorded a total income of '' 462.94 lakhs during the financial year ended March 31, 2023, as compared to '' 393 lakhs during the financial year ended March 31, 2022. Consolidated loss after Tax stood at '' (374.53) lakhs for the financial year ended March 31, 2023, as compared to loss of '' (324.58) lakhs during the financial year ended March 31, 2022.
As per Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of the Subsidiary Companies is attached along with the financial statements in the prescribed Form AOC-1. The Company does not have any associate company or joint venture. There has been no change in the nature of the business of the subsidiaries.
The Company shall make available the financial statements and the related detailed information of its subsidiaries to any Member of the Company or its subsidiaries who may be interested in obtaining the same at any point of time and same is also available on the website: www.enil.co.in. These documents will also be available for inspection by the Members in electronic mode basis the request being sent on [email protected] without payment of fee and same will also be available during the AGM. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies.
The audited financial statements, including consolidated financial statements and all other relevant documents required to be attached thereto are available on the Company''s website: www.enil. co.in.
The Policy for determining material subsidiaries is
available at the Company''s website: www.enil.co.in at https://www.enil.co.in/policies-and-code-of-conduct.php
35. Significant and material order
During the financial year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.
36. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. For building awareness in this area, the Company has been conducting induction/ refresher programmes on a continuous basis. The Company has in place a Policy for prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Company has complied with the applicable provisions of the said Act. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. During the financial year under review, one complaint pertaining to sexual harassment was reported to the Internal Complaints Committee of the Company. After a detailed investigation and following due procedure under the applicable law, guidelines
and regulations, the said complaint was appropriately dealt with during the financial year under review and appropriate action was taken.
Your Directors take this opportunity to convey their appreciation to all the members, listeners, advertisers, media agencies, dealers, suppliers, bankers, regulatory and government authorities and all other business associates for their continued support and confidence in the management of the Company. Your Directors are pleased to place on record their appreciation for the consistent contribution made by the employees at all levels through their hard work, dedication, solidarity and co-operation.
Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting the Nineteenth Annual Report together with the audited financial statements of Entertainment Network (India) Limited [âthe Companyâ/ âENILâ/ âRadio Mirchiâ] for the financial year ended March 31, 2018.
The financial statements for the year ended March 31, 2018 are prepared under Indian Accounting Standards (Ind AS). The Company has adopted all the applicable Ind AS standards and the adoption was carried out in accordance with Ind AS 101.
1. Financial Highlights
Rs. in lakhs
Standalone |
Consolidated |
|||
Financial Year 2017-18 |
Financial Year 2016-17 |
Financial Year 2017-18 |
Financial Year 2016-17 |
|
Total Income |
54,590.52 |
57,537.10 |
54,652.33 |
57,606.07 |
Profit before taxation |
6,149.32 |
7,831.22 |
6,208.79 |
7,896.17 |
Tax expense |
2,633.43 |
2,383.82 |
2,644.80 |
2,379.21 |
Profit after taxation |
3,515.89 |
5,447.40 |
3,563.99 |
5,516.96 |
Other comprehensive income net of tax |
17.45 |
(48.76) |
17.45 |
(48.76) |
Total Comprehensive Income |
3,533.34 |
5,398.64 |
3,581.44 |
5,468.20 |
Profit brought forward |
61,847.42 |
57,022.53 |
62,119.63 |
57,225.19 |
Authorised Capital |
12,000.00 |
12,000.00 |
12,000.00 |
12,000.00 |
Equity (issued, subscribed & paid up share capital) |
4,767.04 |
4,767.04 |
4,767.04 |
4,767.04 |
Transfer to General Reserve |
Nil |
Nil |
Nil |
Nil |
Adjustments due to change in rates of Depreciation |
Nil |
Nil |
Nil |
Nil |
Dividend paid (including dividend distribution tax) |
573.75 |
573.75 |
573.75 |
573.75 |
Surplus carried to Balance Sheet |
64,807.01 |
61,847.42 |
65,127.32 |
62,119.63 |
2. Financial Performance, Operations and the state of the Companyâs affairs
Total income of the Company decreased from Rs.57,537.10 lakhs during the previous year to Rs.54,590.52 lakhs during the year under review. Profit after tax was Rs.3,515.89 lakhs.
On a consolidated basis, total income of the Company decreased from Rs.57,606.07 lakhs during the previous year to Rs.54,652.33 lakhs during the year under review. Profit after tax was Rs.3,563.99 lakhs.
In January 2018, the Company issued Unsecured Commercial Papers (CPs). The amount raised through issuance of CPs was Rs.102.6 crores. The CPs have a tenor of 364 days and will mature in January 2019. The maturity value of CPs is Rs.110 crores. The effective yield of the CPs is 7.2% per annum. Proceeds from these CPs were used for repayment of other CPs that fell due for repayment in January 2018.
FY18 results were hit by the temporarily adverse effects of some of the Government of Indiaâs initiatives. First there was Real Estate (Regulation & Development) Act 2016, which brought into existence a Real Estate Regulatory and Development authority in each state. RERA was established to protect the interests of buyers as well as provide a way to resolve conflicts. Builders were expected to register their properties with RERA. Till the builders were able to do so, they were unable to advertise. As a result, radio suffered quite a lot. Then there was the GST which came into effect on July 1, 2017. While the long-term benefits of GST are well known, in the short run GST created significant disruption in the media markets. Distributors of consumer products destocked in the months leading up to the GST launch. In the months after the launch, there was some confusion about the new tax system. GST was a complicated tax system requiring tax registration in each state of operation. Businesses were required to file multiple returns every month. Exporters who were not paying indirect taxes on inputs before GST, suddenly found themselves having to pay those taxes and thereafter claim refunds. Unfortunately, the refunds took time in coming. All of this led to a temporary slowdown in the economy and that affected adversely your Companyâs revenues and profits. Fortunately, most of these initial hiccups are now behind us.
During the year, your Company decided to reduce ad volumes in response to listener feedback that all radio players were playing too many ads. In FY18, we reduced our ad volumes by about 15% compared to the previous year. When we cut volumes, we requested our clients and agencies for a price increase. We partially succeeded in this. Our pricing for the year increased by 5.5%.
During the year, the Phase-3 stations launched earlier grew rapidly. Revenues of Phase-3 stations more than doubled. This was in line with our expectations. During the year, we focused on better programming and spending on marketing. We did research to track the performance of the new stations. We made corrections as required.
We adopted a strict ad volume cap of 10 minutes in all our new Phase-3 stations. This had multiple benefits. One, it improved the listenership experience and so, grew the reach and popularity of the channels. Second, it gave us a good selling story to go to our advertisers. Third, it helped us keep our prices high. Even though we got few ads in the beginning, the market accepted our pricing once they heard our product and saw the marketing support. Fourth, and most importantly, because we did not undercut our competitorsâ pricing, they were able to fend off a price cut. This helped stabilize and in fact, build the market.
Your Company also helped improve the business of Ishq FM, the three metro stations (New Delhi, Mumbai and Kolkata) that belong to TV Today Network Limited (âTVTNLâ). As you may know, your Company has an Advertising Sales Agreement with TVTNL for these three stations. The programming and marketing inputs provided by TVTNL, coupled with the sales push by your Company, led the business of these three stations to grow by a very impressive 168%.
During the year, we focused on improving the margins of our non-radio business. Over the year, the non-radio business has grown to nearly 30% of our total revenues. Because of our efforts, the gross margins improved from 19% to 24% in FY18. The improvement of the margin was because of tighter control on production costs of the events, as well as better revenue realization.
In March 2018, the Company entered into a non-binding memorandum of understanding with TVTNL, for the proposed acquisition of the radio business of TVTNL, comprising of three radio stations in New Delhi, Mumbai and Kolkata currently operated under the frequency 104.8FM and âISHQ 104.8FMâ brand name. In April 2018, once the 3-year lock-in period provided under Phase-3 policy was over, TVTNL made a joint application with the Company to the Ministry of Information & Broadcasting (MIB) for acquisition of the Radio Business of the aforesaid radio stations. The Company is awaiting the MIBâs response to the application.
As you may remember, your Company entered the UAE six years ago with a brand licensing agreement with the Abu Dhabi Media Corporation (ADMC). Since then, your Company has provided great programming content to them. In the initial years, we won the prestigious Masala Awards several years in a row - for the best Hindi radio station. However, given the listenership research methodology which favours older stations, we were unable to achieve listenership lead for long. Finally, in the Q4 2017 wave, Nielsen declared Radio Mirchi as the number 1 radio broadcaster in the whole of the UAE. Your brand is the leader across all languages including the local language, Arabic.
On the back of the success in the UAE, your Company has now entered Bahrain in March 2018 by entering into a strategic Brand and Content License Agreement with Adline Media FZ LLC. Adline Media is a multi-platform media organization and is in the business of media sales and management. As a part of the business arrangement, the Company has been providing advisory services to Adline Media for launch of a radio station in the Kingdom of the Bahrain.
At the end of FY18, your Company is poised to return to the path of growth.
There were no other 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 these financial statements relate and the date of this Report.
3. Transfer to reserves
The Company does not propose to transfer any amount to General Reserve out of the amount available for appropriations.
4. Dividend
Your Directors are pleased to recommend a dividend @ 10 % i.e. Rs.1.00 (Rupee one only) per equity share of Rs.10/- each for the financial year ended March 31, 2018, aggregating Rs.574.69 lakhs including dividend distribution tax of Rs.97.99 lakhs. The dividend payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM).
The dividend, if declared at the AGM, would be paid/ dispatched within thirty days from the date of declaration of dividend to those persons or their mandates:
- whose names appear as beneficial owners as at the end of the business hours on September 19, 2018 in the list of the Beneficial Owners to be obtained from the Depositories i.e. National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL], in respect of the shares held in electronic/ dematerialized mode; and
- whose names appear as Members in the Register of Members of the Company as on September 19, 2018 after giving effect to valid share transfers in physical forms lodged with the Company/ Registrar & Share Transfer Agents, in respect of the shares held in physical mode.
5. Deposits from public
The Company has not accepted any deposit from the public / members under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review. Consequently, there is no requirement of furnishing details related to deposit covered under Chapter V of the Companies Act, 2013.
6. Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 read with the applicable rules thereto, including any statutory modification(s) or reenactment thereof for the time being in force (âthe Actâ), Mr. Vineet Jain (DIN: 00003962) retires by rotation at the ensuing AGM and being eligible, offers himself for reappointment.
Ms. Punita Lal (DIN - 03412604), Independent & Non -executive Director, resigned from the Board of Directors of the Company with effect from November 15, 2017 due to personal commitments and other pre-occupations. The Board of Directors places on record their appreciation for the valuable contributions made by Ms. Punita Lal.
Based on the recommendation from the Nomination and Remuneration Committee, the Board of Directors appointed Ms. Sukanya Kripalu (DIN: 06994202) as an Additional Director (Independent Non- Executive Director) for a term of five consecutive years commencing from May 23, 2018 to May 22, 2023, not liable to retire by rotation, in terms of sections 149, 150, 152, 161 and other applicable provisions of the Companies Act, 2013 (âthe Actâ) (including any statutory modification(s) or re-enactment thereof for the time being in force), subject to the approval of the Members.
Securities and Exchange Board of India (âSEBIâ) has vide its Notification No. SEBI/LAD-NRO/ GN/2018/10 dated May 9, 2018 issued the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (âthe Amendment Regulationsâ) which brought amendments in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Listing Regulationsâ) to be effective from April 1, 2019, save as otherwise specifically provided for in the Amendment Regulations. The Amendment Regulations inserted Regulation 17(1 A) in the Listing regulations, to be effective from April 1, 2019. According to the Amendment Regulations, no listed company shall appoint or continue the directorship of a person as a non-executive director who has attained age of seventy five years unless a special resolution is passed to that effect.
Mr. Richard Saldanha will be above the age of seventy five years as on April 1, 2019. In order to comply with the above amendment, a special resolution is proposed in the ensuing AGM for Mr. Saldanha to continue to hold the office of the Independent NonExecutive Director of the Company.
The Board recommends the aforesaid reappointment, appointment and continuation as the Directors of the Company.
The Company has received the declarations from all the Independent Directors of the Company pursuant to the provisions of Section 149 and all other applicable provisions of the Act stating that they meet the criteria of independence as provided under the Act and the Listing Regulations and that they are not disqualified to become directors under the Act; and in the opinion of the Board of Directors, all the Independent Directors fulfill the criteria of independence as provided under the Act, rules made thereunder, read with the Listing Regulations and that they are independent of the management.
As stipulated under the Listing Regulations and Secretarial Standards, details in respect of the directors seeking appointment, re-appointment at the AGM, inter alia, age, qualifications, experience, details of remuneration last drawn by such person, relationship with other directors and Key Managerial Personnel of the Company, the number of Meetings of the Board attended during the year and other directorships, membership/ chairmanship of the committees of other Boards, shareholding, etc. are annexed to the Notice convening the AGM.
None of the Directors are related with each other or key managerial personnel (inter-se).
Details of the number of meetings of the Board of Directors and Committees and attendance at the meetings have been furnished in the Report on Corporate Governance.
Following persons are designated as the Key Managerial Personnel (KMP):
- Mr. Prashant Panday: Managing Director & CEO
- Mr. N. Subramanian: Group CFO
- Mr. Mehul Shah: SVP Compliance & Company Secretary
7. Board Evaluation
The Board of Directors is committed to continued improvement in its effectiveness. Accordingly, the Board participated in the annual formal evaluation of its performance. This was designed to ensure, amongst other things, that the Board, its Committees and each director continue to contribute effectively.
The Board and its Committees evaluations involved questionnaire-driven discussions that covered a number of key areas / evaluation criteria including the roles and responsibilities, size and composition of the Board and its Committees, dynamics of the Board and its Committees and the relationship between the Board and management. The results of the reviews were discussed with the relevant Committees and collectively by the Board as a whole. Feedback was also sought on the contributions of individual directors. Independent directors, at their Meeting led by the Chairman of the Nomination & Remuneration Committee, conducted the performance review of the Chairman, Non-Independent Directors and the Board as a whole in respect of the financial year under review.
Formal Annual Evaluation was made in compliance with all the applicable provisions of the Act and the Listing Regulations. During the Board Evaluation, it was observed that the Board of Directors, as a whole, is functioning as an integrated body helping the board discussion to be rich and value adding. The Board also noted that given the changing external environment, there is need for better allocation of time for business reviews, periodic refreshers for the Board on key strategic areas. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
8. Board Familiarization Program
At the time of appointment of a new director, through the induction process, he/ she is familiarized with the Company, directorâs roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Detailed presentations are made before the Board Members at the Board and its Committee meetings covering various areas including business strategy, branding, programming, financial performance and forecast, compliances/ regulatory updates, audit reports, risk assessment and mitigation, etc. The details of the familiarization program are available on the Companyâs website at: www.enil.co.in at web link: http://www.enil.co.in/policies-code-of-conduct. php
9. Policy on directorsâ appointment and remuneration
The Companyâs Policy on the Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matters as provided under Section 178 of the Act is titled as Nomination & Remuneration Policy, and is available on the Companyâs website at: www.enil.co.in at http:// www.enil.co.in/policies-code-of-conduct.php and also appended as Annexure A to this Report.
10. Audit Committee
The Audit Committee of the Company presently consists of the following Directors as on the date of this Report:
- Mr. N. Kumar - Chairman (Independent NonExecutive Director)
- Mr. Ravindra Kulkarni (Independent NonExecutive Director)
- Mr. Richard Saldanha (Independent NonExecutive Director)
The Internal Auditors of the Company report directly to the Audit Committee. All the recommendations of the Audit Committee were accepted by the Board of Directors. Brief description of terms of reference and other relevant details of the Audit Committee have been furnished in the Report on Corporate Governance.
11. Vigil Mechanism
The Company has a âWhistle Blower Policyâ / âVigil Mechanismâ in place. The objective of the Vigil Mechanism is to provide the employees, directors, customers, vendors, contractors and other stakeholders of /in the Company an impartial and fair avenue to raise concerns and seek their redressal, in line with the Companyâs commitment to the highest possible standards of ethical, moral and legal business conduct and fair dealings with all its stakeholders and constituents and its commitment to open communication channels. The Company is also committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization, for whistle blowing in good faith. The Board of Directors affirms and confirms that no personnel have been denied access to the Audit Committee. The Policy contains the provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/ Vigil Mechanism is available on the Companyâs website at: www.enil.co.in at http://www.enil.co.in/policies-code-of-conduct. php
12. CSR Committee
The constitution, composition, quorum requirements, terms of reference, role, powers, rights, obligations of âCorporate Social Responsibility Committee [CSR Committee]â are in conformity with the provisions of Section 135 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and all other applicable rules made under the Companies Act, 2013 (including any statutory modification(s) or re-enactment or amendments thereof).
The CSR Committee of the Company presently consists of the following Directors as on the date of this Report:
- Mr. Vineet Jain (Non- Executive Director)
- Mr. Ravindra Kulkarni (Independent NonExecutive Director)
- Mr. Prashant Panday (Managing Director & CEO)
During the financial year under review, the Committee met four times, i.e. on May 23, 2017, August 2, 2017, November 1, 2017 and February 5, 2018.
Brief description of terms of reference of the Committee inter alia includes:
- To formulate and recommend to the Board of Directors (Board), a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
- To approve CSR activities;
- To recommend to the Board the amount of expenditure to be incurred on the CSR activities;
- To monitor the CSR Policy of the Company from time to time;
- To institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the Company;
- To carry out any other functions as authorized by the Board of Directors from time to time or as enforced by statutory/ regulatory authorities.
CSR Policy development and implementation:
The CSR Policy is available on the Companyâs website at www.enil.co.in at http://www.enil.co.in/ policies-code-of-conduct.php
CSR Policy Statement and Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure B to this Report.
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently comprises of the following Directors as on the date of this Report:
- Mr. N. Kumar - Chairman (Independent NonExecutive Director)
- Mr. Ravindra Kulkarni (Independent NonExecutive Director)
- Mr. Richard Saldanha (Independent NonExecutive Director)
- Mr. Vineet Jain (Non- Executive Director)
Brief description of terms of reference and other relevant details of the Nomination and Remuneration Committee have been furnished in the Report on Corporate Governance.
14. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently comprises of the following Directors as on the date of this Report:
- Mr. Richard Saldanha - Chairman (Independent Non- Executive Director)
- Mr. Ravindra Kulkarni (Independent NonExecutive Director)
- Mr. Prashant Panday (Managing Director & CEO)
Brief description of terms of reference and other relevant details of the Stakeholders Relationship Committee have been furnished in the Report on Corporate Governance.
15. Audit Report
The Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
16. Auditors
At the fifteenth AGM held on August 12, 2014, the Members had approved the appointment of S. R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm Registration number - 101049W/ E300004) as the Statutory Auditors of the Company to hold the office from the conclusion of the fifteenth AGM till the conclusion of the sixth consecutive AGM commencing from the AGM wherein such appointment was made. As per the provisions of Section 139 of the Act, the Company shall place the matter relating to such appointment for ratification by members at every AGM. Accordingly, the appointment of S. R. Batliboi & Associates LLP, Chartered Accountants, as the statutory auditors of the Company is placed for ratification by the members of the Company. S. R. Batliboi & Associates LLP have furnished a certificate in terms of the Companies (Audit and Auditors) Rules, 2014 and confirmed their eligibility in terms of Section 141 and all other applicable provisions of the Act, read with the applicable rules thereto.
Other relevant information has been furnished at Item No. 5 of the Notice convening the AGM.
17. Secretarial Auditor and report
The Board of Directors had appointed M/s. Hemanshu Kapadia & Associates, Company Secretaries (C. P. No: 2285), to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is appended as Annexure C to this Report.
The Secretarial Audit Report dated May 7, 2018 contains one qualification for not appointing a woman director as per the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the Listing Regulations during the financial year under review. The Company wishes to place on record that a woman director (Ms. Punita Lal-DIN: 03412604) was on the Board since March 28, 2016. She resigned from the Board with effect from November 15, 2017. As per the provisions of Section 149 of the Companies Act, 2013 read with the applicable rules thereto, any intermittent vacancy of a woman director shall be filled up by the Board at the earliest but not later than the immediate next Board meeting or three months from the date of such vacancy whichever is later.
The Board of Directors had identified Ms. Sukanya Kripalu (DIN: 06994202) for her induction as the Independent Non- Executive Director on the Board of the Company and had completed all the regulatory procedures including applying to the Ministry of Information & Broadcasting (âMIBâ) for their approval/ no objection on February 13, 2018. The Company had thus completed all the regulatory formalities for induction of woman director before the due date.
Post approval received from the MIB and based on the recommendation from the Nomination and Remuneration Committee, the Board of Directors appointed Ms. Sukanya Kripalu as an Additional Director (Independent Non- Executive Director) for a term of five consecutive years commencing from May 23, 2018 to May 22, 2023, in terms of sections 149, 150, 152, 161 and other applicable provisions of the Companies Act, 2013 (âthe Actâ) (including any statutory modification(s) or re-enactment thereof for the time being in force), not liable to retire by rotation, subject to the approval of the Members.
18. Cost Auditor and report
The Board of Directors, on recommendation of the Audit Committee and pursuant to Section 148 and all other applicable provisions of the Act, read with the Companies (Audit and Auditors) Rules, 2014 and all other applicable rules made under the Act (including any statutory modification(s) or re-enactment thereof for the time being in force), has approved the appointment and remuneration of the Cost Auditors, M/s. R. Nanabhoy & Co., Cost Accountants (Firm registration number- 00010) to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2019. The aforesaid appointment of M/s. R. Nanabhoy & Co. is subject to the relevant notifications, orders, rules, circulars, etc. issued by the Ministry of Corporate Affairs and other regulatory authorities from time to time. The remuneration payable to M/s. R. Nanabhoy & Co. shall be Rs.4,75,000 (Rupees four lakhs seventy five thousand only) plus out of pocket expenses and applicable taxes for the aforesaid audit. The remuneration payable to the Cost Auditors is required to be ratified subsequently by the shareholders. Accordingly, consent of the members has been sought for passing the resolution as set out at Item No. 6 of the Notice convening the AGM for ratification of the remuneration payable to the Cost Auditors for the financial year ending on March 31, 2019.
Cost records are made and maintained in compliance with the provisions of Section 148 of the Companies Act, 2013. The Cost Audit Report for the financial year 2016-17 was filed on August 28, 2017. The Cost Audit Report for the financial year 2017-18 will be filed on/ before the due date.
19. Conservation of Energy, Technology absorption and Foreign exchange earnings and Outgo
The Company is in the business of Private FM Radio Broadcasting. Hence, most of the information required to be provided relating to the Conservation of energy and Technology absorption is not applicable.
However, the information, as applicable, is given hereunder:
i) Conservation of energy:
The operations of the Company are not energy intensive. Nevertheless, continuous efforts such as installation of energy efficient electronic devices, implementation of SOPs etc. aimed at reducing energy consumption are being made by the Company and its employees to reduce the wastage of scarce energy resources.
ii) Technology absorption:
- The efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution:
- Improved modular and power efficient Transmitters deployed at new frequencies and replaced at frequencies where the existing transmitters were beyond 15 years.
- Replaced Scheduling software and modified Sales software with fully integrated software solution on SAP to manage the sales to revenue cycle. This has improved sales and operational efficiency.
- We pioneered the synchronisation tool (ArcServe) in the Radio industry to help manage automatic networking of our smaller markets from the Hub for creative content.
- Imported technology (imported during last three years reckoned from the beginning of the financial year):
The Company has not imported any new technology in this financial year. Nevertheless, the Company has continued to use the latest equipment and software for its the business activities.
- The expenditure incurred on Research & Development (R & D):
The Company has not spent any amount towards research and development activities. The Company has been active in harnessing the latest technology available in the industry.
iii) Foreign exchange earnings and outgo:
The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.
20. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure D to this Report.
The Managing Director of the Company does not receive any remuneration or commission from the Companyâs holding or subsidiary company.
As per the provisions of Section 197 of the Act read with the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other relevant particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of the Annual Report. As per the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is made available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the AGM. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report is available on the Companyâs website at: www.enil.co.in
21. Extract of Annual Return
Extract of Annual Return of the Company as required under Section 92 of the Act is attached as Annexure Eto this Report in the Form MGT 9.
22. Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
- any equity shares with differential rights as to dividend, voting or otherwise;
- any shares to its employees under the Employees Stock Option Scheme;
- any sweat equity shares.
The equity shares of the Company are listed and admitted to dealings on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) since February 15, 2006. Annual Listing Fee has been paid to each exchange. As required under the Listing Regulations, the Company has executed the Uniform Listing Agreement with BSE and NSE.
23. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under review as stipulated under Regulation 34 of the Listing Regulations is set out in a separate section forming part of this Report.
The Company has adopted the Integrated Reporting on a voluntary basis. The information related to the Integrated Reporting forms part of the Management Discussion & Analysis and as a green initiative, Integrated Reporting has been hosted on the website of the Company (www.enil.co.in) at url: http://www.enil.co.in/ financiais-annuai-reports.php.
24. Business Responsibility Report
As per the Regulation 34 of the Listing Regulations, the Company has published a separate Business Responsibility Report (âBRRâ) for the financial year under review. BRR is in line with the key principles stated in the âNational Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businessâ framed by the Ministry of Corporate Affairs and is attached as Annexure F to this Report.
25. Corporate Governance
The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated under the Listing Regulations. A separate report on Corporate Governance is enclosed as a part of this Report along with the Certificate from the Practicing Company Secretary.
26. Secretarial Standards
The Company has complied with all the applicable secretarial standards issued by The Institute of Company Secretaries of India.
27. Directorsâ Responsibility Statement
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Directors hereby confirm that:
a) i n the preparation of the annual accounts for the financial year ended on March 31, 2018, the applicable accounting standards have been followed and that there are no material departures from the same;
b) t hey have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2018 and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively; and
f) t hey have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
28. Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company during the financial year under review with related parties were in the ordinary course of business and on an armâs length basis.
Bennett, Coleman & Company Limited (âBCCLâ) is the holding company and a related party under Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations. As on date, BCCL holds 33918400 equity shares in the Company (i.e. 71.15% of the paid up capital of the Company).
Pursuant to the provisions of Section 188 of the Act, read with the Companies (Meeting of Board and its Powers) Rules, 2014, related party transactions beyond the prescribed threshold limit require prior approval of the company by a resolution. However, if the proposed transactions with the related parties are at armâs length and in its ordinary course of business, the said approval of the company is not required. Further, in terms of Regulation 23 of the Listing Regulations, transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the company as per the last audited financial statements of the company.
In order to achieve efficiencies in Ad sales, business synergies, economics of scale and also to optimize costs, the Company and BCCL have entered into various contracts/ arrangements/ transactions relating to the transfer and / or availing of resources, services or obligations in the past and propose to continue with such contracts/ arrangements/ transactions in the future too.
In compliance with Regulation 23 of the Listing
Regulations, on January 23, 2017, the Company sought the approval from the Members of the Company by way of Postal Ballot for the contracts/ arrangements/ transactions entered into and/ or to be entered into with Bennett, Coleman & Company Limited (âBCCLâ), the holding company, relating to the transfer and / or availing of resources, services or obligations for the Financial Year 2016-2017 and subsequent financial years exceeding ten percent but not exceeding twenty five percent of the annual consolidated turnover of the Company, as per the last audited financial statements of the Company relevant for the respective financial years.
Details of the Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, entered during the year by the Company, as required under Section 134(3) (h) of the Act (in the Form AOC 2) is attached as Annexure Gto this Report.
The Companyâs Policy on Materiality of related party transactions and dealing with related party transactions is available on the Companyâs website at: www.enil.co.in at http://www.enil.co.in/poiicies-code-of-conduct.php
The related party transactions are entered into based on business exigencies such as synergy in operations, profitability, market share enhancement etc. and are intended to further the Companyâs interests. In accordance with the applicable accounting standards, transactions with related parties are furnished in the financial statements.
29. Dividend Distribution Policy
The Company has formulated a Dividend Distribution Policy as required under the Regulation 43A of the Listing Regulations. The said Policy is appended as Annexure H to this Report and also uploaded on the Companyâs website at www.enil. co.in.
30. Particulars of loans given, investment made, guarantees given and securities provided
The Company has not given any loans, guarantees or provided any securities under Section 186 of the Act. Particulars of investments made by the Company during the financial year 2017-18 are provided in the financial statements. Please refer to the Note no. 8 and 11 to the standalone financial statements for details of investments made by the Company.
31. Risk Management
The Board of Directors is entrusted with various key functions including framing, implementing and monitoring the risk management plan for the Company; ensuring the integrity of the Companyâs accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the laws and relevant standards.
The Board of Directors has adopted the Risk Management Policy coupled with the Enterprise Risk Management framework and also established related procedures to inform Board Members about the risk assessment and minimization procedures. Major risks are identified, adequately mitigated continuously and the same are reported to the Audit Committee and Board of Directors along with the action taken report. Risk Management Policy envisages assessment of strategic risks, operational risks, financial risks, regulatory risks, human resource risks, technological risks.
Risk Management Policy adopted by the Company involves identification and prioritization of risk events, categorization of risks into High, Medium and Low based on the business impact and likelihood of occurrence of risks and Risk Mitigation & Control.
Securities and Exchange Board of India (âSEBIâ) has vide its Notification No. SEBI/LAD-NRO/ GN/2018/10 dated May 9, 2018 issued the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (âthe Amendment Regulationsâ) which brought amendments in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Listing Regulationsâ) to be effective from April 1, 2019, save as otherwise specifically provided for in the Amendment Regulations. In line with the Regulation 21 as amended vide Amendment Regulations, Risk Management Committee has been constituted.
The Risk Management Committee of the Company presently comprises of the following members as on the date of this Report:
- Mr. Vineet Jain (Non- Executive Chairman)
- Mr. Prashant Panday (Managing Director & CEO)
- Mr. N. Subramanian (Group CFO)
The Audit Committee reviews adequacy and effectiveness of the Companyâs internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companyâs Risk Management policies, systems and procedures. Internal Audit for the financial year under review has been carried out by KPMG, the independent Internal Auditors. Internal Audit covers all the radio stations at pan India level and corporate office as per the annual audit plan approved by the Audit Committee. Internal Audit report is presented to the Audit Committee on regular basis and the Chairman of the Audit Committee briefs the Board of Directors about the same.
32. Internal Financial Controls
The Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The Company has in place adequate internal financial controls with reference to financial statements. The Companyâs internal control systems, including internal financial controls, are commensurate with the nature of its business and the size and complexity of its operations and same are adequate and operating effectively. These systems are periodically tested and no reportable material weakness in the design or operation was observed. The Audit Committee reviews adequacy and effectiveness of the Companyâs internal control system including internal financial controls.
33. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting standard, the audited Consolidated Financial Statements are provided and form part of the Annual Report.
34. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Companyâs wholly owned subsidiary since 2007. ABSL recorded a total income of Rs.61.80 lakhs during the financial year 2017-18. Profit after Tax stood at Rs.48.10 lakhs for the financial year under review.
As per Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of the Subsidiary Company is attached along with the financial statements in the prescribed Form AOC-1. The Company does not have any associate company or joint venture. There has been no change in the nature of the business of the subsidiary.
The Company shall make available the financial statements and the related detailed information of its subsidiary to any Member of the Company or its subsidiary who may be interested in obtaining the same at any point of time and same is also available on the website: www.enil.co.in. These documents will also be available for inspection during business hours at the Registered Office and Corporate Office of the Company. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Company.
The audited financial statements, including consolidated financial statements and all other relevant documents required to be attached thereto are available on the Companyâs website: www.enil. co.in
The Policy for determining material subsidiaries is available on the Companyâs website: www.enil.co.in at http://www. enil. co. in/policies-code-of-conduct. php
35. Significant or material order
During the financial year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Companyâs operations in future.
36. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the aforesaid Act, including constitution of the Internal Complaints Committee. During the financial year under review, one complaint pertaining to sexual harassment was reported to the Internal Complaints Committee of the Company. After detailed investigation and following due procedure under the applicable law, guidelines and regulations, the said complaint was appropriately dealt with during the financial year under review and appropriate action was taken.
37. Acknowledgements
Your Directors take this opportunity to convey their appreciation to all the members, listeners, advertisers, media agencies, dealers, suppliers, bankers, regulatory and government authorities and all other business associates for their continued support and confidence in the management of the Company. Your Directors are pleased to place on record their appreciation of the consistent contribution made by employees at all levels through their hard work, dedication, solidarity and co-operation and acknowledge that their efforts have enabled the Company to achieve new heights of success.
For and on behalf of the Board of Directors
sd/-
Vineet Jain
Chairman
Mumbai, May 23, 2018 (DIN: 00003962)
Registered Office:
Entertainment Network (India) Limited,
CIN: L92140MH1999PLC120516,
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg, Lower Parel (West),
Mumbai - 400 013.
Mar 31, 2017
Dear Members,
The Directors have pleasure in presenting the Eighteenth Annual Report together with the audited financial statements of Entertainment Network (India) Limited [âthe Companyâ/ âENILâ/ âRadio Mirchiâ] for the financial year ended March 31, 2017.
The financial statements for the year ended March 31, 2017 are the first the Company has prepared under Indian Accounting Standards (Ind AS). The financial statements for the year ended March 31, 2016 have been restated in accordance with Ind AS for comparative information.
The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP Reconciliations and descriptions of the effect of the transition have been summarized in Note 49 to the financial statements.
1. Financial Highlights
Rs. in lakhs
Standalone |
Consolidated |
|||
Financial Year 2016-17 |
Financial Year 2015-16 |
Financial Year 2016-17 |
Financial Year 2015-16 |
|
Total Income |
57,611.13 |
54,286.03 |
57,680.10 |
54,354.01 |
Profit before taxation |
7,831.22 |
15,662.03 |
7,896.17 |
15,727.66 |
Tax expense |
2,383.82 |
4,869.50 |
2,379.21 |
4875.41 |
Profit after taxation |
5,447.40 |
10,792.53 |
5,516.96 |
10,852.25 |
Other comprehensive income net of tax |
(48.76) |
20.13 |
(48.76) |
20.13 |
Total Comprehensive Income |
5,398.64 |
10,812.66 |
5,468.20 |
10,872.38 |
Profit brought forward |
57,022.53 |
46,783.62 |
57,225.19 |
46,926.56 |
Authorised Capital |
12,000.00 |
12,000.00 |
12,000.00 |
12,000.00 |
Equity (issued, subscribed & paid up share capital) |
4,767.04 |
4,767.04 |
4,767.04 |
4,767.04 |
Transfer to General Reserve |
Nil |
Nil |
Nil |
Nil |
Adjustments due to change in rates of Depreciation |
Nil |
Nil |
Nil |
Nil |
Proposed dividend (including dividend distribution tax) |
573.75 |
573.75 |
573.75 |
573.75 |
Surplus carried to Balance Sheet |
61,847.42 |
57,022.53 |
62,119.63 |
57,225.19 |
2. Financial Performance, Operations and state of the Companyâs affairs
Your Company took advantage of the Batch-1 auctions under Phase-3 policy and grew its business strongly during FY17. Total income of the Company increased from Rs.54,286.03 lakhs during the previous year to Rs.57,611.13 lakhs during the year under review. Profit after tax was Rs.5,447.40 lakhs.
On a consolidated basis, total income of the Company increased from Rs.54,354.01 lakhs during the previous year to Rs.57,680.10 lakhs during the year under review. Profit after tax was Rs.5,516.96 lakhs.
The financial performance is discussed in more detail in the Management Discussion and Analysis Report which forms part of the Annual Report.
The biggest event of FY17 was the Government of Indiaâs DeMonetization initiative. The immediate impact of the program on the media industry was negative, and the impact was felt in both Q3 and Q4 of FY17. Your Company also took a hit in both quarters. However, because of its multiproduct strategy (products other than core radio), your Company was able to avoid any de-growth in revenues in the months of November 2016 to March 2017. While core radio de-grew marginally, the other businesses including Activations, Concerts, TV properties, Multi-media solutions and Digital together provided growth during this period.
Your Company has been adding new products to its sales portfolio every few years. Concerts is one such product. While concerts as a business was launched in a small way a few years back, it got a big thrust in FY17, with the business reporting 100% growth. Your Company regards concerts as a major growth area for the future.
In September 2015, your Company had executed a Business Transfer Agreement (âBTAâ) with TV Today Network Limited (âTVTNâ) to purchase TVTNâs four radio stations in Amritsar, Jodhpur, Patiala and Shimla. Your Company has now been operating these stations for more than one full year. It is extremely heartening to note that the four stations have reported a strong growth in revenues in FY17, resulting in an EBITDA margin of 20%. In H2 of FY16 (the first half of our acquisition), we had reported an EBITDA loss of 44.7%. This successful assimilation of the acquired stations gives us confidence in our ability to pursue more acquisition targets in the future.
In August 2016, the Company entered into an Advertising Sales Agreement (ASA) with TVTN in relation to TVTNâs remaining three radio stations at New Delhi, Mumbai and Kolkata. Pursuant to the ASA, TVTN has agreed to appoint ENIL as an agent of TVTN with effect from September 1, 2016 to facilitate the sale of TVTNâs airtime to third-parties who wish to advertise using TVTNâs airtime.
The Company participated in the 2nd batch of Phase-3 auctions held between October 26, 2016 and December 14, 2016.
After this batch of auctions, the Company acquired licenses in 21 new cities. These are Bhavnagar, Jamnagar, Junagadh, Mehsana, Bharuch and Palanpur in Gujarat, Akola and Amravati in Maharashtra, Tiruchirapalli and Tirunelveli in Tamil Nadu, Rajahmundry in Andhra Pradesh, Warangal in Telengana, Durg/Bhilai and Raigarh in Chhatisgarh, Hubli/Dharwad and Mysuru in Karnataka, Ujjain in Madhya Pradesh, Jhansi in Uttar Pradesh, Asansol and Siliguri in West Bengal and the Union Territory of Puducherry. With these 21 cities, the core Mirchi brand will expand its footprint deeper into strategically important and fast growing cities and states. Its presence will increase from 43 to 64 cities in India. However, since your Company has decided to surrender the Goa license, the total number of cities will become 63.
The total value of bids made by ENIL is Rs.51.3 crores. These frequencies are expected to become operational towards the end of FY18.
The Scheme of Amalgamation and Arrangement (âSchemeâ) of Times Infotainment Media Limited [âTIMLâ], the holding company of the Company with Bennett, Coleman & Company Limited (âBCCLâ), the holding Company of TIML was filed under the Companies Act, 1956. The Scheme was approved by the Honâble Bombay High Court vide Order dated July 3, 2015 (âOrderâ). The Honâble Bombay High Courtâs approval was however subject to the approval of the Ministry of Information & Broadcasting, Government of India (âMIBâ).
The MIB, vide its letter dated April 25, 2016 (received by the Company on April 26, 2016), accorded its approval to the change in ownership pattern of the Company under the Scheme. Consequently, TIMLâs entire shareholding in the Company was transferred to BCCL, and BCCL is the sole promoter shareholder of the Company.
In January 2017; the Company issued Unsecured Commercial Papers (CPs). The amount raised through issuance of CPs was Rs.121.8 crores. The CPs have a tenor of 364 days and will mature in January 2018. The maturity value of CPs is Rs.130 crores. The effective yield of the CPs is 6.75% per annum. Proceeds from the CPs were used to finance the Companyâs business needs.
In March 2017; the Company fully repaid the Unsecured Commercial Papers (CPs) with maturity value of Rs.270 crores issued to BNP Paribas in March 2016.
There were no other 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 this financial statements relate and the date of this Report.
3. Transfer to reserves
The Company does not propose to transfer any amount to General Reserve out of the amount available for appropriations.
4. Dividend
Your Directors are pleased to recommend a dividend @10% i.e. Rs.1.00 (Rupee one only) per equity share of Rs.10/- each for the financial year ended March 31, 2017, aggregating Rs.573.75 lakhs including dividend distribution tax of Rs.97.05 lakhs. The dividend payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM).
The dividend, if declared at the AGM, would be paid/ dispatched within thirty days from the date of declaration of dividend to those persons or their mandates:
- whose names appear as beneficial owners as at the end of the business hours on August 23, 2017 in the list of the Beneficial owners to be obtained from the Depositories i.e. National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL], in respect of the shares held in electronic/ dematerialized mode; and
- whose names appear as Members in the Register of Members of the Company as on August 23, 2017 after giving effect to valid share transfers in physical forms lodged with the Company/ Registrar & Share Transfer Agents, in respect of the shares held in physical mode.
5. Deposits from public
The Company has not accepted any deposits from public and therefore the details relating the deposits covered under Chapter V of the Companies Act, 2013 are not required to be furnished.
6. Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 read with the applicable rules thereto, including any statutory modification(s) or reenactment thereof for the time being in force (âthe Actâ), Mr. Prashant Panday (DIN: 02747925) retires by rotation at the ensuing AGM and being eligible, offers himself for reappointment.
Mr. B. S. Nagesh (DIN: 00027595) resigned from the Board of Directors of the Company effective from the close of the business hours on November 8, 2016 due to personal commitments and other pre-occupations. The Board of Directors places on record their appreciation for the valuable contributions made by Mr. Nagesh.
The Company has received the declarations from all the Independent Directors of the Company pursuant to the provisions of Section 149 and all other applicable provisions of the Act stating that they meet the criteria of independence as provided under the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [âListing Regulationsâ] and that they are not disqualified to become directors under the Act; and in the opinion of the Board of Directors, all the Independent Directors fulfill the criteria of independence as provided under the Act, rules made thereunder, read with the Listing Regulations and that they are independent of the management.
Brief resume of the director proposed to be reappointed, relevant information including nature of his expertise in specific functional areas, qualifications, terms of appointment, details of remuneration, names of the companies in which he holds directorships and the memberships/ chairmanships of Committees of the Board, his shareholding in the Company, etc., as stipulated under the Listing Regulations and Secretarial Standards has been furnished separately in the Notice convening the AGM read with the Annexure thereto forming part of this Report.
None of the Directors are related with each other or key managerial personnel (inter-se).
Details of the number of meetings of the Board of Directors and Committees and attendance at the meetings have been furnished in the Report on Corporate Governance.
Following persons are designated as the Key Managerial Personnel (KMP):
- Mr. Prashant Panday: Managing Director & CEO
- Mr. N. Subramanian: Group CFO
- Mr. Mehul Shah: SVP Compliance & Company Secretary
7. Board Evaluation
The Board of Directors is committed to continued improvement in its effectiveness. Accordingly, the Board participated in the annual formal evaluation of its performance. This was designed to ensure, amongst other things, that the Board, its Committees and each director continue to contribute effectively.
The Board and its Committees evaluations involved questionnaire-driven discussions that covered a number of key areas / evaluation criteria including the roles and responsibilities, size and composition of the Board and its Committees, dynamics of the Board and its Committees and the relationship between the Board and management. The results of the reviews were discussed with the relevant Committees and collectively by the Board as a whole. Feedback was also sought on the contributions of individual directors. Independent directors, at their Meeting led by the Chairman of the Nomination & Remuneration Committee, conducted the performance review of the Chairman, Non-Independent Directors and the Board as a whole in respect of the financial year under review.
Formal Annual Evaluation was made in compliance with all the applicable provisions of the Act and the Listing Regulations. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
8. Board Familiarization Program
At the time of appointment of a new director, through the induction process, he/ she is familiarized with the Company, directorâs roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Detailed presentations are made before the Board Members at the Board and its Committee meetings covering various areas including business strategy, branding, programming, financial performance and forecast, compliances/ regulatory updates, audit reports, risk assessment and mitigation, etc. The details of the familiarization program are available on the Companyâs website at: www.enil.co.in at web link: http//www. enil. co. in/policies-code-of-conduct.php
9. Policy on directorsâ appointment and remuneration
The Companyâs Policy on the Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matters as provided under Section 178 of the Act is titled as Nomination & Remuneration Policy and appended as Annexure A to this Report.
10. Audit Committee
The Audit Committee of the Company presently comprises of the following Directors as on the date of this Report:
- Mr. N. Kumar - Chairman (Independent Non Executive Director)
- Mr. Ravindra Kulkarni (Independent Non Executive Director)
- Mr. Richard Saldanha (Independent Non Executive Director)
The Internal Auditors of the Company report directly to the Audit Committee. All the recommendations of the Audit Committee were accepted by the Board of Directors. Brief description of terms of reference and other relevant details of the Audit Committee have been furnished in the Report on Corporate Governance.
11. Vigil Mechanism
The Company has a âWhistle Blower Policyâ / âVigil Mechanismâ in place. The objective of the Vigil Mechanism is to provide the employees, directors, customers, vendors, contractors and other stakeholders of /in the Company an impartial and fair avenue to raise concerns and seek their redressal, in line with the Companyâs commitment to the highest possible standards of ethical, moral and legal business conduct and fair dealings with all its stakeholders and constituents and its commitment to open communication channels. The Company is also committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization, for whistle blowing in good faith. The Board of Directors affirms and confirms that no personnel has been denied access to the Audit Committee. The Policy contains the provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/ Vigil Mechanism is available on the Companyâs website at: www.enil.co.in at http://www. enil. co. in/policies-code-of-conduct.php
12. CSR Committee
The constitution, composition, quorum requirements, terms of reference, role, powers, rights, obligations of âCorporate Social Responsibility Committee [CSR Committee]â are in conformity with the provisions of Section 135 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and all other applicable rules made under the Companies Act, 2013 (including any statutory modification(s) or re-enactment or amendments thereof).
The CSR Committee of the Company presently comprises of the following Directors as on the date of this Report:
- Mr. Vineet Jain (Non- Executive Director)
- Mr. Ravindra Kulkarni (Independent Non Executive Director)
- Mr. Prashant Panday (Managing Director & CEO)
Mr. B. S. Nagesh - member of the Committee resigned effective from the close of the business hours on November 8, 2016.
During the financial year under review, the Committee met four times, i.e. on May 19, 2016; August 2, 2016; November 8, 2016 and February 13, 2017.
Brief description of terms of reference of the Committee inter alia includes:
- To formulate and recommend to the Board of Directors (Board), a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
- To approve CSR activities;
- To recommend to the Board the amount of expenditure to be incurred on the CSR activities;
- To monitor the CSR Policy of the Company from time to time;
- To institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the Company;
- To carry out any other functions as authorized by the Board of Directors from time to time or as enforced by statutory/regulatory authorities.
CSR Policy development and implementation:
The CSR Policy is available on the Companyâs website at www.enil.co.inhttp://www.enil.co.in/ policies-code-of-conduct.php
Annual report on CSR activities as required under the Companies (Corporate Social Responsibility
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently comprises of the following Directors as on the date of this Report:
- Mr. N. Kumar - Chairman (Independent Non Executive Director)
- Mr. Ravindra Kulkarni (Independent Non Executive Director)
- Mr. Richard Saldanha (Independent Non Executive Director)
- Mr. Vineet Jain (Non- Executive Director)
Brief description of terms of reference and other relevant details of the Nomination and Remuneration Committee have been furnished in the Report on Corporate Governance.
14. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently comprises of the following Directors as on the date of this Report:
- Mr. Richard Saldanha - Chairman (Independent Non- Executive Director)
- Mr. Ravindra Kulkarni (Independent Non Executive Director)
- Mr. Prashant Panday (Managing Director & CEO)
Brief description of terms of reference and other relevant details of the Stakeholders Relationship Committee have been furnished in the Report on Corporate Governance.
15. Audit Report
The Audit Report does not contain any qualification, reservation or adverse remark.
16. Auditors
At the fifteenth AGM held on August 12, 2014, the Members had approved the appointment of S. R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm Registration number - 101049W/ E300004) as the statutory auditors of the Company to hold the office from the conclusion of the fifteenth AGM till the conclusion of the sixth consecutive AGM commencing from the AGM wherein such appointment was made. As per the provisions of Section 139 of the Act, the Company shall place the matter relating to such appointment for ratification by members at every AGM. Accordingly, the appointment of S. R. Batliboi & Associates LLP, Chartered Accountants, as the statutory auditors of the Company is placed for ratification by the members of the Company.
S. R. Batliboi & Associates LLP have furnished a certificate in terms of the Companies (Audit and Auditors) Rules, 2014 and confirmed their eligibility in terms of Section 141 and all other applicable provisions of the Act, read with the applicable rules thereto.
Other relevant information has been furnished at Item No. 5 of the Notice convening the AGM.
17. Secretarial Auditor and report
The Board of Directors had appointed M/s. Hemanshu Kapadia & Associates, Company Secretaries (C. P. No: 2285), to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is appended as Annexure C to this Report.
The Secretarial Audit Report dated May 4, 2017 does not contain any qualification or adverse remark or observation.
18. Cost Auditor and report
The Board of Directors, on recommendation of the Audit Committee and pursuant to Section 148 and all other applicable provisions of the Act, read with the Companies (Audit and Auditors) Rules, 2014 and all other applicable rules made under the Act (including any statutory modification(s) or re-enactment thereof for the time being in force), has approved the appointment and remuneration of the Cost Auditors, M/s. R. Nanabhoy & Co., Cost Accountants (Firm registration number-00010) to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2018. The aforesaid appointment of M/s. R. Nanabhoy & Co. is subject to the relevant notifications, orders, rules, circulars, etc. issued by the Ministry of Corporate Affairs and other regulatory authorities from time to time. The remuneration payable to M/s. R. Nanabhoy & Co. shall be Rs.4,50,000 (Rupees four lakhs fifty thousand only) plus out of pocket expenses and applicable taxes for the aforesaid audit. The remuneration payable to the Cost Auditors is required to be ratified subsequently by the shareholders. Accordingly, consent of the members has been sought for passing the resolution as set out at Item No. 6 of the Notice convening the AGM for ratification of the remuneration payable to the Cost Auditors for the financial year ending on March 31, 2018.
The Cost Audit Report for the financial year 201516 was filed on August 29, 2016. The Cost Audit Report for the financial year 2016-17 will be filed on/ before the due date.
19. Conservation of energy, Technology absorption and Foreign exchange earnings and Outgo
The Company is in the business of Private FM Radio Broadcasting. Hence, most of the information required to be provided relating to the Conservation of energy and Technology absorption is not applicable.
However the information, as applicable, is given hereunder:
i) Conservation of energy:
The operations of the Company are not energy intensive. Nevertheless, continuous efforts such as installation of energy efficient electronic devices, implementation of SOPs etc. aimed at reducing energy consumption are being made by the Company and its employees to reduce the wastage of scarce energy resources.
ii) Technology absorption:
- The efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution:
- A lot of new features were added to the Customer Relationship Management (CRM) solution to improve sales efficiency and bring in greater control.
- ENIL has adopted efficient use of software and networking facilities to re-use content efficiently and ensure good return on investments.
- Imported technology (imported during last three years reckoned from the beginning of the financial year): Nil
- The expenditure incurred on Research & Development (R & D): Foray in the Digital Space:
Mirchi continues to grow its online radio reach. We now stream 19 online radio stations in partnership with Gaana and the listenership across our online stations has grown to over 3 million listeners a month. We added 5 new stations this year - Mirchi Top 20, International Hitz, Rabindra Sangeet, Mirchi Mehfil and Campus Radio. One key development for the online radio streaming business has been the launch of a radio station sponsored by a Brand - Campus Radio. This sponsorship model offers a better monetization opportunity than a traditional audio/ banner advertisement model.
Radio Mirchiâs digital presence extends beyond online radio to social media and website, and it has the biggest digital footprint compared to all other competitors. We streamed almost 200 million video views on our YouTube channels in FY2017. Radio Mirchi has the biggest social media presence with a fan base of over 4.3 million across Facebook, and 3.3 lakhs across Twitter. The website continues to be the #1 radio website in India.
Our digital innovations got a lot of recognition this year - we won a Gold and Silver at the DIGIXX digital awards for innovation in digital marketing and user interface design; and Campus Radio got shortlisted at Abby Awards for marketing innovation.
20. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure D to this Report.
The Managing Director of the Company does not receive any remuneration or commission from the Companyâs holding or subsidiary company.
As per the provisions of Section 197 of the Act read with the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other relevant particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of the Annual Report. As per the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is made available for inspection at the Registered Office and Corporate Office of the Company during working hours for a period of 21 days before the date of AGM. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report is available on the Companyâs website at: www.enil.co.in
21. Extract of Annual Return
Extract of Annual Return of the Company as required under Section 92 of the Act is attached as Annexure Eto this Report in the Form MGT 9.
22. Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
- any equity shares with differential rights as to dividend, voting or otherwise;
- any shares to its employees under the Employees Stock Option Scheme;
- any Sweat Equity Shares.
The equity shares of the Company are listed and admitted to dealings on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) since February 15, 2006. Annual Listing Fee has been paid to each exchange. As required under the Listing Regulations, the Company has executed the Uniform Listing Agreement with BSE and NSE.
23. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under review as stipulated under Regulation 34 of the Listing Regulations is set out in a separate section forming part of this Report.
24. Business Responsibility Report
As per the amendment in the Regulation 34 of the Listing Regulations notified on December 22, 2015, mandatory reporting of Business Responsibility Report in the Annual Report is now applicable to the top five hundred listed entities based on market capitalization (earlier the mandatory reporting applied only to the top hundred listed entities based on market capitalization). Accordingly, the Company has published a separate Business Responsibility Report (âBRRâ) for the financial year under review as stipulated under Regulation 34 of the Listing Regulations. BRR is in line with the key principles stated in the âNational Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businessâ framed by the Ministry of Corporate Affairs and is attached as Annexure F to this Report.
25. Corporate Governance
The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated under the Listing Regulations. A separate report on Corporate Governance is enclosed as a part of this Report along with the Certificate from the Practicing Company Secretary.
26. Directorsâ Responsibility Statement
Pursuant to the provisions of Section 134 of the Act, the Directors hereby confirm that:
a) in the preparation of the annual accounts for the financial year ended on March 31, 2017, the applicable accounting standards have been followed and that there are no material departures from the same;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2017 and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
27. Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company during the financial year under review with related parties were in the ordinary course of business and on an armâs length basis.
Bennett, Coleman & Company Limited (âBCCLâ) is the holding company and a related party under Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations. As on date, BCCL holds 33918400 equity shares in the Company (i.e. 71.15% of the paid up capital of the Company).
Pursuant to the provisions of Section 188 of the Act, read with the Companies (Meeting of Board and its Powers) Rules, 2014, related party transactions beyond the prescribed threshold limit require prior approval of the company by a resolution. However, if the proposed transactions with the related parties are at armâs length and in its ordinary course of business, the said approval of the company is not required. Further, in terms of Regulation 23 of the Listing Regulations, transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the company as per the last audited financial statements of the company.
In order to achieve efficiencies in Ad sales, business synergies, economics of scale and also to optimize costs, the Company and BCCL have entered into various contracts/ arrangements/ transactions relating to the transfer and / or availing of resources, services or obligations in the past and propose to continue with such contracts/ arrangements/ transactions in the future too.
In compliance with Regulation 23 of the Listing Regulations, during the financial year under review, the Company sought the approval from the Members of the Company by way of Postal Ballot for the contracts/ arrangements/ transactions entered into and/ or to be entered into with Bennett, Coleman & Company Limited (âBCCLâ), the holding company, relating to the transfer and / or availing of resources, services or obligations for the Financial Year 2016-2017 and subsequent financial years exceeding ten percent but not exceeding twenty five percent of the annual consolidated turnover of the Company, as per the last audited financial statements of the Company relevant for the respective financial years.
Details of the Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, entered during the year by the Company, as required under Section 134(3) (h) of the Act (in the Form AOC 2) is attached as Annexure Gto this Report.
The Companyâs Policy on Materiality of related party transactions and dealing with related party transactions is available on the Companyâs website at: www.enil.coi at http://www.enil.co.in/poiicies-code-of-conduct.php
The related party transactions are entered into based on business exigencies such as synergy in operations, profitability, market share enhancement etc. and are intended to further the Companyâs interests. In accordance with the applicable accounting standards, transactions with related parties are furnished in the financial statements.
28. Dividend Distribution Policy
The Company has formulated a Dividend Distribution Policy as required under the Regulation 43A of the Listing Regulations. The said Policy is appended as Annexure H to this Report and also uploaded on the Companyâs website at www.enil.co.in.
29. Particulars of loans given, investment made, guarantees given and securities provided
The Company has not given any loans, guarantees or provided any securities under Section 186 of the Act. Particulars of investments made by the Company during the financial year 2016-17 are provided in the financial statements. Please refer to the Note no. 7 and 11 to the standalone financial statements for details of investments made by the Company.
30. Risk Management
The Board of Directors is entrusted with various key functions including framing, implementing and monitoring the risk management plan for the Company; ensuring the integrity of the Companyâs accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the laws and relevant standards.
The Board of Directors has adopted the Risk Management Policy coupled with the Enterprise Risk Management framework and also established related procedures to inform Board Members about the risk assessment and minimization procedures. Major risks are identified, adequately mitigated continuously and the same are reported to the Audit Committee and Board of Directors along with the action taken report. Risk Management Policy envisages assessment of strategic risks, operational risks, financial risks, regulatory risks, human resource risks, technological risks.
Risk Management Policy adopted by the Company involves identification and prioritization of risk events, categorization of risks into High, Medium and Low based on the business impact and likelihood of occurrence of risks and Risk Mitigation & Control.
The Audit Committee reviews adequacy and effectiveness of the Companyâs internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companyâs Risk Management policies, systems and procedures. Internal Audit is carried out by KPMG - the independent Internal Auditors. Internal Audit covers all the radio stations at pan India level and corporate office as per the annual audit plan approved by the Audit Committee. Internal Audit report is presented to the Audit Committee on regular basis and the Chairman of the Audit Committee briefs the Board of Directors about the same.
31. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to financial statements. The Companyâs internal control systems, including internal financial controls, are commensurate with the nature of its business and the size and complexity of its operations and same are adequate and operating effectively. These systems are periodically tested and no reportable material weakness in the design or operation was observed. The Audit Committee reviews adequacy and effectiveness of the Companyâs internal control system including internal financial controls.
32. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting standard, the audited Consolidated Financial Statements are provided and form part of the Annual Report.
33. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Companyâs wholly owned subsidiary since 2007. ABSL recorded a total income of Rs.68.98 lakhs during the financial year 2016-17. Profit after Tax stood at Rs.69.55 lakhs for the financial year under review.
As per Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of the Subsidiary Company are attached along with the financial statements in the prescribed Form AOC-1. The Company does not have any associate company or joint venture. There has been no change in the nature of the business of the subsidiary.
The Company shall make available the financial statements and the related detailed information of its subsidiary to any Member of the Company or its subsidiary who may be interested in obtaining the same at any point of time and same is also available on the website: www.enH.co.in. These documents will also be available for inspection during business hours at the Registered Office and Corporate Office of the Company. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Company.
The audited financial statements, including consolidated financial statements and all other relevant documents required to be attached thereto are available on the Companyâs website: www.enil.co.in
The Policy for determining material subsidiaries is available on the Companyâs website: www.enil.coi at http://www.enH.co.in/policies-code-of-conduct.php
34. Significant or material order
During the financial year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Companyâs operations in future.
35. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. During the financial year under review, no complaint pertaining to sexual harassment was reported to the Internal Complaints Committee of the Company.
36. Acknowledgments
Your Directors take this opportunity to convey their appreciation to all the members, listeners, advertisers, media agencies, dealers, suppliers, bankers, regulatory and government authorities and all other business associates for their continued support and confidence in the management of the Company. Your Directors are pleased to place on record their appreciation of the consistent contribution made by employees at all levels through their hard work, dedication, solidarity and co-operation and acknowledge that their efforts have enabled the Company to achieve new heights of success.
For and on behalf of the Board of Directors
sd/-
Vineet Jain
Chairman
(DIN: 00003962)
Pune, May 23, 2017
Registered Office:
Entertainment Network (India) Limited,
CIN: L92140MH1999PLC120516,
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg, Lower Parel (West),
Mumbai - 400 013.
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting the Seventeenth Annual
Report together with the audited financial statements of Entertainment
Network (India) Limited [''the Company''/ ''ENIL7 ''Radio Mirchi''] for the
financial year ended March 31, 2016.
1 Financial Highlights
Amount in Rs.
Standalone Consolidated
Financial
Year Financial
Year Financial
Year Financial
Year
2015-16 2014-15 2015-16 2014-15
Total Income 5,337,176,003 4,706,548,014 5,337,314,234 4,707,588,061
Profit before
taxation 1,481,637,875 1,446,093,211 1,481,550,729 1,446,144,866
Tax expense 481,626,202 386,372,615 481,664,185 386,374,869
Profit after
taxation 1,000,011,273 1,059,720,596 999,886,544 1,059,769,997
Profit brought
forward 4,383,854,432 3,439,832,942 4,384,869,145 3,440,798,255
Authorised
Capital 1,200,000,000 1,200,000,000 1,200,000,000 1,200,000,000
Equity
(issued,
subscribed &
paid up 476,704,150 476,704,150 476,704,150 476,704,150
share capital)
Transfer to
General
Reserve Nil Nil Nil Nil
Adjustments
due to change
in rates of Nil 58,324,116 Nil 58,324,117
Depreciation
Proposed
dividend
(including
dividend 57,374,990 57,374,990 57,374,990 57,374,990
distribution
tax)
Surplus
carried to
Balance Sheet 5,326,490,715 4,383,854,432 5,327,380,699 4,384,869,145
2 Financial Performance, Operations and state of the Company''s affairs
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased from
Rs.4,706,548,014 during the previous year to Rs.5,337,176,003 during
the year under review. Profit after tax was Rs.1,000,011,273.
On a consolidated basis, total income of the Company increased from
Rs.4,707,588,061 during the previous year toRs.5,337,314,234 during the
year under review. Profit after tax was Rs.999,886,544.
The financial performance is discussed in detail in the Management
Discussion and Analysis Report which forms part of the Annual Report.
In July, 2015, the Company had received the approval from the Ministry
of Information & Broadcasting (MIB) to purchase TVTN''s four radio
stations i.e. radio business in Amritsar, Jodhpur, Patiala and Shimla.
The said purchase was subject to fulfillment of conditions specified by
the MIB, execution of relevant documents with TVTN and completion of
all other relevant formalities.
In September, 2015, the Company had executed a Business Transfer
Agreement (''BTA) with TVTN to purchase the aforementioned radio
business on the terms and conditions stipulated in the BTA. The
purchase consideration was Rupees Four Crores subject to closing net
working capital adjustments as defined more specifically in the BTA and
also payment of migration fees to MIB for migration of the aforesaid
four stations from Phase II to Phase III.
The Company participated in the 1st batch of Phase - 3 auctions and has
expanded its network substantially.
In the bidding, the Company focused on building a strong "2nd
frequency" network in the biggest Al- and A category towns. EN IL has
won a 2nd frequency in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur,
Lucknow, Jaipur, Nagpur and Surat. In addition to acquiring a second
channel in the major cities, the Company also bid and won important
cities that the Company was not already present in. These are
Chandigarh (and along with Amritsar and Patiala acquired from TV Today,
this has made the Company''s North footprint strong), Guwahati
(the gate-way to the North East), ShiLLong (a buzzing border town),
Kochi and Kozhikode (which, along with the Company''s existing
Trivandrum, are the three biggest cities in Kerala) and Jammu and
Srinagar (important border towns). With these seven cities, the core
Mirchi brand will now be available in 43 cities (32 from Phase-2 4
acquired from TV Today these 7).
The Company commenced broadcast from its radio stations at Guwahati,
Kochi and Bengaluru (acquired under Phase 3 auctions) as on the date of
this report.
In March 2016, the Company issued Unsecured Commercial Papers (CPs) to
BNP Paribas. The amount raised through issuance of CPs was Rs.249.43
crores. The CPs have a tenor of one year and will mature on March 17,
2017. The maturity value of CPs is Rs.270 crores. The effective yield
of the CPs is 8.25% per annum. The proceeds from the CPs were used to
fully repay the outstanding bank loans.
The Scheme of Amalgamation and Arrangement (''Scheme'') of Times
Infotainment Media Limited [TIML], the holding company of the Company
with Bennett, Coleman & Company Limited (''BCCL), the holding Company of
TIML was filed under the Companies Act, 1956. The Scheme was approved
by the Hon''ble Bombay High Court vide Order dated July 3, 2015
(''Order''). The Hon''ble Bombay High Court''s approval was however subject
to the approval of the Ministry of Information & Broadcasting,
Government of India (''MIB'').
The MIB, vide its letter dated April 25,2016 (received by the Company
on April 26, 2016), accorded its approval to the change in ownership
pattern of the Company under the Scheme. Consequently, TIML''s entire
shareholding in the Company transferred to BCCL, and BCCL is the sole
promoter shareholder of the Company.
There were no other 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 this financial statements
relate and the date of this Report.
3 Dividend
Your Directors are pleased to recommend a dividend of ?1.00 (Rupee one
only) per equity share of Rs.10/- each for the financial year ended
March 31, 2016, aggregating Rs.573.75 lacs including dividend
distribution tax of Rs.97.05 lacs. The dividend payment is subject to
the approval of the shareholders at the ensuing Annual General Meeting
(AGM).
The dividend, if declared at the AGM, would be paid/ dispatched within
thirty days from the date of declaration of dividend to those persons
or their mandates:
- whose names appear as beneficial owners as at the end of the business
hours on July 27, 2016 in the list of the Beneficial Owners to be
obtained from the Depositories i.e. National Securities Depository
Limited [NSDL] and Central Depository Services (India) Limited [CDSL],
in respect of the shares held in electronic/ dematerialized mode; and
- whose names appear as Members in the Register of Members of the
Company as on July 27, 2016, after giving effect to valid share
transfers in physical forms lodged with the Company/ Registrar & Share
Transfer Agents, in respect of the shares held in physical mode.
4 Deposits from public
The Company has not accepted any deposits from public and therefore the
details relating the deposits covered underChapterVof the Companies
Act, 2013 are not required to be furnished.
5 Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 read with
the applicable rules thereto, including any statutory modification(s)
or re- enactment thereof for the time being in force (''the Act''), Mr.
Vineet Jain (DIN: 00003962) retires by rotation at the ensuing AGM and
being eligible, offers himself for reappointment.
The Members of the Company have approved the appointment of Ms. Punita
Lai (DIN: 03412604) as the Independent Non-executive Director of the
Company through postal ballot voting process. Her appointment as the
Independent Non-executive Director is for a term of five consecutive
years commencing from March 28, 2016.
On the basis of the approval and recommendation of the Nomination &
Remuneration Committee, the Board of Directors of the Company, on May
19, 2016, unanimously approved the reappointment of Mr. Prashant Panday
(DIN: 02747925) as the Managing Director & Chief Executive Officer (''MD
& CEO'') pursuant to the provisions of sections 152, 196, 197, 203 read
with Schedule V and all other applicable provisions of the Companies
Act, 2013 and all applicable rules made under the Companies Act, 2013
(including any statutory modification(s) or re-enactment thereof from
time to time) (hereinafter referred to as ''the Act''), for a period of 5
(five) years commencing from July 1, 2016 and ending on June 30, 2021.
The aforesaid reappointment is on a continuation basis, without any
interruption/ break in the service and is subject to the approvals,
consents, permissions, sanctions and the like of the Members of the
Company and all other concerned statutory and other authorities, if and
to the extent applicable and required. His term of office shall be
liable to retire by rotation. Terms, conditions of his reappointment
including remuneration and all other relevant details have been
furnished in the Notice convening this AGM.
The Company has received the declarations from all the Independent
Directors of the Company pursuant to the provisions of Section 149 and
all other applicable provisions of the Act stating that they meet the
criteria of independence as provided under the Act and the Securities
and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 [''Listing Regulations''] and that they
are not disqualified to become directors under the Act; and in the
opinion of the Board of Directors, all the Independent Directors
fulfill the criteria of independence as provided under the Act, rules
made thereunder, read with the Listing Regulations and that they are
independent of the management.
Brief resume of the directors proposed to be reappointed, relevant
information including nature of their expertise in specific functional
areas, qualifications, terms of appointment, details of remuneration,
names of the companies in which they hold directorships and the
memberships/ chairmanships of Committees of the Board, their
shareholding in the Company, etc., as stipulated under the Listing
Regulations and Secretarial Standards have been furnished separately in
the Notice convening the AGM read with the Annexure thereto forming
part of this Report.
None of the Directors are related with each other or key managerial
personnel [inter-se).
Details of the number of meetings of the Board of Directors and
Committees and attendance at the meetings have been furnished in the
Report on Corporate Governance.
Following persons are designated as Key Managerial Personnel (KMP):
- Mr. Prashant Panday: Managing Director & CEO
- Mr. N. Subramanian: Group CFO
- Mr. Mehul Shah: SVP Compliance & Company Secretary
6 Board Evaluation
The Board of Directors is committed to continued improvement in its
effectiveness. Accordingly, the Board participated in the annual formal
evaluation of its performance. This was designed to ensure, amongst
other things, that the Board, its Committees and each director continue
to contribute effectively.
The Board and its Committees evaluations involved questionnaire-driven
discussions that covered a number of key areas / evaluation criteria
inter alia the roles and responsibilities, size and composition of the
Board and its Committees, dynamics of the Board and its Committees and
the relationship between the Board and management. The results of the
reviews were discussed with the relevant Committees and collectively by
the Board as a whole. Feedback was also sought on the contributions of
individual directors. Independent directors, at their Meeting led by
the Chairman of the Nomination & Remuneration Committee, conducted the
performance review of the Chairman, Non-independent Directors and the
Board as a whole in respect of the financial year under review.
Formal Annual Evaluation was made in compliance with all the applicable
provisions of the Act and the Listing Regulations. The Directors were
satisfied with the evaluation results, which reflected the overall
engagement of the Board and its Committees with the Company.
7 Board Familiarization Program
At the time of appointment of new director, through the induction
process, he/ she is familiarized with the Company, director''s roles,
rights, responsibilities in the Company, nature of the industry in
which the Company operates, business model of the Company, etc.
Detailed presentations are made before the Board Members at the Board
and its Committee meetings covering various areas including business
strategy, branding, programming, financial performance and forecast,
compliances/ regulatory updates, audit reports, risk assessment and
mitigation, etc. The details of the familiarization program are
available on the Company''s website at: www.enil.co.in at web link:
http://www.enil.co.in/policies-code-of-conduct.php
8 Policy on directors'' appointment and remuneration
The Company''s Policy on the Directors'' appointment and remuneration
including criteria for determining qualifications, positive attributes,
independence of director and other matters as provided under Section
178 of the Act is annexed to this Report at the Nomination &
Remuneration Policy and appended as Annexure A to this Report.
9 Audit Committee
The Audit Committee of the Company presently comprises of Mr. N. Kumar
(Chairman), Mr. Ravindra Kulkarni, Mr. Richard Saldanha and Mr. B. S.
Nagesh. The Internal Auditors of the Company report directly to the
Audit Committee. All the recommendations of the Audit Committee were
accepted by the Board of Directors. Brief description of terms of
reference and other relevant details of the Audit Committee have been
furnished in the Report on Corporate Governance.
10 Vigil Mechanism
The Company has a ''Whistle Blower Policy'' / ''Vigil Mechanism'' in place.
The objective of the Vigil Mechanism is to provide the employees,
directors, customers, vendors, contractors and other stakeholders of
/in the Company an impartial and fair avenue to raise concerns and seek
their redressal, in line with the Company''s commitment to the highest
possible standards of ethical, moral and legal business conduct and
fair deal to all its stakeholders and constituents and its commitment
to open communication channels. The Company is also committed to
provide requisite safeguards for the protection of the persons who
raise such concerns from reprisals or victimization, for whistle blowing
in good faith. The Board of Directors affirms and confirms that no
personnel has been denied access to the Audit Committee. The Policy
contains the provision for direct access to the chairperson of the
Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/Vigil Mechanism is available on the Company''s
website at: www.enil.co.in at
http://www.enil.co.in/policies-code-of-conduct.php
11 CSR Committee
The constitution, composition, quorum requirements, terms of reference,
role, powers, rights, obligations of ''Corporate Social Responsibility
Committee [CSR Committee]'' are in conformity with the provisions of
Section 135 and all other applicable provisions of the Companies Act,
2013, read with the Companies (Corporate Social Responsibility Policy)
Rules, 2014 and all other applicable rules made under the Companies
Act, 2013 (including any statutory modification(s) or re-enactment or
amendments thereof).
The Committee comprises of the following Directors as on the date of
this Report:
- Mr. Vineet Jain (Non- Executive Director)
- Mr. B. S. Nagesh (Independent Non- Executive Director)
- Mr. Ravindra Kulkarni (Independent Non- Executive Director)
- Mr. Prashant Panday (Managing Director & CEO)
During the financial year under review, the Committee met four times,
i.e. on May 19, 2015; August A, 2015; October 26, 2015; and February 8,
2016.
Brief description of terms of reference of the Committee inter alia
includes to:
- formulate and recommend to the Board of Directors (Board), a
Corporate Social Responsibility (CSR) Policy which shall indicate the
activities to be undertaken by the Company as specified in Schedule VII
of the Companies Act, 2013
- approve CSR activities
- recommend to the Board the amount of expenditure to be incurred on
the CSR activities
- monitor the CSR Policy of the Company from time to time
- institute a transparent monitoring mechanism for implementation of
the CSR projects or programs or activities undertaken by the Company
- carry out any other functions as authorized by the Board of Directors
from time to time or as enforced by statutory/ regulatory authorities
CSR Policy development and implementation:
The CSR Policy is available on the Company''s website at www.enil.co.in
http://www.enil.co.in/ policies-code-of-conduct.php
Annual report on CSR activities as required under the Companies
(Corporate Social Responsibility Policy) Rules, 2014 has been appended
as Annexure B to this Report.
12 Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently
comprises of Mr. N. Kumar (Chairman), Mr. Ravindra Kulkarni, Mr.
Richard Saldanha and Mr. Vineet Jain. Brief description of terms of
reference and other relevant details of the Nomination and Remuneration
Committee have been furnished in the Report on Corporate Governance.
13 Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently
comprises of Mr. Richard Saldanha (Chairman), Mr. Ravindra Kulkarni and
Mr. Prashant Panday. Brief description of terms of reference and other
relevant details of the Stakeholders Relationship Committee have been
furnished in the Report on Corporate Governance.
14 Audit Report
The Audit Report does not contain any qualification, reservation or
adverse remark.
15 Auditors
At the 15th AGM held on August 12, 20U, the Members had approved the
appointment of S. R. Batliboi & Associates LLP, Chartered Accountants
(ICAI Firm Registration number - 101049W/ E300004) as the statutory
auditors of the Company to hold the office from the conclusion of the
15th AGM till the conclusion of the sixth consecutive AGM (with the
meeting wherein such appointment has been made being counted as the
first meeting). As per the provisions of Section 139 of the Act, the
Company shall place the matter relating to such appointment for
ratification by members at every AGM. Accordingly, the appointment of
S. R. Batliboi & Associates LLP, Chartered Accountants, as the
statutory auditors of the Company is placed for ratification by the
members of the Company.
S. R. Batliboi & Associates LLP have furnished a certificate in terms
of the Companies (Audit and Auditors) Rules, 2014and confirmed their
eligibility in terms of Section 141 and all other applicable provisions
of the Act, read with the applicable rules thereto.
Other relevant information has been furnished at Item No. 5 of the
Notice convening the AGM.
16 Secretarial Auditor and report
The Board of Directors had appointed M/s. Hemanshu Kapadia &
Associates, Company Secretaries (C. P. No: 2285), to conduct
Secretarial Audit for the financial year 2015-16. The Secretarial Audit
Report for the financial year ended March 31, 2016 is appended as
Annexure C to this Report.
The Secretarial Audit Report dated May 19, 2016 contains one
qualification for not appointing a woman director as per the provisions
of Section 149 of the Companies Act, 2013 during the financial year
under review. The Company wishes to place on record that a woman
director (Ms. Vibha Paul Rishi) was on the Board since August 2012. As
per the relevant regulatory policy applicable to the Company, she
resigned from the Board effective from March 5, 2015. As per the
provisions of section 149 of the Companies Act, 2013 read with the
applicable rules thereto, any intermittent vacancy of a woman director
shall be filled- up by the Board at the earliest but not later than the
immediate next Board meeting or three months from the date of such
vacancy whichever is later.
The Board of Directors, at their meeting held on May 19, 2015, had
proposed the appointment of Ms. Punita Lai (DIN: 03412604) as an
Independent Director of the Company. The Company, in compliance with
the applicable regulatory requirements requiring it to obtain prior
permission of the Ministry of Information & Broadcasting (''MIB'') for
any appointment of director to its Board of Directors, duly applied to
the MIB on June 1, 2015. MIB, vide its letter dated February 5, 2016,
conveyed its approval for Ms. Lai''s appointment as a Director. Members
of the Company have approved the appointment of Ms. Punita Lai (DIN:
03412604) as the Independent Non-executive Director of the Company
through postal ballot voting process. Her appointment as the
Independent Non-executive Director is for a term of five consecutive
years commencing from March 28, 2016. With effect from March 28, 2016,
the Company is in compliance with the requirements of the Companies
Act, 2013 and Listing Regulations relating to the composition of the
Board of Directors.
17 Cost Auditor and report
The Board of Directors, on recommendation of the Audit Committee and
pursuant to Section 148 and all other applicable provisions of the Act,
read with the Companies (Audit and Auditors) Rules, 2014 and all other
applicable rules made under the Act (including any statutory
modification(s) or re-enactment thereof for the time being in force),
has approved the appointment and remuneration of the Cost Auditors,
M/s. R. Nanabhoy & Co., Cost Accountants (Firm registration number-
00010) to conduct the audit of the cost records of the Company for the
financial year ending on March 31, 2017. The aforesaid appointment of
M/s. R. Nanabhoy & Co. is subject to the relevant notifications,
orders, rules, circulars, etc. issued by the Ministry of Corporate
Affairs and other regulatory authorities from time to time. The
remuneration payable to M/s. R. Nanabhoy & Co. shall be Rs.4,50,000
(Rupees four lacs fifty thousand only) plus out of pocket expenses and
applicable taxes for the aforesaid audit. The remuneration payable to
the Cost Auditors is required to be ratified subsequently by the
shareholders. Accordingly, consent of the members has been sought for
passing the resolution as set out at Item No. 6 of the Notice convening
the AGM for ratification of the remuneration payable to the Cost
Auditors for the financial year ending on March 31, 2017.
The Cost Audit Report for the financial year 2014- 15 was filed on
September 24, 2015. The Cost Audit Report for the financial year
2015-16 will be filed on/ before the due date.
18 Conservation of energy, Technology absorption ^^and Foreign exchange
earnings and Outgo
The Company is in the business of Private FM Radio Broadcasting. Hence,
most of the information required to be provided relating to the
Conservation of energy and Technology absorption is not applicable.
However the information, as applicable, is given hereunder:
i) Conservation of energy:
The operations of the Company are not energy intensive. Nevertheless,
continuous efforts such as installation of energy efficient electronic
devices, implementation of SOPs etc. aimed at reducing energy
consumption are being made by the Company and its employees to reduce
the wastage of scarce energy resources.
ii) Technology absorption:
- The efforts made towards technology absorption and benefits derived
like product improvement, cost reduction, product development or import
substitution:
The Customer Relationship Management (CRM) solutions has seen high
level of adoption. And with this headway, the natural progression for
ENIL is to get to Mobility and Analytics. We are in the process of
rolling out CRM on mobile and also build reporting and analytical tools
to improve business opportunities.
We have rolled out Digital Content Repository system to manage the
programming content. This helps in archival, meta tag and easy search
of content at any given point of time. We look forward to reaping the
benefits during the ensuing years.
As part of the expansion of Mirchi under Phase 111, we have taken care
to adopt the best of technology at optimum pricing, to ensure good
return on investments.
- Imported technology (imported during last three years reckoned from
the beginning of the financial year): Nil
- The expenditure incurred on Research & Development (R & D): Foray in
the
Digital Space:
We have strengthened our presence and now stream 14 radio stations with
many more in the pipeline. We have launched regional online radio
stations too - in Tamil, Telugu, Punjabi to diversify our appeal. Our
partnership with Gaana is helping us get a world class technology and
marketing infrastructure to reach our online consumers. We have plans
for strengthening our online presence through a refresh of our website
and development of new apps. We now stream more than 8Mn video views a
month on our YouTube channel.
iii) Foreign exchange earnings and outgo:
The Foreign Exchange earned in terms of actual inflows during the year
and the Foreign Exchange outgo during the year in terms of actual
outflows.
Amount in Rs.
Financial Year Financial Year
2015-2016 2014-2015
Foreign exchange 56,684,997 47,964,561
earnings
Foreign exchange 64,831,617 4,145,846
outgo
19 Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197 of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
appended as Annexure D to this Report.
The Managing Director of the Company does not receive any remuneration
or commission from holding Company or any of its subsidiaries.
As per the provisions of Section 197 of the Act read with the Rules
5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other relevant particulars of the employees drawing remuneration in
excess of the limits set out in the said rules forms part of the Annual
Report. As per the first proviso to Section 136(1) of the Act, the
Annual Report excluding the aforesaid information is being sent to the
members of the Company. The said information is made available for
inspection at the Registered Office and Corporate Office of the Company
during working hours for a period of 21 days before the date of AGM.
Any member interested in obtaining such information may write to the
Company Secretary and the same will be furnished on request. The Annual
Report is available on the Company''s website at: www.enil.co.in
20 Extract of Annual Return
Extract of Annual Return of the Company as required under Section 92 of
the Act is attached as Annexure E to this Report in the Form MGT 9.
21 Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
- any equity shares with differential rights as to dividend, voting or
otherwise;
- any shares to its employees under the Employees Stock Option Scheme;
- any Sweat Equity Shares.
The equity shares of the Company are listed and admitted to dealings on
BSE Limited (BSE) and National Stock Exchange of India Limited (NSE)
since February 15, 2006. Annual Listing Fee has been paid to each
exchange. As required under the Listing Regulations, the Company has
executed the Uniform Listing Agreement with NSE and BSE.
22 Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under
review as stipulated under Regulation 34 of the Listing Regulations is
set out in a separate section forming part of this Report.
23 Business Responsibility Report
As per the amendment in the Regulation 34 of the Listing Regulations
notified on December 22, 2015, the requirement of mandatory reporting
of Business Responsibility Report in the Annual Report has been raised
from top hundred to top five hundred listed entities based on market
capitalization and said notification is applicable effective from April
1, 2016 and should form part of the Annual Report for the financial
year 2016-17 onwards. Asa matter of proactive corporate governance
compliance, the Company has voluntarily published a separate Business
Responsibility Report (''BRR'') for the financial year under review as
stipulated under Regulation 34 of the Listing Regulations. BRR is in
line with the key principles stated in the ''National Voluntary
Guidelines on Social, Environmental and Economic Responsibilities of
Business'' framed by the Ministry of Corporate Affairs.
As a green initiative, the BRR is made available on your Company''s
website, www.enil.co.in. The BRR shall be kept open for inspection at
the Registered Office and Corporate Office of the Company. Any member
interested in obtaining a hard copy of the BRR may write to the Company
Secretary.
24 corporate Governance
The Company is adhering to good corporate governance practices in every
sphere of its operations. The Company has taken adequate steps to
comply with the applicable provisions of Corporate Governance as
stipulated under the Listing Regulations. A separate report on
Corporate Governance is enclosed as a part of this Report along with
the Certificate from the Practicing Company Secretary.
25 Directors'' Responsibility Statement
Pursuant to the provisions of Section 134 of the Act, the Directors
hereby confirm that:
a) in the preparation of the annual accounts for the financial year
ended on March 31, 2016, the applicable accounting standards have been
followed and that there are no material departures from the same;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended on March 31, 2016
and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and
such internal financial controls are adequate and operating
effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
26 Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company
during the financial year under review with related parties were in the
ordinary course of business and on an arm''s length basis. During the
financial year under review, the Company has not entered into any
contract / arrangement / transaction with related parties which could
be considered material in accordance with the Company''s Policy on
materiality of related party transactions. Since no Material Related
Party Transactions, i.e. transactions exceeding ten percent of the
annual consolidated turnover as per the last audited financial
statements, were entered during the year by the Company, the disclosure
of Related Party Transactions as required under Section 134(3) (h) of
the Act in the Form AOC 2 is not applicable.
The Company''s Policy on Materiality of related party transactions and
dealing with related party transactions is available on the Company''s
website at: www.enil.co.in at http://www.enil.co.in/policies-
code-of-conduct.php
The related party transactions are entered into based on business
exigencies such as synergy in operations, profitability, market share
enhancement etc. and are intended to further the Company''s interests.
In accordance with the applicable accounting standards, transactions
with related parties are furnished in the financial statements.
27 Particulars of loans given, investment made, guarantees given and
securities provided
The Company has not given any loans, guarantees under Section 186 of
the Act. Particulars of investments made by the Company during the
financial year 2015-16 are provided in the financial statements. Please
refer to the Note no. 12 to the standalone financial statements for
details of investments made by the Company.
28 Risk Management
The Board of Directors is entrusted with various key functions
including framing, implementing and monitoring the risk management plan
for the Company; ensuring the integrity of the Company''s accounting and
financial reporting systems, including the independent audit, and that
appropriate systems of control are in place, in particular, systems for
risk management, financial and operational control, and compliance with
the laws and relevant standards.
The Board of Directors has adopted the Risk Management Policy coupled
with the Enterprise Risk Management framework and also established
related procedures to inform Board Members about the risk assessment
and minimization procedures. Major risks are identified, adequately
mitigated continuously and the same are reported to the Audit Committee
and Board of Directors along with the action taken report. Risk
Management Policy envisages assessment of strategy risk, operational
risk, financial risk, regulatory risk, human resource risk,
technological risk.
Risk Management Policy adopted by the Company involves identification
and prioritization of risk events, categorization of risks into High,
Medium and Low based on the business impact and likelihood of
occurrence of risks and Risk Mitigation & Control.
The Audit Committee reviews adequacy and effectiveness of the Company''s
internal control environment and monitors the implementation of audit
recommendations, including those relating to strengthening of the
Company''s Risk Management policies, systems and procedures. Internal
Audit function is entrusted to KPMG- the independent Internal Auditors.
Internal Audit covers all the radio stations at pan India level and
corporate office as per the annual audit plan approved by the Audit
Committee. Internal Audit report is presented to the Audit Committee on
regular basis and the Chairman of the Audit Committee briefs the Board
of Directors about the same.
29 Internal Financial Controls
The Company has in place adequate internal financial controls with
reference to financial statements. The Company''s internal control
systems, including internal financial controls, are commensurate with
the nature of its business and the size and complexity of its
operations and same are adequate and operating effectively. These
systems are periodically tested and no reportable material weakness in
the design or operation was observed. The Audit Committee reviews
adequacy and effectiveness of the Company''s internal control system
including internal financial controls.
30 Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting
standard, the audited Consolidated Financial Statements are provided
and forms part of the Annual Report.
31 Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Company''swholly
owned subsidiary since 2007. ABSL recorded a total income of
Rs.138,231 during the financial year 2015-16. Loss after Tax stood at?
134,671 for the financial year under review.
As per Section 129 of the Companies Act, 2013, separate statement
containing the salient features of the financial statements of the
Subsidiary Company are attached along with the financial statements in
the prescribed Form AOC-1. The Company does not have any associate
company or joint venture.
The Company shall make available the financial statements and the
related detailed information of its subsidiary to any Member of the
Company or its subsidiary who may be interested in obtaining the same
at any point of time and same is also available on the website:
www.enil.co.in. These documents will also be available for inspection
during business hours at the Registered Office and Corporate Office of
the Company. The Consolidated Financial Statements presented by the
Company include financial results of its Subsidiary Company.
The audited financial statements, including consolidated financial
statements and all other relevant documents required to be attached
thereto are available on the Company''s website: www.enil.co.in
The Policy for determining material subsidiaries is available on the
Company''s website: www.enil.co.in at http://www.enil.co.in/policies-
code-of-conduct.php
32 Significant or material order
During the financial year under review, no significant and material
orders were passed by the regulators or courts or tribunals impacting
the going concern status and the Company''s operations in future.
33 Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and
harassment-free workplace for every individual working in the Company.
During the financial year under review, four complaints pertaining to
sexual harassment were reported to the Internal Complaints Committee of
the Company. After detailed investigation and following due procedure
under the applicable law, guidelines and regulations, the said
complaints were appropriately dealt with during the financial year
under review and appropriate action was taken.
34 Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confidence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and co-operation and acknowledge that their efforts have enabled the
Company to achieve new heights of success.
For and on behalf of the Board of Directors
sd/-
Vineet Jain
Chairman
(DIN:00003962)
Mumbai, May 19, 2016
Registered Office:
Entertainment Network (India) Limited,
CIN: L92U0MH1999PLC120516,
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg, Lower Parel (West),
Mumbai -400 013.
www.enil.co.in
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the Sixteenth Annual Report
together with the audited financial statements of Entertainment Network
(India) Limited [''the Company''/ ''ENIL/ ''Radio Mirchi''] for the
financial year ended March 31,2015.
1. Financial Highlights
Amount in Rs.
Standalone
inancial Year Financial Year
2014-15 2013-2014
Income 4,706,548,014 4,071,657,231
Profit before tax & exceptional
item 1,446,093,211 1,154,952,773
Tax expense 386,372,615 320,463,042
Profit after tax 1,059,720,596 834,489,731
Profit brought forward 3,439,832,942 2,661,115,213
Authorised Capital 1,200,000,000 1,200,000,000
Equity (issued, subscribed &
paid up share capital) 476,704,150 476,704,150
Transfer to General Reserve Nil Nil
Adjustments due to change in 58,324,116 Nil
rates of Depreciation
Proposed dividend (including 57,374,990 55,772,002
dividend distribution tax)
Surplus carried to Balance 4,383,854,432 3,439,832,942
Sheet
Consolidated
Financial Year Financial Year
2014-15 2013-2014
Income 4,707,588,061 4,073,943,624
Profit before tax & exceptional
item 1,446,144,866 1,156,150,044
Tax expense 386,374,869 319,947,119
Profit after tax 1,059,769,997 836,202,925
Profit brought forward 3,440,798,255 2,660,367,332
Authorised Capital 1,200,000,000 1,200,000,000
Equity (issued, subscribed &
paid up share capital) 476,704,150 476,704,150
Transfer to General Reserve Nil Nil
Adjustments due to change in 58,324,117 Nil
rates of Depreciation
Proposed dividend (including 57,374,990 55,772,002
dividend distribution tax)
Surplus carried to Balance 4,384,869,145 3,440,798,255
Sheet
2. Financial Performance
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased
from Rs. 4,071,657,231 during the previous year to Rs. 4,706,548,014
during the year under review. Profit after tax was higher at Rs.
1,059,720,596.
On a consolidated basis, total income of the Company increased from Rs.
4,073,943,624 during the previous year to Rs. 4,707,588,061 during the
year under review. Profit after tax was higher at Rs. 1,059,769,997.
The financial performance is discussed in detail in the Management
Discussion and Analysis Report which forms part of the Annual Report.
3. Dividend
Your Directors are pleased to recommend a dividend of Rs. 1.00 (Rupee
one only) per equity share of Rs. 10/- each for the financial year
ended March 31,2015, aggregating Rs. 573.75 lacs including dividend
distribution tax of Rs. 97.05 lacs. The dividend payment is subject to
the approval of the shareholders at the ensuing Annual General Meeting
(AGM).
The dividend, if declared at the AGM, would be paid/ dispatched within
thirty days from the date of declaration of dividend to those persons
or their mandates:
* whose names appear as beneficial owners as at the end of the business
hours on September 7, 2015 in the list of the Beneficial Owners to be
obtained from the Depositories i.e. National Securities Depository
Limited [NSDL] and Central Depository Services (India) Limited [CDSL],
in respect of the shares held in electronic/ dematerialized mode; and
* whose names appear as Members in the Register of Members of the
Company as on September 7, 2015, after giving effect to valid share
transfers in physical forms lodged with the Company/ Registrar & Share
Transfer Agents, in respect of the shares held in physical mode.
4. Operations and state of the Company''s affairs
Your Company''s financial results are because of strong underlying
reasons. Listenership has remained strong, with the latest IRS placing
your Company again right at the top. Listenership in the top 8 metros
is the most crucial, given the weight of these markets in revenues, and
your Company has continued to show strong leads in these cities. Your
Company has also spent on several marketing campaigns during the year,
supporting new programming initiatives, like the launch of a new
"breaking music" show in Mumbai, re-launch of Mumbai''s favorite morning
show "Mumbai ki Awaaz- Jeeturaaj", the launch of Delhi''s morning show
with "Recharge Rohit", supporting the massively popular "Mirchi Murga"
and launching the morning show "Hi Bengaluru" in Bengaluru.
The strong leadership in listenership is a result of your Company''s
ability to hire and retain superior quality talent. That remains a
strength of your Company, a strength that emerges partly from the
parent company, Bennett Coleman & Company Limited, and partly from its
own unique culture of "fun @ ENIL".
Your Company made an important stride this year. It entered the elite
list of companies which report more than Rs. 100 crores in PAT. With
more growth coming its way in the form of Phase-3 auctions and
expansion, your Company''s cash position of over Rs. 550 crores will
stand it in good stead.
The Company had entered into a non-binding memorandum of understanding
with TV Today Network Limited (TVTN) for purchase of seven radio
stations from TVTN. The purchase was subject to fulfillment of
contractual obligations (which may be agreed between the parties) and
receipt of all necessary regulatory approvals including permissions
from the Ministry of Information and Broadcasting (MIB), Government of
India.
The MIB has declined its approval on the grounds that the proposed sale
by TVTN and proposed purchase by the Company is not in conformity with
the FM Radio Guidelines. However, both the Company and TVTN have
decided to appeal against the MIB decision.
There were 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 this financial statements relate
and the date of this Report.
5. Deposits from public
The Company has not accepted any deposits from public and therefore the
details relating the deposits covered under Chapter V of the Companies
Act, 2013 are not required to be furnished.
6. Directors and Key Managerial Personnel
On April 3, 2015; through a Postal Ballot voting process, the Members
of the Company accorded their approval to partially modify the terms of
appointment of Mr. Prashant Panday - Managing Director & Chief
Executive Officer (DIN: 02747925). Pursuant to the aforesaid
modification approved by the Members, Mr. Panday shall be liable to
retire by rotation.
In accordance with the provisions of the Companies Act, 2013 read with
the applicable rules thereto, including any statutory modification(s)
or re-enactment thereof for the time being in force (''the Act''), Mr.
Prashant Panday retires by rotation at the ensuing AGM and being
eligible, offers himself for reappointment.
During the financial year under review, Mr. A. P. Parigi (DIN:
00087586) and Mr. Ravindra Dhariwal (DIN: 00003922) resigned from the
Board of Directors of the Company due to other pre-occupations. Ms.
Vibha Paul Rishi (DIN: 05180796) resigned from the Board of Directors
of the Company as per the relevant regulatory policy applicable to the
Company. The Board of Directors places on record their appreciation for
the valuable contributions made by Mr. Parigi, Mr. Dhariwal and Ms.
Vibha Paul Rishi to the Company.
The Board of Directors proposed to appoint Ms. Punita Lal (DIN:
03412604) as the Independent Director on the Board of the Company. The
Company has completed all the regulatory procedures for appointment of
Ms. Punita Lal. Her appointment will be subject to the approval/ no
objection from the Ministry of Information & Broadcasting (MIB). The
approval/ no objection from the MIB is expected in due course.
The Company has received the declarations from all the Independent
Directors of the Company pursuant to the provisions of Section 149 and
all other applicable provisions of the Act stating that they meet the
criteria of independence as provided under the Act and Clause 49 of the
Listing Agreement and that they are not disqualified to become
directors under the Act; and in the opinion of the Board of Directors,
all the Independent Directors fulfill the criteria of independence as
provided under the Act, rules made thereunder, read with the Clause 49
of the Listing Agreement and that they are independent of the
management.
Brief resume of the director proposed to be reappointed, relevant
information, nature of his expertise in specific functional areas,
names of the companies in which he holds directorships and the
memberships/ chairmanships of Committees of the Board and his
shareholding in the Company, as stipulated under Clause 49 of the
Listing Agreement, have been furnished separately in the Notice
convening the AGM read with the Annexure thereto forming part of this
Report.
None of the Directors are related with each other or key managerial
personnel (inter-se).
Details of the number of meetings of the Board of Directors and
Committees and attendance at the meetings have been furnished in the
Report on Corporate Governance.
During the financial year under review, following persons were
designated as Key Managerial Personnel (KMP):
* Mr. Prashant Panday: Managing Director & CEO
* Mr. N. Subramanian: Group CFO
* Mr. Mehul Shah: SVP Compliance & Company Secretary
7. Board Evaluation
The Board of Directors is committed to continued improvement in its
effectiveness. Accordingly, the Board participated in the annual formal
evaluation of its performance. This was designed to ensure, amongst
other things, that the Board, its Committees and each director continue
to contribute effectively.
The Board and its Committees evaluations involved questionnaire-driven
discussions that covered a number of key areas / evaluation criteria
inter alia the roles and responsibilities, size and composition of the
Board and its Committees, dynamics of the Board and its Committees and
the relationship between the Board and management. The results of the
reviews were discussed with the relevant Committees and collectively by
the Board as a whole. Feedback was also sought on the contributions of
individual directors. Independent directors, at their Meeting led by
the Chairman of the Nomination & Remuneration Committee, conducted the
performance review of the Chairman, Non- Independent Directors and the
Board as a whole in respect of the financial year under review.
Formal Annual Evaluation was made in compliance with all the applicable
provisions of the Act and the listing agreement. The Directors were
satisfied with the evaluation results, which reflected the overall
engagement of the Board and its Committees with the Company.
8. Board Familiarization Program
At the time of appointment of new director, through the induction
process, he/ she is familiarized with the Company, director''s roles,
rights, responsibilities in the Company, nature of the industry in
which the Company operates, business model of the Company, etc.
Detailed presentations are made before the Board Members at the Board
and its Committee meetings covering various areas including business
strategy, branding, programming, financial performance and forecast,
compliances/ regulatory updates, audit reports, risk assessment and
mitigation, etc. The details of the familiarization program are
available on the Company''s website at: www.enil.co.in at web link:
http://www.enil. co.in/policies-code-of-conduct.php
9. Policy on directors'' appointment and remuneration
The Company''s Policy on the Directors'' appointment and remuneration
including criteria for determining qualifications, positive attributes,
independence of director and other matters as provided under Section
178 of the Act is annexed to this Report at the Nomination &
Remuneration Policy and appended as Annexure A to this Report.
10. Audit Committee
The Audit Committee of the Company presently comprises of Mr. N. Kumar
(Chairman), Mr. Ravindra Kulkarni, Mr. Richard Saldanha and Mr. B. S.
Nagesh. The Internal Auditors of the Company report directly to the
Audit Committee. All the recommendations of the Audit Committee were
accepted by the Board of Directors. Major terms of reference and other
relevant details of the Audit Committee have been furnished in the
Report on Corporate Governance.
11. Vigil Mechanism
The Company has a ''Whistle Blower Policy'' / ''Vigil Mechanism'' in place.
The Objective of the Vigil Mechanism is to provide the employees,
directors, customers, vendors, contractors and other stakeholders of
/in the Company an impartial and fair avenue to raise concerns and seek
their redressal, in line with the Company''s commitment to the highest
possible standards of ethical, moral and legal business conduct and
fair deal to all its stakeholders and constituents and its commitment
to open communication channels. The Company is also committed to
provide requisite safeguards for the protection of the persons who
raise such concerns from reprisals or victimization, for whistle
blowing in good faith. The Board of Directors affirms and confirms that
no personnel has been denied access to the Audit Committee. The Policy
contains the provision for direct access to the chairperson of the
Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/ Vigil Mechanism is available on the Company''s
website at: www.enil.co.in at
http://www.enil.co.in/policies-code-of-conduct.php
12. CSR Committee
Major terms of reference and other relevant details of the Corporate
Social Responsibility (CSR) Committee and CSR Policy have been
furnished in the Report on Corporate Governance. The CSR Policy is
available on the Company''s website at: www.enil.co.in at
http://www.enil.co.in/policies-code-of-conduct.php
Annual report on CSR activities as required under the Companies
(Corporate Social Responsibility Policy) Rules, 2014 has been appended
as Annexure B to this Report.
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently
comprises of Mr. N. Kumar (Chairman), Mr. Ravindra Kulkarni, Mr.
Richard Saldanha and Mr. Vineet Jain Major terms of reference and other
relevant details of the Nomination and Remuneration Committee have been
furnished in the Report on Corporate Governance.
14. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently
comprises of Mr. Richard Saldanha (Chairman), Mr. Ravindra Kulkarni and
Mr. Prashant Panday. Major terms of reference and other relevant
details of the Stakeholders Relationship Committee have been furnished
in the Report on Corporate Governance.
15. Audit Report
The Audit Report does not contain any qualification, reservation or
adverse remark.
16. Auditors
At the 15th AGM held on August 12, 2014, the Members had approved the
appointment of S. R. Batliboi & Associates LLP, Chartered Accountants
(registration number- 101049W) as the statutory auditors of the Company
to hold the office from the conclusion of the 15th AGM till the
conclusion of the sixth consecutive AGM (with the meeting wherein such
appointment has been made being counted as the first meeting). As per
the provisions of Section 139 of the Act, the Company shall place the
matter relating to such appointment for ratification by members at
every AGM. Accordingly, the appointment of S. R. Batliboi & Associates
LLP Chartered Accountants, as the statutory auditors of the Company is
placed for ratification by the members of the Company.
S. R. Batliboi & Associates LLP have furnished a certificate in terms
of the Companies (Audit and Auditors) Rules, 2014 and confirmed their
eligibility in terms of Section 141 and all other applicable provisions
of the Act, read with the applicable rules thereto.
Other relevant information has been furnished at Item No. 5 of the
Notice convening the AGM.
17. Secretarial Auditor
The Board of Directors had appointed M/s. Hemanshu Kapadia &
Associates, Company Secretaries (C. P No: 2285), to conduct Secretarial
Audit for the financial year 2014-15. The Secretarial Audit Report for
the financial year ended March 31, 2015 is appended as Annexure C to
this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
18. Cost Auditor
The Board of Directors, on recommendation of the Audit Committee and
pursuant to Section 148 and all other applicable provisions of the Act,
read with the Companies (Audit and Auditors) Rules, 2014 and all other
applicable rules made under the Act (including any statutory
modification(s) or re-enactment thereof for the time being in force),
has approved the appointment and remuneration of the Cost Auditors, M/s
R. Nanabhoy & Co., Cost Accountants (Firm registration number-00010) to
conduct the audit of the cost records of the Company for the financial
year ending on March 31,2016. The aforesaid appointment of M/s. R.
Nanabhoy & Co. is subject to the relevant notifications, orders, rules,
circulars, etc. issued by the Ministry of Corporate Affairs and other
regulatory authorities from time to time. The remuneration payable to
M/s. R. Nanabhoy & Co. shall be Rs. 4,50,000 (Rupees four lacs fifty
thousand only) plus out of pocket expenses and applicable taxes for the
aforesaid audit. The remuneration payable to the Cost Auditors is
required to be ratified subsequently by the shareholders. Accordingly,
consent of the members has been sought for passing the resolution as
set out at Item No. 6 of the Notice convening the AGM for ratification
of the remuneration payable to the Cost Auditors for the financial year
ending on March 31,2016.
The Cost Audit Report for the financial year 2013- 14 was filed on
September 27, 2014. The Cost Audit Report for the financial year
2014-15 will be filed on/ before the due date.
19. Conservation of energy, Technology absorption and Foreign exchange
earnings and Outgo
The Company is in the business of Private FM Radio Broadcasting. Hence,
most of the information required to be provided relating to the
Conservation of energy and Technology absorption is not applicable.
However the information, as applicable, is given hereunder:
i) Conservation of energy:
The operations of the Company are not energy intensive. Nevertheless,
continuous efforts such as installation of energy efficient electronic
devices, implementation of SOPs etc. aimed at reducing energy
consumption are being made by the Company and its employees to reduce
the wastage of scarce energy resources.
ii) Technology absorption:
* The efforts made towards technology absorption:
In our efforts to use technology to augment business, productivity and
performance, we are in the process of rolling out Customer Relationship
Management (CRM) solutions for all business segments. Many internet
radio stations have been rolled out during the current year. We are
also in the process of rolling out a Digital content Repository system
to manage the programming content that we have created all these years
and would create in the future. To improve collaboration, Radio Mirchi
Employees have been migrated to Office 365.
* The benefits derived like product improvement, cost reduction,
product development or import substitution:
Benefits are in the nature of increased productivity through easy
search of content, price & revenue optimization through factor based
dynamic pricing & cost reduction through improved productivity and
better processes.
* Imported technology (imported during last three years reckoned from
the beginning of the financial year): Nil
* The expenditure incurred on Research & Development (R & D): Foray in
the Digital Space:
The Company is adequately prepared to adapt to the new technologies
that are transforming media business. We currently have 10 online radio
stations. And additional 3 online radio stations are expected to be
launched by end of September 2016. We are working closely with tech
partners to create mobile-content solutions for brands, which is
already giving us a steady business too. We have launched our first app
''Mirchi Murga'' on the Apple and Android stores. The ''Mirchi Murga'' app
has already been downloaded 1.3 lacs times, and generates 2 million
screen views already, and is highly rated. We continue to create new
digital friendly content, and get over 3 million views a month from our
videos on Youtube. We are developing new video facilities to innovate
more on video content.
iii) Foreign exchange earnings and outgo:
The Foreign Exchange earned in terms of actual inflows during the year
and the Foreign Exchange outgo during the year in terms of actual
outflows.
Amount in Rs.
Financial Year Financial Year
2014-2015 2013-2014
Foreign exchange 47,964,561 43,398,508
earnings
Foreign exchange 4,145,846 7,578,466
outgo
20. Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197 of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
appended as Annexure D to this Report.
The Managing Director of the Company does not receive any remuneration
or commission from holding Company or any of its subsidiaries.
As per the provisions of Section 197 of the Act read with the Rules
5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other relevant particulars of the employees drawing remuneration in
excess of the limits set out in the said rules forms part of the Annual
Report. As per the first proviso to Section 136(1) of the Act, the
Annual Report excluding the aforesaid information is being sent to the
members of the Company. The said information is made available for
inspection at the Registered Office and Corporate Office of the Company
during working hours for a period of 21 days before the date of AGM.
Any member interested in obtaining such information may write to the
Company Secretary and the same will be furnished on request. The Annual
Report is available on the Company''s website at: www.enil.co.in
21. Extract of Annual Return
Extract of Annual Return of the Company as required under Section 92 of
the Act, is attached as Annexure E to this Report in the Form MGT 9.
22. Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
* any equity shares with differential rights as to dividend, voting or
otherwise;
* any shares to its employees under the Employees Stock Option Scheme;
* any Sweat Equity Shares.
The equity shares of the Company are listed and admitted to dealings on
BSE Limited (BSE) and National Stock Exchange of India Limited (NSE)
since February 15, 2006. Annual Listing Fee has been paid to each
exchange.
23. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement is set out
in a separate section forming part of this Report.
24. Corporate Governance
The Company is adhering to good corporate governance practices in every
sphere of its operations. The Company has taken adequate steps to
comply with the applicable provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement entered into with the
Stock Exchanges. A separate report on Corporate Governance is enclosed
as a part of this Report along with the Certificate from the Practicing
Company Secretary confirming compliance with the conditions of
Corporate Governance.
25. Directors'' Responsibility Statement
Pursuant to the provisions of Section 134 of the Act, the Directors
hereby confirm that:
a) in the preparation of the annual accounts for the financial year
ended on March 31, 2015, the applicable accounting standards have been
followed and that there are no material departures from the same;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended on March 31,2015 and
of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and
such internal financial controls are adequate and operating
effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
26. Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company
during the financial year under review with related parties were in the
ordinary course of business and on an arm''s length basis. During the
financial year under review, the Company has not entered into any
contract / arrangement / transaction with related parties which could
be considered material in accordance with the Company''s Policy on
materiality of related party transactions. Since no Material Related
Party Transactions, i.e. transactions exceeding ten percent of the
annual consolidated turnover as per the last audited financial
statements, were entered during the year by the Company, the disclosure
of Related Party Transactions as required under Section 134(3) (h) of
the Act, in the Form AOC 2 is not applicable.
The Company''s Policy on Materiality of related party transactions and
dealing with related party transactions is available on the Company''s
website at: www.enil.co.in at http://www.enil.co.in/policies-code-of-
conduct.php
The related party transactions are entered into based on business
exigencies such as synergy in operations, profitability, market share
enhancement etc. and are intended to further the Company''s interests.
In accordance with the applicable accounting standards, transactions
with related parties are furnished in the financial statements.
27. Particulars of loans given, investment made, guarantees given and
securities provided
The Company has not given any loans, guarantees under Section 186 of
the Act. Particulars of investments made by the Company during the
financial year 2014-15 are provided in the financial statements. Please
refer to the Note no. 10 to the standalone financial statements for
details of investments made by the Company.
28. Risk Management
The Board of Directors is entrusted with various key functions
including framing, implementing and monitoring the risk management plan
for the Company; ensuring the integrity of the Company''s accounting and
financial reporting systems, including the independent audit, and that
appropriate systems of control are in place, in particular, systems for
risk management, financial and operational control, and compliance with
the laws and relevant standards.
The Board of Directors has adopted the Risk Management Policy coupled
with the Enterprise Risk Management framework and also established
related procedures to inform Board Members about the risk assessment
and minimization procedures. Major risks are identified, adequately
mitigated continuously and same are reported to the Audit Committee and
Board of Directors along with the action taken report. Risk Management
Policy envisages assessment of strategy risk, operational risk,
financial risk, regulatory risk, human resource risk, technological
risk.
Risk is assessed and mitigated by the Risk Management Procedure
involving identification and prioritization of risk events;
Categorization of risks into High, Medium and Low based on the business
impact and likelihood of occurrence of risks; Risk Mitigation & Control
and update risk identification and prioritization.
The Audit Committee reviews adequacy and effectiveness of the Company''s
internal control environment and monitors the implementation of audit
recommendations, including those relating to strengthening of the
Company''s Risk Management policies, systems and procedures. Internal
Audit function is entrusted to KPMG-the independent Internal Auditors.
Internal Audit covers all the radio stations at pan India level and
corporate office as per the annual audit plan approved by the Audit
Committee. Internal Audit report is presented to the Audit Committee on
regular basis and the Chairman of the Audit Committee briefs the Board
of Directors about the same.
29. Internal Financial Controls
The Company has in place adequate internal financial controls with
reference to financial statements. The Company''s internal control
systems, including internal financial controls, are commensurate with
the nature of its business and the size and complexity of its
operations and same are adequate and operating effectively. These
systems are periodically tested and no reportable material weakness in
the design or operation was observed. The Audit Committee reviews
adequacy and effectiveness of the Company''s internal control system
including internal financial controls.
30. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting
standard, the audited Consolidated Financial Statements are provided
and forms part of the Annual Report.
31. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Company''s
wholly owned subsidiary since 2007. ABSL recorded a total income of
Rs. 1,040,047 during the financial year under review. Profit after Tax
stood at Rs. 39,459.
As per Section 129 of the Companies Act, 2013, separate statement
containing the salient features of the financial statements of the
Subsidiary Company are attached along with the financial statements in
the prescribed Form AOC-1. The Company does not have any associate
company or joint venture.
The Company shall make available the financial statements and the
related detailed information of its subsidiary to any Member of the
Company or its subsidiary who may be interested in obtaining the same
at any point of time and same is also available on the website:
www.enil.co.in. These documents will also be available for inspection
during business hours at the Registered Office and Corporate Office of
the Company. The Consolidated Financial Statements presented by the
Company include financial results of its Subsidiary Company.
The audited financial statements, including consolidated financial
statements and all other relevant documents required to be attached
thereto are available on the Company''s website: www.enil.co.in
The Policy for determining material subsidiaries is available on the
Company''s website: www.enil.co.in at
http://www.enil.co.in/policies-code-of-conduct.php
32. Significant or material order
During the financial year under review, no significant and material
orders were passed by the regulators or courts or tribunals impacting
the going concern status and the Company''s operations in future.
33. Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and
harassment-free workplace for every individual working in the Company.
As per the requirement of The Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 and Rules made
thereunder, the Company has constituted an Internal Complaints
Committees. During the financial year under review, no complaint was
filed under the aforesaid Act.
34. Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confidence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and co-operation and acknowledge that their efforts have enabled the
Company to achieve new heights of success.
For and on behalf of the Board of Directors
sd/-
Vineet Jain
Chairman
(DIN: 00003962)
Mumbai, May 19, 2015
Registered Office:
Entertainment Network (India) Limited,
CIN: L92140MH1999PLC120516,
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg, Lower Parel (West),
Mumbai - 400 013.
www.enil.co.in
Mar 31, 2014
The Directors have pleasure in presenting this Fifteenth Annual Report
together with the audited annual accounts of Entertainment Network
(India) Limited [''the Company''/ ''ENIL''/ ''Radio Mirchi''] for the
financial year ended March 31, 2014.
1. Financial Highlights
Amount in Rs
Financial Year Financial Year
2013-2014 2012-2013
Income 4,071,657,231 3,553,609,049
Profit before tax & exceptional item 1,154,952,773 894,443,457
Tax expense 320,463,042 217,732,607
Profit after tax 834,489,731 676,710,850
Profit brought forward 2,661,115,213 2,040,176,365
Equity (issued, subscribed & paid
up share capital) 476,704,150 476,704,150
Transfer to General Reserve Nil Nil
Proposed dividend (including
dividend distribution tax) 55,772,002 55,772,002
Surplus carried to Balance Sheet 3,439,832,942 2,661,115,213
2. Financial Performance
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased
from RS. 3,553,609,049 during the previous year to RS. 4,071,657,231 during
the year under review. Profit after tax was higher at RS. 834,489,731.
The financial performance is discussed in detail in the Management
Discussion and Analysis Report which forms part of the Annual Report.
3. Dividend
Your Directors are pleased to recommend a dividend of RS. 1.00 (Rupee one
only) per equity share of RS. 10/- each for the financial year ended
March 31, 2014, aggregating RS. 557.72 lacs including dividend
distribution tax. The dividend payment is subject to the approval of
the shareholders at the ensuing Annual General Meeting (AGM).
The dividend, if declared at the AGM, would be paid/ dispatched within
thirty days from the date of declaration of dividend to those persons
or their mandates:
- whose names appear as beneficial owners as at the end of the business
hours on August 4, 2014 in the list of the Beneficial Owners to be
obtained from the Depositories i.e. National Securities Depository
Limited [NSDL] and Central Depository Services (India) Limited [CDSL],
in respect of the shares held in electronic/ dematerialized mode; and
- whose names appear as Members in the Register of Members of the
Company as on August 4, 2014, after giving effect to valid share
transfers in physical forms lodged with the Company/ Registrar & Share
Transfer Agents, in respect of the shares held in physical mode.
4. Operations
The year gone by has been a satisfactory one for your Company. Your
Company''s financial results have been impressive, considering the tough
market conditions that have prevailed. Revenue from operations has
grown by 13.7%. Further, thanks to your Company''s relentless focus on
containing costs, EBITDA from operations has grown by 19.9% and PAT by
23.3%. The Company''s revenue market share, amongst private players, has
grown marginally to between 33% and 35%. The Company''s tight focus on
operations has ensured that it generated RS.118 crores in cash during the
year. The Company''s ROE during the year was a good 15.4%. Excluding
cash assets, the ROE was very remarkable at 38%.
Your Company''s good financial health puts it in a strong position to
take advantage of the upcoming Phase-3 program of expansion. As you may
be aware, this expansion offers your Company several opportunities.
Firstly, your Company can bid for more licenses in new cities. This
geographical expansion into smaller towns will allow your Company to
offer advertising solutions to local advertisers in markets that are
likely to be the engines of future growth. Secondly, your Company can
acquire a 2nd or even 3rd frequency in the bigger markets as the policy
now allows a broadcaster to own and operate more than one channel in a
market. Your Company has identified markets where it would like to do
so. Thirdly, your Company will likely get opportunities to acquire
existing radio stations and networks via M&A deals. Again, all such
opportunities will be evaluated through the prism of profitability. At
no point will your Company be driven by the desire to be the "biggest
network". It will always be driven by the goal of being the "most
profitable network", keeping shareholder returns at the centre stage.
The outgoing government kicked off the Phase-3 auction process in April
2014 when it released an ad seeking bids from prospective
e-auctioneers. The last date for bidders has been set as 20th June.
Media reports and interactions with ministry officials suggest that the
auctions could commence by December 2014. With this, the long delay in
the launch of the policy will soon come to an end.
Another matter of significance for your Company is the expiry of its
current licenses, some of which expire on April 1, 2015. Your Company
has been engaged with the ministry and the regulator, TRAI, on this
matter, directly and through the industry body, Association of Radio
Operators of India (AROI). We are happy to inform you that TRAI has
already made recommendations for "renewal" of existing licenses as and
when they expire. TRAI has suggested a formula for calculating
"migration fees", which broadcasters need to pay to get new 15-year
licenses. The ministry has still to take a decision on these
recommendations, but we hope there will be no delays in this.
The year gone by has been satisfactory from the core brand and
listenership perspective. Your Company''s brand "Mirchi®" remains the
foremost brand in the radio space. Your Company''s listenership
performance remains strong as ever. As per the last IRS data released
(Round 2, 2013), your Company is the leader in 21 of its 32 markets.
Your Company''s listenership strengths are endorsed by advertisers, who
pay your Company premium pricing across its network. Your Company''s
brand and programming strengths are also recognized in the various
awards it has won during the year, details of which are provided in the
Management Discussion and Analysis Report.
Your Company has worked on developing a "multi- product" revenue
strategy over the last several years. Not only does it offer core radio
or "FCT" solutions to its clients, it also has strong revenue products
in Mirchi Activations, TV properties, Digital (web and mobile),
Multi-media solutions, Intellectual Properties and International
markets. These products have given your Company competitive strength
and the ability to grow faster than the industry.
FY15 is going to be a challenging year, with a lot of hopes pinned on
how the economy performs under the new government. If India continues
to languish at under 5% GDP growth for another year, the entire media
industry will face slowdown pressures. However, if as expected, the
economy starts to recover, the entire media industry will benefit.
Coupled with the expansion opportunities under Phase-3, we believe your
Company is well placed to exploit opportunities that come up in the
near future.
5. Fixed Deposits
The Company has not accepted any fixed deposits and, as such, no amount
of principal or interest was outstanding as on the date of the Balance
Sheet.
6. Directors
In accordance with the provisions of the Companies Act, 2013 (''the
Act''), Mr. Ravindra Dhariwal (DIN: 00003922) and Mr. Vineet Jain (DIN:
00003962) retire by rotation at the ensuing AGM and being eligible,
offer themselves for reappointment.
The Board of Directors of the Company, at their meeting held on May 23,
2014, approved the change in designation of Mr. Prashant Panday
(DIN: 02747925) from ''Executive Director & Chief Executive Officer'' to
''Managing Director & Chief Executive Officer'' with effect from May 23,
2014. Mr. Panday shall hold the office as ''Managing Director & Chief
Executive Officer'' for his remaining tenure i.e. up to June 30, 2016 on
the same terms and conditions including remuneration as approved by the
members at their meeting held on August 8, 2013. His office is not
liable to retire by rotation.
In accordance with the erstwhile provisions of the Companies Act, 1956,
Mr. Richard Saldanha (DIN: 00189029), Mr. Ravindra Kulkarni (DIN:
00059367), Mr. A. P. Parigi (DIN: 00087586), Mr. N. Kumar (DIN:
00007848), Mr. B. S. Nagesh (DIN: 00027595) and Ms. Vibha Paul Rishi
(DIN: 05180796) were appointed as the directors of the Company. They
have been on the Board of the Company as the Independent Non-executive
directors pursuant to Clause 49 of the listing agreement. With the
enactment of the Act, it is now incumbent upon the Company to appoint
''Independent Directors'' as defined under Section 149(6) of the Act. Mr.
Richard Saldanha, Mr. Ravindra Kulkarni, Mr. A. P. Parigi, Mr. N.
Kumar, Mr. B. S. Nagesh and Ms. Vibha Paul Rishi, being eligible and
offering themselves for appointment, are proposed to be appointed as
the Independent Directors (Independent Non-executive Directors) for a
term of five consecutive years commencing from August 12, 2014, not
liable to retire by rotation. The Company has received six notices in
writing from a member along with the requisite deposits under Section
160 of the Act proposing the candidature of these six independent
directors and the Board of Directors recommends their appointment. The
Company has also received the relevant declarations from Mr. Richard
Saldanha, Mr. Ravindra Kulkarni, Mr. A. P. Parigi, Mr. N. Kumar, Mr. B.
S. Nagesh and Ms. Vibha Paul Rishi, pursuant to Section 149(7) of the
Act, that they meet the criteria of independence as provided under
Section 149(6) of Act and that they are not disqualified to become
directors under the Act; and in the opinion of the Board of Directors,
they fulfill the conditions specified in the Act, rules made
thereunder, read with the Clause 49 of the listing agreement as
amended, for their appointment as the Independent Directors of the
Company and that they are independent of the management.
Brief resume of the Directors proposed to be appointed/ reappointed,
relevant information, nature of their expertise in specific functional
areas, names of the companies in which they hold directorships and the
memberships/ chairmanships of Committees of the Board and their
shareholding in the Company, as stipulated under Clause 49 of the
Listing Agreement entered into with the Stock Exchanges, have been
furnished separately in the Notice convening the AGM read with the
Annexure thereto forming part of this Report.
Details of the number of meetings of the Board of Directors have been
furnished in the Report on Corporate Governance.
7. Audit Committee
The Audit Committee of the Company presently comprises of Mr. N. Kumar
(Chairman), Mr. Ravindra Dhariwal, Mr. Ravindra Kulkarni and Mr.
Richard Saldanha. The Internal Auditors of the Company 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.
8. CSR Committee
The Corporate Social Responsibility Committee [CSR Committee] of the
Company presently comprises of Mr. Vineet Jain, Mr. B. S. Nagesh, Mr.
Ravindra Dhariwal, Mr. Ravindra Kulkarni and Mr. Prashant Panday. Brief
description of the terms of reference of the CSR Committee has been
furnished in the Report on Corporate Governance.
9. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently
comprises of Mr. N. Kumar, Mr. Ravindra Dhariwal, Mr. Ravindra Kulkarni
and Mr. Richard Saldanha. Brief description of the terms of reference
of the Nomination and Remuneration Committee has been furnished in the
Report on Corporate Governance.
10. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently
comprises of Mr. Ravindra Dhariwal and Mr. A. P. Parigi. Brief
description of the terms of reference of the Stakeholders Relationship
Committee has been furnished in the Report on Corporate Governance.
11. Audit Report
The Audit Report does not contain any qualification, reservation or
adverse remark or disclaimer.
12. Auditors
Messrs Price Waterhouse & Co., Bangalore, Chartered Accountants,
(registration number- 007567S) the present Statutory Auditors of the
Company hold the office until the conclusion of the 15th AGM and have
given a notice in writing expressing their inability to be considered
for reappointment as Statutory Auditors of the Company.
Pursuant to Sections 115, 140(4) and all other applicable provisions of
the Companies Act, 2013, a special notice was received from a member of
the Company proposing to appoint S. R. Batliboi & Associates LLP,
Chartered Accountants (registration number- 101049W) as the statutory
auditors of the Company in place of Messrs Price Waterhouse & Co.,
Bangalore, Chartered Accountants, (registration number- 007567S) the
retiring auditors of the Company.
Subject to the approval by the members at the ensuing AGM, S. R.
Batliboi & Associates LLP will hold office from the conclusion of this
AGM till the conclusion of the sixth consecutive AGM (with the meeting
wherein such appointment has been made being counted as the first
meeting), subject to the ratification of the appointment by the members
of the Company at every AGM after this AGM, at a remuneration as may be
recommended by the Audit Committee and fixed by the Board of Directors
of the Company in addition to out of pocket expenses as may be incurred
by them during the course of the Audit. Other relevant information has
been furnished at Item No. 5 of the Notice convening the AGM.
13. Cost Auditor
The Board of Directors, on recommendation of the Audit Committee and
pursuant to Section 148 and all other applicable provisions of the
Companies Act, 2013, read with the Companies (Audit and Auditors)
Rules, 2014 and all other applicable rules made under the Companies
Act, 2013 (including any statutory modification(s) or re-enactment
thereof for the time being in force), has approved the appointment and
remuneration of the Cost Auditors, M/s. R. Nanabhoy & Co., Cost
Accountants (Firm registration number- 00010) to conduct the audit of
the cost records of the Company for the financial year ending on March
31, 2015. The aforesaid appointment of M/s. R. Nanabhoy & Co. is
subject to the relevant notifications, orders, rules, circulars, etc.
issued by the Ministry of Corporate Affairs and other regulatory
authorities from time to time. The remuneration payable to M/s. R.
Nanabhoy & Co. shall be such sum not exceeding - 3,75,000 (Rupees three
lacs seventy five thousand only) plus out of pocket expenses and
applicable taxes for the aforesaid audit. The remuneration payable to
the Cost Auditors is required to be ratified subsequently by the
shareholders. Accordingly, consent of the members has been sought for
passing the resolution as set out at Item No. 6 of the Notice convening
the AGM for ratification of the remuneration payable to the Cost
Auditors for the financial year ending on March 31, 2015.
The Cost Audit Report for the financial year 2012- 13 has been filed on
September 24, 2013. The Cost Audit Report for the financial year
2013-14 will be filed on/ before the due date (i.e. within 180 days
from the close of the financial year).
14. Conservation of Energy and Technology Absorption
The Company is in the business of FM Radio Broadcasting. Hence, most
of the 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 Board of Directors) Rules, 1988, is not
applicable. However the information, as applicable, is given
hereunder:
(i) Conservation of Energy:
The operations of the Company are not energy intensive. Nevertheless,
continuous efforts such as installation of energy efficient electronic
devices, implementation of SOPs etc. aimed at reducing energy
consumption are being made by the Company and its employees to reduce
the wastage of scarce energy resources.
(ii) Technology Absorption:
- Research & Development (R & D): Foray in the Digital Space: The
Company is scaling up its digital and mobile presence in a significant
way. The Company already has an existence via 9 online radio stations.
Many of these feeds are also available on the Mobile app of Gaana. As
Value Added Service (VAS), the Company offers 17 radio feeds on a
dial-in platform which is available across telecom networks. Because of
this expertise, the Company is able to offer marketing solutions to
various brands to help them create mobile based content to reach their
consumers. - Technology absorption, adaptation and innovation: The
Company continues to use technology to augment business, productivity
and performance. The Company has implemented its Customer Relationship
Management (CRM) tool to measure and improve sales productivity. It has
embarked on its next mission to extend this tool to provide business
analytics and then onward expand it further to manage predictive
analysis.
15. Foreign Exchange Earnings & Outgo
Statement pursuant to 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:
(i) Activities relating to export, initiatives to increase exports,
developments of new export markets for products and services and export
plan:
The Company is actively exploring profitable business opportunities in
the overseas market.
16. Particulars of Employees
Particulars of the employees as required under the provisions of
Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are given in the
annexure appended hereto and forms part of this report. In terms of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report and
Accounts are being sent to all the Members excluding the aforesaid
annexure. Any Member interested in obtaining a copy of the said
annexure may write to the Company Secretary at the Registered Office of
the Company.
17. 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)
effective from February 15, 2006. Annual Listing Fee has been paid to
each exchange.
18. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is set out in a separate section forming part
of this Report.
19. Corporate Governance
The Company is adhering to good corporate governance practices in every
sphere of its operations. The Company has taken adequate steps to
comply with the applicable provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement entered into with the
Stock Exchanges. A separate report on Corporate Governance is enclosed
as a part of this Report along with the Certificate from the Practicing
Company Secretary confirming compliance with the conditions of
Corporate Governance.
20. Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and
harassment-free workplace for every individual working in the Company.
During the financial year under review, one complaint pertaining to
sexual harassment was reported to the Internal Complaints Committee of
the Company. After detailed investigation and following due procedure
under the applicable law, guidelines and regulations, the said
complaint was appropriately dealt with during the financial year under
review and appropriate action was taken.
21. Directors'' Responsibility Statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, the Directors, based on the representations received from the
operating management, hereby confirm that:
a) in the preparation of the annual accounts for the financial year
ended on March 31, 2014, the applicable accounting standards have been
followed and that there are no material departures;
b) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and have applied the suggested accounting
policies 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 for the financial year ended on March 31,
2014 and of the profit of the Company for that period;
c) they have taken proper and sufficient care 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, to the best of
their knowledge and ability;
d) they have prepared the annual accounts on a going concern basis.
22. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Company''s
wholly owned subsidiary. ABSL recorded a total income of RS. 2,286,393
during FY14. Profit after Tax stood at RS. 1,703,252.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Balance Sheet, the Profit and Loss Account (Statement of
Profit and Loss) and other documents of its subsidiary companies to the
Balance Sheet of the Company. Vide General Circular No. 2/ 2011 dated
February 8, 2011 issued by the Government of India (Ministry of
Corporate Affairs), general exemption has been granted to companies
from attaching financial statements of subsidiaries, subject to
fulfillment of conditions stated in the said circular. Accordingly, the
Balance Sheet, the Profit and Loss Account (Statement of Profit and
Loss) and other documents of the Subsidiary Company are not attached to
the
Balance Sheet of the Company. Relevant financial information of the
Subsidiary Company is disclosed in the Annual Report. The Company shall
make available the Annual Accounts and the related detailed information
of its subsidiary to any Member of the Company or its subsidiary who
may be interested in obtaining the same at any point of time. These
documents will also be available for inspection during business hours
at the Registered Office. The Consolidated Financial Statements
presented by the Company include financial results of its Subsidiary
Company. The audited financial statements, including consolidated
financial statements and all other relevant documents required to be
attached thereto are available on the website: www.enil.co.in.
23. Consolidated Financial Statements
In accordance with the Accounting Standard 21 on Consolidated Financial
Statements, the audited Consolidated Financial Statements are annexed
and form part of the Annual Report.
24. Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confidence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and cooperation and acknowledge that their efforts have enabled the
Company to achieve new heights of success.
For and on behalf of the Board of Directors
sd/-
Vineet Jain
Mumbai, May 23, 2014 Chairman
Registered Office:
Entertainment Network
(India) Limited,
CIN: L92140MH1999PLC120516,
4th Floor, A-Wing, Matulya
Centre, Senapati Bapat
Marg, Lower Parel (West),
Mumbai - 400 013.
www.enil.co.in
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting this Fourteenth Annual
Report together with the Audited Financial Statements of Entertainment
Network (India) Limited [''the Company''/ ''ENIL''/ ''Radio Mirchi''] for the
financial year ended March 31, 2013.
1. Financial Highlights
Amount in Rs.
Financial
Year Financial
Year
2012-2013 2011-2012
Income 3,553,609,049 3,129,475,246
Profit before Tax &
Exceptional item 894,443,457 797,466,918
Tax expense 217,732,607 232,371,797
Profit after Tax 676,710,850 565,095,121
Profit brought Forward 2,040,176,365 1,475,081,244
Equity 476,704,150 476,704,150
Transfer to General Reserve Nil Nil
Proposed dividend (including
dividend distribution tax) 55,772,002 Nil
Surplus carried to
Balance Sheet 2,661,115,213 2,040,176,365
2. Financial Performance
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased
from Rs. 3,129,475,246 during the previous year to Rs. 3,553,609,049 during
the year under review. Profit after tax was higher at Rs. 676,710,850.
The financial performance is discussed in detail in the Management
Discussion and Analysis Report which forms part of the Annual Report.
3. Dividend
Your Directors are pleased to recommend a dividend of Rs. 1.00 (Rupee one
only) per equity share of Rs. 10/- each for the financial year ended
March 31, 2013, aggregating Rs. 557.72 Lacs including Dividend
Distribution Tax. The dividend payment is subject to the approval of
the shareholders at the ensuing Annual General Meeting.
The Dividend, if declared at the Annual General Meeting, would be paid/
dispatched on/ after August 9, 2013 and within thirty days from the
date of declaration of dividend to those persons or their mandates:
- whose names appear as Beneficial Owners as at the end of the business
hours on July 31, 2013 in the list of the Beneficial Owners to
be furnished by the Depositories i.e. National Securities Depository
Limited [NSDL] and Central Depository Services (India) Limited [CDSL],
in respect of the shares held in electronic/ dematerialized mode; and
- whose names appear as Members in the Register of Members of the
Company as on July 31, 2013, after giving effect to valid share
transfers in physical forms lodged with the Company/ Registrar & Share
Transfer Agents, in respect of the shares held in physical mode.
4. Operations
The financial year under review was a challenging one for the entire
media industry. The slowdown in the economy, with the GDP growth
expected to be 5.5% in CY2012, affected the Indian Advertising
industry, as companies affected by the slowdown resorted to cuts in
advertising spends to maintain profit margins. The advertising industry
reported a growth of an estimated 9% during CY2012. It is important to
point out that GDP growth numbers are measured in "real" terms, while
advertising growth numbers are indicated in "nominal" terms. This
means that the growth in the advertising industry trailed the overall
GDP growth rate, something that typically happens under poor economic
growth conditions.
The radio industry has turned in a much stronger performance in FY13,
compared to the rest of the traditional media segments, growing at an
estimated 10% during the year. Your Company has reported even better
growth at 12.3%. Your Company''s strategy of developing a multiple
products portfolio (which advertisers can use for their marketing
activities) has yielded the higher growth. This led to a strong net
profit growth as well, at 19.8% to Rs. 67.7 crores. Your Company
generated Rs. 100.1 crores of cash flow during FY13. At the end of FY13,
your Company had Rs. 322.5 crores of free cash and cash equivalents.
Your Company''s revenue market share remained strong at between 33-35%
of the private FM industry.
Radio Mirchi continues to enjoy the confidence of its listeners and it
remains the clear No. 1 radio brand as per the Indian Readership Survey
(IRS)Â the only pan-India media research survey which also includes
radio listenership. According to the latest IRS survey (Q4 2012), Radio
Mirchi has a weekly listenership of 37.5 million. Our listenership is
more than 50% higher than that of the nearest competitor brand.
In recognition of the music fraternity''s exceptional creativity, your
Company organized yet another edition  the 5th  of the Mirchi Music
Award (MMA) this year. The MMAs are now held in all major languages.
Apart from the flagship Hindi, MMAs are also held in the 4 South Indian
Languages (4th edition of the awards to be held in June 2013) and
Bangla (2nd edition completed in FY13). During FY13, for the first
time, the awards were held in Marathi as well. The Hindi MMA had the
who''s who of the music and film fraternity in attendance. The TVR of
the main show, aired on Colors TV, was 2.1, a 60% improvement over last
year''s TVR. But what was even more gratifying than the TVR was the
support and presence of the entire music fraternity.
Your Company operates one of India''s most popular radio websites. We
stream four popular internet radio stations, which are available to a
worldwide audience. We also have a strong presence on social networking
sites. We have 1 million "fans" on Facebook. This helps us "connect"
with online users, get "feedback" on the brand and also "talk" to them
about our new plans.
In addition, we also operate a YouTube channel of our own (total views
upwards of 2.6 million till date) and a twitter handle (about 16000
followers). Together, Mirchi''s digital footprint spans 2.5 million
people across all its platforms.
We are pleased to share that your Company won several awards and
recognitions during the year. Radio Mirchi won the Popular Radio
Channel of the Year Award at the World Brand Congress 2012. The forum
honors the world''s branding & marketing elite at the Global Awards for
Brand Excellence. Mirchi won twelve awards at the Excellence in Radio
Awards (ERA) at the India Radio Forum (IRF) this year  the most number
of awards won by any broadcaster. Our FY 2011-12 Annual Report
"Reimagining Radio" won the gold for innovative design and layout at
the Midas awards. Midas recognizes the world''s best in financial
advertising. Founded in 2001 & based out of New York, the jury includes
creative & art directors from all over the world. In less than a year
after its launch, Radio Mirchi UAE was voted the best Radio Station in
the Popular Choice category at the 5th Annual Masala Awards held in
that country. The award demonstrates the power of the Mirchi brand and
the loyal audience that it has built there in a short period of time.
The Cabinet approved the Phase 3 expansion policy in May 2013, the
biggest growth opportunity for the private FM radio sector. Auctions
for new licenses and new cities are expected to commence before the end
of FY14. New stations should be operational within a year from the
auctions getting completed. For your Company, expanding nationally and
within the big cities is a priority. The salient features of the Phase
3 policy have been discussed in the Management Discussion and Analysis
report.
5. Fixed Deposits
The Company has not accepted any fixed deposits and, as such, no amount
of principal or interest was outstanding as on the date of the Balance
Sheet.
6. Directors
Mr. Nagesh Satyanarayan Basavanhalli (Mr. B. S. Nagesh) and Ms. Vibha
Paul Rishi were appointed as additional directors (Independent
Non-Executive Directors) by the Board of Directors
with effect from August 14, 2012 pursuant to the provisions of Section
260 of the Companies Act, 1956. They hold their office up to the date
of the forthcoming Annual General Meeting and being eligible, offer
themselves for appointment. Pursuant to the provisions of Section 257
of the Companies Act, 1956, notices in writing have been received from
a member proposing them as Directors of the Company.
Mr. Amba Preetham Parigi (Mr. A. P. Parigi) was holding the office of
''Managing Director'' on the board of the Company up to September 30,
2009. He was appointed as the Non- executive Director on the Board with
effect from October 1, 2009. Clause 49 (I)(A)(iii) of the listing
agreement contains the definition of ''independent director''. Based on
the declaration received from Mr. Parigi confirming his independent
directorship as per the Clause 49 (I)(A)(iii) of the listing agreement,
the Board of Directors considered him as an independent director with
effect from April 1, 2013.
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Mr. Amba Preetham Parigi
(Mr. A. P. Parigi) and Mr. Narayanan Kumar (Mr. N. Kumar) retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment.
Brief resume of the Directors proposed to be appointed/ reappointed,
nature of their expertise in specific functional areas, names of the
companies in which they hold directorships and the memberships/
chairmanships of Committees of the Board and their shareholding in the
Company, as stipulated under Clause 49 of the Listing Agreement entered
into with the Stock Exchanges, are set out in the Annexure to the
Notice forming part of the Annual Report.
7. Audit Committee
The Audit Committee of the Company presently comprises of Mr. N. Kumar
(Chairman), Mr. Ravindra Dhariwal, Mr. Ravindra Kulkarni and Mr.
Richard Saldanha. The Internal Auditors of the Company 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.
8. Auditors
Messrs Price Waterhouse & Co., Bangalore, Chartered Accountants (Firm
Registration Number 007567S), the Statutory Auditors of the Company
retire at the conclusion of the Fourteenth Annual General Meeting and
have confirmed their eligibility and willingness to accept office, if
appointed.
Members are requested to appoint Messrs Price Waterhouse & Co.,
Bangalore, Chartered Accountants, as the Statutory Auditors of the
Company for the period commencing from the conclusion of the Fourteenth
Annual General Meeting until the conclusion of the Fifteenth Annual
General Meeting and to fix their remuneration.
9. Cost Auditor
The Company is required to comply with the relevant provisions of the
Cost Accounting Records (Telecommunication Industry) Rules 2011, dated
December 7, 2011. The Company had appointed M/s. R. Nanabhoy & Co.,
Cost Accountants as the Cost Auditor for the financial years 2012-2013
and 2013-2014 pursuant to the provisions of Section 233B and other
applicable provisions of the Companies Act, 1956 read with the relevant
notifications, orders, rules, circulars, etc. issued by the Ministry of
Corporate Affairs for audit of cost records/ cost accounts. The Cost
Audit Report for the financial year 2012-13 will be filed on/ before
the due date (i.e. within 180 days from the close of the financial
year).
10. Buy-Back of Shares
During the financial year under review, the Company has not offered to
buy-back any of its outstanding shares.
11. Conservation of Energy and Technology Absorption
The Company is in the business of FM Radio Broadcasting. Hence, most of
the 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 Board of Directors) Rules, 1988, is not applicable.
However the information, as applicable, is given hereunder:
(i) Conservation of Energy:
The operations of the Company are not energy intensive. Nevertheless,
continuous
efforts are being made by the Company and its employees to reduce the
wastage of scarce energy resources.
(ii) Technology Absorption:
The Company continues to use technology to augment business,
productivity and performance. The Company is currently expanding and
improving the scope of Sales Automation through CRM (Customer
Relationship Management) to increase adoption and sales productivity.
(iii) Research & Development:
The Company is scaling up its digital and mobile presence in a
significant way. The Company already streams 4 music feeds through
Gaana.com platform. In mobile space, the Company offers 17 radio feeds
on a dial-in IVR platform which is available across telecom networks.
12. Foreign Exchange Earnings & Outgo
Statement pursuant to 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:
(i) Activities relating to export, initiatives to increase exports,
developments of new export markets for products and services and export
plan:
The Company is actively exploring profitable business opportunities in
the overseas market.
(ii) Total foreign exchange earned and used:
Amount in Rs.
Financial Year Financial Year
2012-2013 2011-2012
Foreign exchange
earnings 37,468,375 13,164,105
Foreign exchange
outgo 8,266,554 8,122,585
13. Particulars of Employees
Particulars of the employees as required under the provisions of
Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are given in the
annexure appended hereto and forms part of this report. In terms of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report and
Accounts are being sent to all the Members excluding the aforesaid
annexure. Any Member interested in obtaining a copy of the said
annexure may write to the Company Secretary at the Registered Office of
the Company.
14. 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)
effective from February 15, 2006. Annual Listing Fee has been paid to
each exchange.
15. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is set out in a separate section forming part
of the Annual Report.
16. Corporate Governance
The Company is adhering to good corporate governance practices in every
sphere of its operations. The Company has taken adequate steps to
comply with the applicable provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement entered into with the
Stock Exchanges. A separate report on Corporate Governance is enclosed
as a part of the Annual Report along with the Certificate from the
Practicing Company Secretary confirming compliance with the conditions
of Corporate Governance. Observation of the Practicing Company
Secretary in the aforesaid Certificate has been adequately dealt with
in the report on Corporate Governance, which forms part of the Annual
Report.
17. Directors'' Responsibility Statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, the Directors, based on the representations received from the
Operating Management, hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
(ii) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and have applied the suggested accounting
policies 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 for the financial year ended on March 31,
2013 and of the profit of the Company for that period;
(iii) they have taken proper and sufficient care 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, to the best of
their knowledge and ability;
(iv) they have prepared the annual accounts on a going concern basis.
18. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Company''s
wholly owned subsidiary. ABSL recorded a total income of Rs. 2.3 crores
during FY13. Profit after Tax stood at Rs. 0.6 crores.
The Board of Directors of the Company, at their meeting held on August
13, 2012, approved the purchase of ABSL''s Intellectual Property Rights
Events Business (''IPR Business'') as a going concern. The slump sale of
the IPR Business by ABSL to the Company was effected through a Business
Transfer Agreement (''BTA''). The transfer was effective from July 1,
2012.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Balance Sheet, the Profit and Loss Account (Statement of
Profit and Loss) and other documents of its subsidiary companies to the
Balance Sheet of the Company. Vide General Circular No. 2/ 2011 dated
February 8, 2011 issued by the Government of India (Ministry of
Corporate Affairs), general exemption has been granted to companies
from attaching financial statements of subsidiaries, subject to
fulfillment of conditions stated in the said circular. Accordingly, the
Balance Sheet, the Profit and Loss Account (Statement of Profit and
Loss) and other documents of the Subsidiary Company are not attached to
the Balance Sheet of the Company.
Relevant financial information of the Subsidiary Company is disclosed
in the Annual Report. The Company shall make available the Annual
Accounts and the related detailed information of its subsidiary to any
Member of the Company or its subsidiary who may be interested in
obtaining the same at any point of time. These documents will also be
available for inspection during business hours at the Registered
Office. The Consolidated Financial Statements presented by the Company
include financial results of its subsidiary company.
19. Consolidated Financial Statements
In accordance with the Accounting Standard 21 on Consolidated Financial
Statements, the audited Consolidated Financial Statements are annexed
and form part of the Annual Report.
20. Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confidence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and cooperation and acknowledge that their efforts have enabled the
Company to achieve new heights of success.
For and on behalf of the Board of Directors
sd/-
Vineet Jain
Chairman
Mumbai, May 17, 2013
Registered Office:
4th Floor, A-Wing,
Matulya Centre,
Senapati Bapat Marg,
Lower Parel
(West), Mumbai - 400 013.
Mar 31, 2012
The Directors have pleasure in presenting this Thirteenth Annual
Report together with the Audited Accounts of the Company "ENIL"] for
the financial year ended March 31, 2012.
I. Financial Highlights
Amount in Rs
Financial Year Financial Year
2011-2012 2010-2011
Income 3,129,475,246 2,846,848,316
Profit before Tax &
Exceptional item 797,466,918 609,734,330
Profit on sale of Long
Term Investment - 126,848,239
Tax expense 232,371,797 214,493,272
Profit after Tax 565,095,121 522,089,297
Profit brought Forward 1,475,081,244 952,991,947
Equity 476,704,150 476,704,150
Transfer to General Reserve - -
Surplus carried to
Balance Sheet 2,040,176,365 1,475,081,244
1. Financial Performance
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased from
Rs 2,846,848,316 during the previous year to Rs 3,129,475,246 during the
year under review. Profit after tax was higher at Rs 565,095,121. The
performance is discussed in detail in the Management Discussion and
Analysis Report which forms part of the Annual Report: '
2. Operations
The year has been a challenging one for the media industry. The
slowdown in the economy with the GDP growth at 6.1% in the 3rd quarter
of FY12 and the uncertainty about any recovery happening soon has lead
to advertisers curtailing or deferring ad spends. This has impacted
your Company as well. ENIL's total income grew by a modest 9.9% this
year to Rs 312.9 crs. Your Company's EBITDA grew by 17,3% and crossed
the Rs 112.2 crs. milestone for the first time. Your Company's net
profit stood atRs 56.5 crs., a growth of 43.0% (without exceptional
items). In these trying times, your Company has maintained its revenue
market share amongst private broadcasters at 33-35%.
The challenging conditions motivated your Company to focus on
developing more innovative sales propositions and go-to market
solutions for the advertisers. Your Company significantly ease us
in union building so as to keep the listenership lead
intact. Your Company has maintained its leadership in listenership this
year as well. ENIL remained the number one brand in each of the
quarterly IRS reports of the year. It also showed strong results in
research conducted by RAM (Radio Audience Measurement).
You will be happy to know that your Company was recognized by FICCI,
for the third continuous year, as the most successful radio company of
the year. The strength of the Radio Mirchi brand and the prowess of its
programming and marketing teams were also recognized at the Excellence
in Radio Advertising (ERA) awards function at this year's India Radio
Forum (IRF), where ENIL received the maximum number of awards. Your
Company also received several other awards during the year, in
recognition of its strong performance.
During the year, your Company entered the UAE through a tie-up with the
Abu Dhabi Media Company (ADMC). Radio Mirchi can now be heard in Dubai,
Al Ain, Abu Dhabi and the other emirates in the UAE. The initial
reports from the UAE are very encouraging. As always, we are committed
to providing the best entertainment to our listeners, wherever they are
present.
Your Company made progress on the Digital side of the business also. As
you know, the internet is fast expanding its presence in India with
more than 120 million Indians using it for emails, social networking,
e-commerce, entertainment, etc. This number is expected to grow to
more than 300 million in the next 2-3 years. Keeping this in mind, your
Company has made Digital very much a part of its overall programming
and business strategy. Your Company launched two internet radio
stations - Purani Jeans and Meethi Mirchi. You may access them on
www.radiomirchi.com. Your Company also expanded the Mirchi Mobile
service by adding a Bhojpuri radio feed created especially for the
mobile platform.
Your Company continued its support to and appreciation of the highly
creative music fraternity this year also. This year, we had , an even
bigger Hindi Mirchi Music Awards (MMA) function. In its 4th year, the
awards saw even higher participation from the music fraternity. We feel
proud that through these awards, your Company is giving the artists the
true respect they deserve. We extended this reverence to the music
fraternity in the four southern states two years back. This year, we
launched the first edition of the Bangla Mirchi Music Awards.
Your Company is confident about the future. This confidence comes from
recognizing the challenges that lie ahead, identifying the continuous
changes in listener tastes and remaining sensitive to advertisers'
needs. This confidence comes from constantly directing our efforts and
resources towards creating a stronger, digitally robust and
continuously innovating brand.
After getting unexpectedly delayed in FY12, we are hopeful that the
Phase 3 policy will move ahead in FY13 with the auctioning process
expected to begin in FY13. Phase 3 is an exciting opportunity for your
Company to grow. The management has prepared detailed plans for
participation in the auctions and the Directors of your Company are
guiding management in the making of these plans.
4. Divided
In order to conserve the resources for future growth, your Directors do
not recommend any dividend for the financial year 2011-2012.
5. Fixed Deposits
The Company has not accepted any fixed deposits and, as such, no amount
of principal or interest was outstanding as on the date of the Balance
Sheet.
6. Director!'
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Mr. Vineet Jain and Mr.
Ravindra Kulkarni retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for re-appointment.
Brief resume of the Directors proposed to be re-appointed, nature of
their expertise in specific functional areas, names of the companies in
which they hold directorships and the memberships / chairmanships of
Committees of the Board and their shareholding in the Company, as
stipulated under Clause 49 of the Listing Agreement entered into with
the Stock Exchanges, are set out in the Annexure to the Notice forming
part of the Annual Report.
7. Audit Committee
The Audit Committee of the Company presently comprises Mr. N. Kumar
(Chairman), Mr. Ravindra Dhariwal, Mr. Ravindra Kulkarni and Mr.
Richard Saldanha. The Internal Auditors of the Company 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.
8. Auditors
Messrs Price Waterhouse & Co., Chartered Accountants, the Statutory
Auditors of the Company retire at the conclusion of the Thirteenth
Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if appointed. '
Members are requested to appoint Messrs Price Waterhouse & Co.',
Chartered Accountants, as the Statutory Auditors of the Company for the
period commencing from the conclusion of the Thirteenth Annual General
Meeting until the conclusion of the Fourteenth Annual General Meeting
and to fix their remuneration.
9. Cost Auditor
The Company is required to comply with the relevant provisions of the
Cost Accounting Records (Telecommunication Industry) Rules 2011,
notified on December 7, 2011. Effective date of implementation of the
aforesaid Rules is April 1, 2012. The Company is in the process of
appointing the Cost Auditor as per the General Circular No. 15/ 2011
dated April 11, 2011 issued by the Ministry of Corporate Affairs, Cost
Audit Branch, read with the Companies (Cost Audit Report) Rules, 2011
for cost audit of the cost records. The cost audit requirements of the
cost records of the Company will be applicable from the financial year
2012-2013 onwards.
10. Buy-Back of Shares
During the financial year under review, the Company has not offered to
buy-back any of its outstanding shares.
11. Conservation of Energy cl Technology Absorption
The Company is in the business of FM Radio Broadcasting. Hence, most
of the 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 Board of Directors) Rules, 1988, is not
applicable.
However the information, as applicable, is given hereunder:
(i) Conservation of Energy:
The operations of the Company are not energy intensive.
Nevertheless, continuous efforts are being made by the
Company and its employees to reduce the wastage of scarce energy
resources.
(ii) Technology Absorption:
Whenever there is requirement, the Company evaluates the best
technology available globally for improving the ' productivity and
quality of its operations.
The Company is currently implementing Customer
- Relationship Management (CRM) by leveraging the existing SAP
landscape to improve process control and sales efficiency. This will
not only help the current 32 radio stations, but will also aid the
future expansion.
(iii) Research & Development:
The Company is scaling up its digital and mobile presence in a
significant way. The Company already streams 2 music feeds through
Gaana.com platform. In mobile space, the Company offers 15 radio feeds
on a dial-in IVR platform
. which is available across telecom networks. .
12. Foreign:
Statement pursuant to 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:
(i) Activities relating to export, initiatives to increase exports,
developments of new export markets for products and . services and
export plan:
The Company is actively exploring profitable business opportunities in
the overseas market.
(ii) -Total foreign exchange earned and used:
Amount in Rs
Financial Yieal Financial Year
2011-2012 2010-2011
Foreign exchange earnings 13,164,105 -
Foreign exchange outgo 8,122,585 7,454,160
13. Particulars of Employ
Particulars of the employees as required under the provisions of
Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are given in the
annexure appended hereto and forms part of this report. In terms of
Section 219(1) (b)(iv) of the Companies Act, 1956, the Annual Report
and Accounts are being sent to all the Members excluding the aforesaid
annexure. Any Member interested in obtaining a copy of the said
annexure may write to the Company Secretary at the Registered Office of
the Company.
14. 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)
effective from February 15, 2006. Annual Listing Fee has been paid to
each exchange.
15. Management Discussion and Analysis Report:
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is set out in a separate section forming part
of the Annual Report.
16 Corporate Government
The Company is adhering to good corporate governance practices in every
sphere of its operations. The Company has taken adequate steps to
comply with the applicable provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement entered into with the
Stock Exchanges. A separate report on Corporate Governance is enclosed
as a part of the Annual Report along with the Certificate from the
Practicing Company Secretary confirming compliance with the conditions
of Corporate Governance. Observation of the
Practicing Company Secretary in the aforesaid Certificate has been
adequately dealt with in the report on Corporate Governance, which
forms part of the Annual Report.
17. Directors' Responsibility Statement:
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, the Directors, based on the representations received from the
Operating Management, hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
(ii) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and have applied the suggested accounting
policies 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 for the financial year ended on March 31,
2012 and of the profit of the Company for that period;
(iii) they have taken proper and sufficient care 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, to the best of
their knowledge and ability;
(iv) they have prepared the annual accounts on a going concern basis.
18. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is engaged in the
business of events. ABSL classifies events into two types- ' Managed
Events in which ABSL manages its clients' events on their behalf and
IPR (Intellectual Property Rights) events in which ABSL builds its own
event brands.
During the year, ABSL decided not to carry out Managed Events on
account of poor margins and excessive competition from the unorganized
sector. Consequently, the results of this year are not comparable with
those of the previous years. The total income recorded by ABSL during
FY12 was Rs 11.2 crs. with an EBITDA loss of Rs 0.3 crs. ABSL ensured
that its receivables position was handled satisfactorily.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Balance Sheet, the Profit and Loss Account (Statement of
Profit and Loss) and other documents of its subsidiary companies to the
Balance Sheet of the Company. Vide General Circular No. 2/ 2011 dated
February 8, 2011 issued by the Government of India (Ministry of
Corporate Affairs), general exemption has been granted to companies
from attaching financial statements of subsidiaries, subject to
fulfillment of conditions stated in the said circular. Accordingly, the
Balance Sheet, the Profit and Loss Account (Statement of Profit and
Loss) and other documents of the Subsidiary Company are not attached to
the Balance Sheet of the Company.
Relevant financial information of the Subsidiary Company is disclosed
in the Annual Report. The Company shall make available the Annual
Accounts and the related detailed information of its subsidiary to any
Member of the Company or its subsidiary who may be interested in
obtaining the same at any point of time. These documents will also be
available for inspection during business hours at the Registered
Office. The Consolidated Financial Statements presented by the Company
include financial results of its subsidiary companies.
19. Consolidated Financial r: lnaccordancewiththeAccountingStandard21
on Consolidated Financial Statements, the audited Consolidated
Financial Statements are annexed and form part of the Annual Report.
20, Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confidence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and cooperation and acknowledge that their efforts have enabled the
Company to achieve new heights of success.
For and on behalf of the Board of Directors
Vineet Jain
Mumbai, May 25, 2012 Chairman
Registered Office:
4th Floor, 'A' Wing, Matulya Centre,
Senapati Bapat Marg,
Lower Parel (West),
Mumbai-400 013.
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting this Twelfith Annual Report
together with the Audited Accounts of the Company for the financial
year ended March 31, 2011.
1. Financial Highlights
Amount in Rupees
Financial year Financial year
2010 - 2011 2009 - 2010
Income 2,835,665,618 2,311,850,421
Profit before Tax & Exceptional item 609,734,330 182,748,146
Profit on sale of Subsidiary 126,848,239 Ã
Tax Expenses 214,493,272 4,079,063
Profit afiter Tax 522,089,297 178,669,083
Profit brought Forward 952,991,947 774,322,864
Equity 476,704,150 476,704,150
Transfer to General Reserve à Ã
Surplus carried to Balance Sheet 1,475,081,244 952,991,947
2. Financial Performance
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased from
Rs. 2,311,850,421 during the previous year to Rs. 2,835,665,618 during
the year under review. Profit afiter tax was higher at Rs. 522,089,297.
The performance is discussed in detail in the Management Discussion and
Analysis Report which forms part of the Annual Report.
3. Operations
This year saw the world economy coming back on track. The IMF reported
that world economy grew at 5% in 2010 and is likely to grow at 4.5% in
2011 and 2012. The world advertising market also came back on the
growth path with Zenith Optimedia reporting that the world ad market
grew by 5.5% in 2010. The momentum is expected to continue and the
growth is expected to be 4.2%, 5.8% and 5.5% in 2011,
2012 and 2013 respectively. The Indian economy, which was not adversely
affected by the global downturn has also recovered and is expected to
have grown 8% this year according to RBI estimates. The Indian
advertising Industry which is directly dependent on the overall economy
also had an impressive growth of nearly 17% this year. It is further
expected to grow at 13% till 2015.
The overall recovery has had a positive impact on your Company's
revenue performance. The Company's total income grew by nearly 23%
during the year under review.
Your Company continued to keep a keen eye on costs and increasing the
overall productivity of the Company. We are committed to maintaining a
lean and smart operation. There is also a great deal of focus in
keeping the culture of the Company vibrant and meritocratic so that
talent is retained in the Company.
Phase III of radio expansion has been pending for quite a while now and
is expected finally to be announced in the next few months. Your
Company is gearing up to face the challenges and tap the opportunities
that Phase III would throw at us. With the sale of the Company's entire
equity stake in Times Innovative Media Limited (erstwhile subsidiary of
the Company- engaged in the 'Out Of Home Media business'), your Company
has ensured that it is not burdened by the capital requirements of 'Out
Of Home Media business' and is able to garner resources and funds for
the expansion plans of the radio business in Phase III.
Your Company has benefited from some other important developments of
this year. The Hon'ble Copyright Board passed an order this year which
would cap the overall royalty payout by Radio broadcasters to music
providers at 2% of the revenues of the broadcaster. This will have a
positive impact on your Company's profitability. Many music providers
have challenged this order and the final verdicts on all these appeals
are expected in due course of time. The Interim appeals were challenged
in the Hon'ble Supreme Court and the Hon'ble Supreme Court has refused
to stay the said Copyright Board's order. We are confdent that the
orders of the Hon'ble Copyright Board would continue to be upheld as it
has been arrived at afiter an elaborate and exhaustive hearings.
Your Company has continued its focus on strengthening its brand this
year as well. Radio Mirchi continued to be the leader in 3 (Mumbai,
Delhi and Kolkata) - out of the 4 RAM markets. While its lead has been
challenged on some occasions, we are confdent that we would attain a
consistent leadership position in these markets. We continue to be a
very close second in Bangalore and actually got to the leadership
position on a few occasions.
Your Company once again achieved the leadership position in the only
PAN India measurement of Radio through the IRS (Indian Readership
Survey). The survey recorded Radio Mirchi's listenership at 41.2 mn,
which is significantly higher than the next radio brand.
Your Company is very aware of the challenges and benefits that the
increasing proliferation of digitization is introducing. We have made
good progress on both the mobile and web platforms. Your Company had
launched a mobile VAS product à Mirchi Mobile earlier this year, which
has seen reasonable success. We are committed to making the brand a
significant entity in the digital space as well and are working on
creating processes which help create synergy between our on-air content
and digital content.
Your Company hosted the 3rd edition of the Mirchi Music awards this
year. This tribute to the music fraternity Ãthe artists, composers,
lyricists - grew even bigger this year with the introduction of new
categories of awards and an increased support from the fraternity
itself. We will continue to making this award more successful and
bigger in scale in the coming years.
Your Company was awarded with many honors this year. The most
prestigious of them was being declared the most successful radio
channel of the year by FICCI. We have been conferred this award two
years in a row and are the only radio company to have received this
award till date. The morning show of Delhi was awarded a Silver at the
New York Festival awards this year in the category of Best Human Story.
Radio Mirchi was also awarded the Power Brand of India in the
Entertainment category by Planman consulting. We were the only radio
station to have been bestowed with this honor. Some of the other media
brands which were honored were Times of India, NDTV and Star Plus.
Your Company is excited about the opportunities that the future holds.
An economy that is growing, a sense of optimism amongst the
advertisers, Phase III of FM radio expansion, a good year behind us Ã
all of this gives us confdence that we will be able to meet your
expectations in the next year. We are, as always, committed to creating
value for the business, the industry and above all you.
4. Dividend
In order to conserve the resources to augment future growth, your
Directors do not recommend any dividend for the financial year 2010 -
2011.
5. Fixed Deposits
The Company has not accepted any fixed deposits and, as such, no amount
of principal or interest was outstanding as on the date of the Balance
Sheet.
6. Directors
Mr. Richard Saldanha was appointed as an Additional Director
(Independent Non-Executive Director), with effect from November 23,
2010 pursuant to the provisions of Section 260 of the Companies Act,
1956. Accordingly, Mr. Saldanha holds office up to the date of the
forthcoming Annual General Meeting and being eligible, offers himself
for appointment. Pursuant to the provisions of Section 257 of the
Companies Act, 1956, a notice in writing has been received from a
Member proposing Mr. Saldanha as a Director of the Company.
Mr. Deepak M. Satwalekar (Independent Non-Executive Director) resigned
from the Board of Directors of the Company effective from March 30,
2011. The Board of Directors wishes to place on record their
appreciation for the valuable services rendered by Mr. Satwalekar
during his tenure.
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Mr. N. Kumar and Mr.
Ravindra Dhariwal retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for re-appointment.
Brief resume of the Directors proposed to be appointed, nature of their
expertise in specific functional areas, names of the companies in which
they hold directorships and the memberships / chairmanships of
Committees of the Board and their shareholding in the Company, as
stipulated under the Clause 49 of the Listing Agreement entered into
with the Stock Exchanges, are set out in the Annexure to the Notice
forming part of the Annual Report.
7. Audit Committee
The Audit Committee of the Company presently comprises Mr. N. Kumar
(Chairman), Mr. Ravindra Dhariwal, Mr. Ravindra Kulkarni and Mr.
Richard Saldanha. The Internal Auditors of the Company 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.
8. Auditors
Messrs Price Waterhouse & Co., Chartered Accountants, the Statutory
Auditors of the Company retire at the conclusion of the Twelfith Annual
General Meeting and have confirmed their eligibility and willingness to
accept office, if appointed.
Members are requested to appoint Messrs Price Waterhouse & Co.,
Chartered Accountants, as the Statutory Auditors of the Company for the
period commencing from the conclusion of the Twelfith Annual General
Meeting until the conclusion of the Thirteenth Annual General Meeting
and to fix their remuneration.
9. Buy-Back of Shares
During the financial year under review, the Company has not offered to
buy-back any of its outstanding shares.
10. Conservation of Energy
The operations of the Company are not energy intensive. Nevertheless,
continuous efforts are being made by the Company and its employees to
reduce the wastage of scarce energy resources.
11. Foreign Exchange Earnings & Outgo
Statement pursuant to 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:
(i) Activities relating to export, initiatives to increase exports,
developments of new export markets for products and services and export
plan:
The Company is actively exploring profitable business opportunities in
the export market.
(ii) Total foreign exchange earned and used:
Amount in Rupees
Financial Year Financial Year
2010 - 2011 2009 Ã 2010
Foreign exchange earnings à Ã
Foreign exchange outgo 7,454,160 2,263,137
12. Technological Absorption, Adaptation and Innovation
Statement pursuant to 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 hereunder:
a) Efforts made towards technology absorption,
adaptation and innovation N.A.
b) Benefits derived as a result of the above efforts N.A.
c) Information regarding imported technology N.A.
13. Research & Development
a) Specific areas in which Research and Development
is carried out by the Company N.A.
b) Benefits derived as a result of the above research
and development N.A.
c) Future plan of action N.A.
d) Expenditure on Research and Development N.A.
14. Particulars of Employees
Particulars of the employees as required under the provisions of
Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are given in the
annexure appended hereto and forms part of this report. In terms of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report and
Accounts are being sent to all the Members excluding the aforesaid
annexure. Any Member interested in obtaining a copy of the said
annexure may write to the Company Secretary at the Registered Office of
the Company.
15. Share Capital & Listing of Securities
The equity shares of the Company are listed and admitted to dealings on
Bombay Stock Exchange Limited (BSE) and National Stock Exchange of
India Limited (NSE) effective from February 15, 2006. Annual Listing
Fee has been paid to each exchange.
16. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is set out in a separate section forming part
of the Annual Report.
17. Corporate Governance
The Company is adhering to good Corporate Governance practices in every
sphere of its operations. The Company has taken adequate steps to
comply with the applicable provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreements entered into with the
Stock Exchanges. A separate report on Corporate Governance is enclosed
as a part of the Annual Report along with the Certificate from a
practicing company secretary confirming compliance with the conditions
of Corporate Governance. Observations of the practicing Company
Secretary in the aforesaid Certificate has been adequately dealt with in
the report on Corporate Governance, which forms part of the Annual
Report.
18. Directors' Responsibility Statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, the Directors, based on the representations received from the
Operating Management, hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
(ii) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and have applied the suggested accounting
policies 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 for the financial year ended on March 31, 2011
and of the profit of the Company for that period;
(iii) they have taken proper and sufficient care 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, to the best of
their knowledge and ability;
(iv) they have prepared the annual accounts on a going concern basis.
19. Subsidiary Companies
Alternate Brand Solutions (India) Limited is engaged in the business of
event management/ experiential marketing under the brand and style
'360ð'.
On December 29, 2010, the Company sold its entire equity stake of 83.44
% in Times Innovative Media Limited ['TIM'] to Bennett, Coleman &
Company Limited ['BCCL']. BCCL is the parent company of the Company
('ENIL'). Consequent to the sale, TIM ceased to be a subsidiary of the
Company with effect from December 30, 2010.
Based on the outstanding debt in the Balance Sheet of TIM as on the
date of the consummation of the transaction, the enterprise value for
the sale amounted to Rs. 130.4 crores. Pursuant to the sale, ENIL
received a cash consideration of Rs. 45 crores for its equity
investment of Rs. 32 crores in TIM. Further, it also received full
repayment for the loans advanced to TIM and amounting to Rs. 58 crores
as on the date of the consummation of transaction. The resultant cash
infows helped ENIL retire its entire debt and build sizeable cash
reserves for the upcoming Phase III expansion. The sale also relieved
ENIL from the burden of meeting the sizeable funding requirements of
TIM. BCCL also assumed all the obligations and liabilities under the
guarantees provided by ENIL on account of TIM.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Balance Sheet, Profit and Loss Account and other documents
of its subsidiary companies to the Balance Sheet of the Company.
Pursuant to the approval from the Government of India, Ministry of
Corporate Affairs vide their letter No. 47/51/2011-CL-III dated
February 1, 2011, the Balance Sheet, Profit and Loss Account and other
documents of the Subsidiary Company are not attached to the Balance
Sheet of the Company. Further it may also be noted that vide General
Circular No. 2/ 2011 dated February 8, 2011 issued by the Government of
India (Ministry of Corporate Affairs), general exemption has been
granted to companies from attaching financial statements of
subsidiaries, subject to fulfillment of conditions stated in the said
circular.
Relevant financial information of the Subsidiary Company is disclosed in
the Annual Report. The Company shall make available the Annual Accounts
and the related detailed information of its subsidiary to any Member of
the Company or its subsidiary who may be interested in obtaining the
same at any point of time. These documents will also be available for
inspection during business hours at the Registered Office. The
Consolidated Financial Statements presented by the Company include
financial results of its subsidiary companies.
20. Consolidated Financial Statements
In accordance with the Accounting Standard 21 on Consolidated Financial
Statements, the audited Consolidated Financial Statements are annexed
and form part of the Annual Report.
21. Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confdence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and cooperation and acknowledge that their efforts have enabled the
Company to achieve new heights of success.
For and on behalf of the Board of Directors
Vineet Jain
Mumbai, May 23, 2011 Chairman
Registered Office:
4th Floor, 'A' Wing, Matulya Centre,
Senapati Bapat Marg, Lower Pare (West),
Mumbai à 400 013.
Mar 31, 2010
The Directors have pleasure in presenting this Eleventh Annual Report
together with the Audited Accounts of the Company for the fnancial year
ended March 31, 2010.
1. Financial Highlights
Amount in Rupees
Financial year Financial year
2009-2010 2008-2009
Income 2,311,850,421 2,301,738,144
Proft before Tax 182,748,146 19,602,137
Less: Provision for Taxation
Current Tax 57,400,000 _
Minimum Alternate Tax Credit
Entitlement (57,400,000) _
Deferred Tax 5,050,278 (29,720,970)
Fringe Beneft Tax (971,215) 20,200,000
Proft after Tax 178,669,083 29,123,107
Proft brought Forward 774,322,864 745,199,757
Equity 476,704,150 476,704,150
Transfer to General Reserve _ _
Surplus carried to Balance Sheet 952,991,947 774,322,864
2. Financial Performance
Your Company retained its position as the market leader in Private FM
Radio Broadcasting Industry. Total income of the Company increased from
Rs.2,301,738,144/- in the year 2008-2009 to Rs.2,311,850,421/- in the
fnancial year under review. Proft after tax was higher at
Rs.178,669,083/-.
3. Operations
The Financial Year 2009-2010 was a very diffcult period. Your Company
too, faced several challenges such as a very badly hit advertising
sector, managing costs to counter the effects of the revenue slow-down,
managing the team morale etc. At the same time, there were other
challenges to manage à the Copyright amendments, the Phase III policy
and the Music Royalty related legal issues.
Revenue growth was fat compared to the previous year. While this may
look unsatisfactory at frst glance, it is in line with the results of
most major broadcasters in the Financial Year 2009-2010. As per Madison
Media, the overall advertising industry de-grew by nearly 10 % in
calendar year 2009. The ad industry had not seen this kind of a
down-turn in the last several years. Your Company has coped with the
situation reasonably well. By keeping a tight control on costs à in a
business where costs are very diffcult to control à your Company has
delivered a strong 43% growth in Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) levels (on a like to like
basis). Due to the change in the terms of the Media Collaboration
arrangement with Bennett, Coleman & Company Limited for Private
Treaties business, the reported EBITDA growth was lower at 18%. Thus,
in the fnal analysis, we believe that the Company has done reasonably
well during the trying condition of the year that has gone by.
Management of costs has focused on a few crucial areas namely, reducing
head-count down from a peak of 980 to 711, managing payroll costs by
cutting down on incentive pay, drastically reducing General and
Administrative expenses by reducing travel costs and others, reducing
cost of operations by shutting down night time operations of the
smaller stations, reducing marketing spends while keeping share of
voice intact and reducing dependence on the Private Treaties business.
All of these have resulted in a signifcant savings in costs à your
Company plans to retain this tight control on costs in the Financial
Year 2010-2011 as well.
While the year has been very bad for the ad industry, the ensuing year
is expected to show a good recovery. Industry experts are of the
opinion that the ad industry could grow by 11%-14% in the Financial
Year 2010-2011. This is still lower than the growth rates in the period
prior to the Financial Year 2008-2009. It may take another year for the
growth rates to go back to the 16%-18% level, but there is a strong
belief that the growth rates will be back for sure. The long term
growth estimates remain intact.
Your Company is also looking forward to the Phase III policy that the
government is likely to announce soon. Your Company, along with other
radio broadcasters, has raised certain issues with the government à if
the government were to accept those requests, then the overall radio
industry could become proftable. Your Company, of course, has been
proftable since its listing in 2006. The Company is keeping a close eye
on developments in this feld and will decide on a suitable strategy to
handle the opportunities that emerge.
Your Company is also keeping an eye on developments in the areas of
music royalty and copyright amendments. The Company has always backed
the moral rights of artists à the real maestros of the industry. At the
same time, the Company has always demanded a fair royalty regime à in
line with global practices. To that extent, the Company is continuing
its efforts to fnd an acceptable solution to the royalty issue.
Your Company has kept its focus on building brand ÃMirchià during the
year under review. As a result of this focused approach, the CompanyÃs
Mumbai station has been unanimously declared the leader in the Mumbai
market. The industryÃs defnitive research ÃRadio Audience Measurement
(RAM) Ã has declared Mirchi the No. 1 radio brand in the fnancial
capital of India since May 2009. The other research standard in the
advertising industry à the Indian Readership Survey (IRS) à has
consistently rated Mirchi as the No. 1 brand in Mumbai. The latest
round of IRS also rates Mirchi as the leader in 25 of its 32 stations,
a feat unrivaled by any media brand.
During the year, your Company was endowed with several awards. Radio
Mirchi was awarded the ÃMost successful radio channelà by FICCI. The
Global Youth Marketing Forum gave it the ÃMost popular radio channel
among the youthà award. Mirchi also got the CMO Council Brand
Leadership Award. Apart from this, there were several wins for the
Mirchi programming team in the India Radio Forum (IRF) and the Ad clubs
across India.
At the end of the fnancial year under review, your Company stands in a
position of strength. The Radio Business is net debt- free. It is
awaiting the fresh opportunities that Phase III will unfold. Its
management team is raring to go. Your interests have always been
paramount à that will never change!
4. Dividend
In order to conserve the resources to augment future growth, your
Directors do not recommend any dividend for the fnancial year 2009 -
2010.
5. Fixed Deposits
The Company has not accepted any fxed deposits and, as such, no amount
of principal or interest was outstanding as on the date of the Balance
Sheet.
6. Directors
Mr. A. P. Parigi was holding the offce of Managing Director of the
Company till September 30, 2009. The Board of Directors wishes to place
on record the appreciation of the valuable services rendered by Mr.
Parigi to the Company and its subsidiaries.
Mr. A. P. Parigi was appointed as an Additional Director (Non-
Executive Director), with effect from October 1, 2009 pursuant to the
provisions of Section 260 of the Companies Act, 1956. Accordingly Mr.
Parigi holds offce up to the date of the forthcoming Annual General
Meeting and being eligible, offers himself for appointment. Pursuant to
the provisions of Section 257 of the Companies Act, 1956, a notice in
writing has been received from a Member proposing Mr. Parigi as a
Director of the Company.
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Mr. Ravindra Kulkarni and
Mr. Deepak M. Satwalekar retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment.
Brief resume of the Directors proposed to be appointed, nature of their
expertise in specifc functional areas, names of the companies in which
they hold directorships and the membership / chairmanships of
Committees of the Board and their shareholding in the Company, as
stipulated under Clause 49 of the Listing Agreement entered into with
the Stock Exchanges, are set out in the Annexure to the Notice forming
part of the Annual Report.
7. Audit Committee
The Audit Committee of the Company presently comprises of Mr. N. Kumar
(Chairman), Mr. Ravindra Kulkarni and Mr. Ravindra Dhariwal. The
Internal Auditors of the Company 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.
8. Auditors
Messrs Price Waterhouse & Co., Chartered Accountants, the Statutory
Auditors of the Company retire at the conclusion of the Eleventh Annual
General Meeting and have confrmed their eligibility and willingness to
accept offce, if appointed.
Members are requested to appoint Messrs Price Waterhouse & Co.,
Chartered Accountants, as the Statutory Auditors of the Company for the
period commencing from the conclusion of the Eleventh Annual General
Meeting until the conclusion of the Twelfth Annual General Meeting and
to fx their remuneration.
9. Buy-Back of Shares
During the fnancial year under review, the Company has not offered to
buy-back any of its outstanding shares.
10. Conservation of Energy
The operations of the Company are not energy intensive. A continuing
effort is being made by the Company and its employees to reduce the
wastage of scarce energy resources.
11. Foreign Exchange Earnings & Outgo
Statement pursuant to 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:
i) Activities relating to export, initiatives to increase exports,
developments of new export markets for products and services and export
plan:
The Company is poised to maintain its leadership position in the
markets it operates in. The Company is actively looking at new business
opportunities and is exploring new export avenues in various verticals.
ii) Total foreign exchange earned and used:
Amount in Rupees
Financial Year Financial Year
2009-2010 2008-2009
Foreign exchange earnings _ 581,292
Foreign exchange outgo 2,263,137 9,331,143
12. Technological Absorption, Adaptation and Innovation
Statement pursuant to 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 hereunder:
a) Efforts made towards technology absorption,
adaptation and innovation N.A.
b) Benefts derived as a result of the
above efforts N.A.
c) Information regarding imported technology N.A.
13. Research & Development
a) Specifc areas in which Research and
Development is carried out by
the Company N.A.
b) Benefts derived as a result of the above
research and development N.A.
c) Future plan of action N.A.
d) Expenditure on Research and Development N.A.
14. Particulars of Employees
Particulars of the employees as required under the provisions of
Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are given in the
annexure appended hereto and forms part of this report. In terms of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report and
Accounts are being sent to all the Members excluding the aforesaid
annexure. Any Member interested in obtaining a copy of the said
annexure may write to the Company Secretary at the Registered Offce of
the Company.
15. Share Capital & Listing of Securities
The equity shares of the Company are listed and admitted to dealings on
Bombay Stock Exchange Limited (BSE) and National Stock Exchange of
India Limited (NSE) effective from February 15, 2006. Annual Listing
Fee has been paid to each exchange.
16. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the fnancial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is set out in a separate section forming part
of the Annual Report.
17. Corporate Social Responsibility
Your Company has focused its Corporate Social Responsibility (ÃCSRÃ)
efforts on the visually impaired people. The Company has been making
audio books for the last two years as part of its CSR program. The
Company has so far converted about 350 books into audio books. The
Company associates closely with the National Association of the Blind
(ÃNABÃ) and through them reaches out to hundreds of blind schools
across the country. The Company also works in the entertainment sphere
by converting feature flms into audio flms for the visually impaired
people.
18. Corporate Governance
The Company is adhering to good corporate governance practices in every
sphere of its operations. The Company has taken adequate steps to
ensure that all mandatory provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreements entered into with the
Stock Exchanges are complied with. A separate report on Corporate
Governance is enclosed as a part of the Annual Report along with a
certifcate from a practicing company secretary confrming compliance
with the conditions of Corporate Governance.
19. Directorsà Responsibility Statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, the Directors, based on the representations received from the
Operating Management, hereby confrm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
ii) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and have applied the suggested accounting
policies 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 for the fnancial year ended on March
31, 2010 and of the proft of the Company for that period;
iii) they have taken proper and suffcient care 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, to the best of
their knowledge and ability;
iv) they have prepared the annual accounts on a going concern basis.
20. Subsidiary Companies
Alternate Brand Solutions (India) Limited is engaged in the business of
event management/ experiential marketing under the brand and style
360.
Times Innovative Media Limited is engaged in the business of
Out-of-Home (ÃOOHÃ) media under the brand and style ÃTimes OOHÃ.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Balance Sheet, Proft and Loss Account and other documents
of its subsidiary companies. The Company applied to the Ministry of
Corporate Affairs, Government of India, for seeking an exemption from
such attachments of its subsidiaries, since the Company presents the
audited consolidated fnancial statements in the Annual Report. Pursuant
to the approval from the Government of India, Ministry of Corporate
Affairs vide their letter No. 47/28/2010-CL-III dated January 13, 2010,
the Balance Sheet, Proft and Loss Account and other documents of the
subsidiary companies are not being attached with the Balance Sheet of
the Company. Relevant fnancial information of the subsidiary companies
is disclosed in the Annual Report. The Company shall make available the
Annual Accounts and the related detailed information of its
subsidiaries to any Member of the Company or its subsidiaries who may
be interested in obtaining the same at any point of time. These
documents will also be available for inspection during business hours
at the Registered Offce. The Consolidated Financial Statements
presented by the Company include fnancial results of its subsidiary
companies.
21. Consolidated Financial Statements
In accordance with the Accounting Standard 21 on Consolidated Financial
Statements, the audited Consolidated Financial Statements are annexed
forming part of the Annual Report.
22. Acknowledgements
Your Directors take this opportunity to convey their appreciation to
all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other
business associates for their continued support and confdence in the
management of the Company. Your Directors are pleased to place on
record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity
and cooperation and acknowledge that their support has enabled the
Company to achieve new heights of success.
For and on behelf of the Board of Directors.
Vineet Jein
Mumbai, May 19, 2010 Chairman
Registered Office:
4th Floor, A Wing,
Matulya Centre,
Senapati Bapat Marg,
Lower Parel (West),
Mumbai - 400 013.