B.A.G. Films and Media Limited Your Directors have pleasure in presenting their 24thAnnual Report on business and operations of the Company along with the Audited FinancialStatements for the financial year ended March 31 2017. The consolidated performance ofthe Company and its subsidiaries has been referred to wherever required.
The standalone and consolidated performance of the Company and its subsidiaries forthe year under review along with previous year figures are given hereunder:
| || || || ||(Rupees in Lacs) |
|Particulars ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Total Income ||2474.70 ||2381.73 ||13761.25 ||11881.67 |
|Profit before Depreciation & Financial Charges ||1556.66 ||1553.45 ||3286.24 ||2985.17 |
|Financial Charges ||1068.91 ||1319.68 ||1634.95 ||1521.13 |
|Cash Profit ||487.76 ||233.78 ||1651.29 ||1464.04 |
|Depreciation ||785.71 ||928.63 ||1299.15 ||1515.03 |
|Profit before Tax ||(297.95) ||(694.86) ||352.14 ||(50.99) |
|Provision for Tax ||(35.71) ||(84.56) ||(6.42) ||(53.56) |
|Profit after Tax ||(262.23) ||(610.30) ||358.56 ||2.57 |
|Proposed Dividend ||Nil ||Nil ||Nil ||Nil |
COMPANY PERFORMANCE/ STATE OF COMPANY'S AFFAIRS
During the year under review the Standalone revenue from operation of the company isRs. 2440.46 lacs against Rs. 2311.58 lacs during the previous financial year. As per theConsolidated Accounts the total revenue from operations increased by 16.46% from Rs.11736.74 lacs to Rs. 13668.40 lacs during the year. Also your Company improved on bottomline by improving efficiency. There was standalone Cash Profit of Rs. 487.76 lacs asagainst Rs. 233.78 lacs in previous year.
On standalone basis loss after tax for the year was substantially curtailed down toRs. 262.23 lacs against Rs. 610.30 lacs in Financial Year 2015-16.
B.A.G. Network's production house Studio 24' holds the unique distinctionof producing programmes of all genres for a range of channels and audience.
Your Company creates and delivers popular high quality programming for catering to notonly domestic but also to the demands of international viewership and expects to earn highreturns for the stakeholders. Your Company also leveraged content creations and madeoptimum use of internal resources and its infrastructure by creating news andentertainment content for various content aggregators.
Your company produced successful programmes like U Me aur TV Haqiqat UP Yatra Aaj KaAgenda Kalchakra and Jago India across different channels and strengthened its presence.
News24 a 24 hours National Hindi free to air Hindi news channel operating throughits subsidiary News24 Broadcast India Limited has consistently maintained healthy marketshare in Hindi News Genre and is available throughout India on cable and DTH platforms.
News 24 Hindi news channel is also available throughout West Asia and the MENA Regionon DU network.
E24 a 24 hours Bollywood Entertainment channel operating through its subsidiaryE24 Glamour Limited pitched as Bollywood's channel managed to attract audience of all agegroups and succeeded in creating a new genre in television entertainment. E24 nowavailable throughout west Asia and the MENA region on DU network has gained popularity ininternational market too. Darshan24: Darshan24 is the new age devotional channelwhich has been designed for all age groups. The Channel endeavors to bring the massesclose to roots of our Indian culture and its diverse religion in order to teach and preachthe new generation our long age tradition and customs.
It is the source of all wisdom the home of all knowledge focusing on the elevationand awakening of the soul the enhancement of the power within us. Channel is dedicated tothe Indian Philosophy Religion Spiritual solidarity Culture and dissemination of thevast and timeless knowledge to the people of the world.
FM radio station on frequency 106.4 in the name of "Dhamaal24 - Har Khushihai Jahan" operating through its subsidiary Skyline Radio Network Limited is now thevoice of the regions and its many shows are household names in all ten cities where it isoperational i.e.Hissar Karnal Patiala Ranchi Muzaffarpur Dhule Jalgaon AhemednagarSimla and Jabalpur.
The Company has successfully migrated its FM radio station from Phase II to Phase-IIIin 2015 and got licenses to operate it for further 15 (fifteen) years from Ministry ofInformation and Broadcasting of Government of India.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended March 31 2017.
The Directors express their inability to declare any dividend for the financial yearended March 31 2017 on account of loss incurred during the year under review. The Companyhas not made any transfer to General Reserve.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 (herein after referred as "theAct") relevant amounts which remained unpaid or unclaimed for a period of sevenyears have been transferred by the Company to the Investor Education and Protection Fund(IEPF) established by the Central Government. During the year under review the Companyhas not any unclaimed and unpaid dividend amount for a period of seven years or morehence the said provision is not applicable on us.
There are 5 (five) Directors on the Board of your Company comprising of 3 IndependentDirectors 1 Non-Executive Director and a Chairperson cum Managing Director (CMD). TheBoard of the Company besides Ms. Anurradha Prasad as the Chairperson cum ManagingDirector has 2(two) women Independent Directors viz. Dr. Anuradha Mishra and Ms. UrmilaGupta.
Definition of Independence of Directors is derived from Regulation 16 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 (herein afterreferred as "the SEBI Listing Regulations") and Section 149(6) of the Act. TheCompany has received necessary declaration from Independent Directors stating that theymeet the prescribed criteria of independence. Based on the confirmation/ disclosuresreceived from the Directors under section 149 (7) of the Act the following Non-Executiveare considered as Independent Directors:
1. Dr. Anuradha Mishra
2. Ms. Urmila Gupta
3. Mr. Pankaj Chaturvedi
In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
Appointments/ Resignations from the Board of Directors
During the financial year under review Mr. Pankaj Chaturvedi was appointed as anIndependent Director by the Members at the 23rd Annual General Meeting of the Company heldon September 28 2016.
Appointments/ Resignations of the Key Managerial Personnel
Ms. Anurradha Prasad Chairperson cum Managing Director Mr. Ajay Jain Chief FinancialOfficer and Mr. Rajeev Parashar Secretary of the Company are the Key Managerial Personnelas per the provisions of the Act. During the year under review there was no change in theKey Managerial Personnel of the Company.
Directors Retiring by Rotation
Pursuant to provision of section 152 of the Act read with the Articles of Associationof the Company Mr. Sudhir Shukla will retire by rotation at the ensuing 24th AnnualGeneral Meeting and being eligible for re-appointment.
Pursuant to the provisions of the Companies Act 2013 and the SEBI Listing Regulationsthe Board has carried out the annual performance evaluation of its own performance of theDirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration and other Committees of the Board. At the meeting of the Board all therelevant factors that are material for evaluating the performance of individual Directorsthe Board and its various Committees were discussed in detail. A structured questionnaireeach for evaluation of the Board its various Committees and individual Directors wasprepared and recommended to the Board by the Nomination & Remuneration
Committee for doing the required evaluation after taking into consideration the inputreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees execution and performance ofspecific duties obligations and governance etc. Schedule IV of Companies Act 2013 readwith corporate governance requirements as prescribed by under the SEBI Listing Regulationsmandates that annual performance evaluation of Directors should be carried out byIndependent Directors and annual performance evaluation of Independent Directors should becarried out by other Directors to the exclusion of Director being evaluated.
The evaluation of all the Directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe Corporate Governance Report section in the Annual Report. The Board approved theevaluation process results as collated by the Nomination & Remuneration Committee ofthe Company.
The Board of Directors of your Company met 5 (_ve) times during the year under review.The details of Board meetings and attendance of the Directors are provided in theCorporate Governance Report which forms part of this report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013.
Composition of Committees of the Board of Directors
The Board Committees play a crucial role in the governance structure of the Company andhave been constituted to deal with specific areas/activities which concern the Company andneed a closer review. The Board Committees are set up under the formal approval of theBoard to carry out clearly defined roles which are considered to be performed by membersof the Board. The terms of reference of Board Committees are determined by the Board fromtime to time.
The Company's Board has the following Committees:
1. Audit Committee
2. Stakeholders Relationship Committee
3. Risk Management Committee
4. ESOP Compensation Committee
5. Nomination and Remuneration Committee
6. Securities Committee
The details of terms of reference membership composition and attendance at meetingsare provided in Corporate Governance Report of this Annual Report which forms part of thisreport.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:-
a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year March 31 2017 andof the loss of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts of the Company on a going concern'basis.
e) the internal financial controls to be followed by the Company were laid down andsuch internal financial controls are adequate and operating effectively.
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Company has four subsidiaries as on March 31 2017 out of which one is Wholly OwnedForeign Subsidiary. There is no associate company within the meaning of Section 2(6) ofthe Companies Act 2013.
Consolidated Financial Statements
The audited consolidated Financial Statements together with Auditor's Report form partof the annual report. The details of basis of preparation and consideration principle ofconsolidation are disclosed in Note No. 23 of the Consolidated Financial Statement.Pursuant to provisions of section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company. Further pursuant to the provisionsof section 136 of the Act the financial statement of the Company including theconsolidated financial statements along with relevant documents and separate auditedfinancial accounts in respect of subsidiaries are available on the company's websitewww.bagfilms.com.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) and section 134(3)(a) of the Act extract of the Annual Returnas on March 31 2017 in Form No. MGT-9 is enclosed as Annexure I to thisreport.
Your Company is not engaged in any manufacturing or processing activity as suchparticulars required to be given in terms of Section 134 (3) (m) of the Act read alongwith Companies (Accounts) Rules 2014 regarding conservation of energy and technologyabsorption are not applicable.
FOREIGN EXCHANGE EARNING AND OUTGO
During the financial year 2016-17 your Company's foreign exchange earnings was nil andforeign exchange outgoings were Rs. 3033408/- as against Rs. 15500000/- of foreignexchange earnings and Rs. 3130425/- of foreign exchange outgoings for the financial year2015-16.
SIGNIFICANT AND MATERIAL ORDERS
During the year under review there were no significant and material orders passed bythe Regulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company had internal financial control systems commensurate with the size andcomplexity of its operations to ensure proper recording of financial and monitoring ofoperational effectiveness and compliance of various regulatory and statutory requirements.The internal auditor monitors and evaluates the efficacy and adequacy of internal controlsystems in the Company. Based on the report of the internal auditor respectivedepartments undertake corrective action in their respective areas and thereby strengthenthe controls. Significant audit observations and corrective actions thereon are presentedto the Audit Committee of the Board.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the Financial Statements which forms part of thisReport.
RISK MANAGEMENT POLICY
In accordance with the requirements of the Companies Act 2013 the Company has adoptedRisk Management Policy approved by Board and established a risk management framework toidentify mitigate and control the risk and threat.
An abridged policy on risk management has been placed on the company's websitewww.bagfilms.com.
The details of Committee and its terms of reference are set out in the CorporateGovernance Report forming part of the Board's Report.
During the year under review your Company has not accepted any deposits under section73 to 76 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules2014.
CORPORATE SOCIAL RESPONSIBILITY POLICY
The Company believes in voluntary commitment Corporate Social Responsibilityinitiatives though mandatory contribution is not yet applicable on the company. TheCompany shall report the same and shall submit the relevant report as and when they becomeapplicable.
NOMINATION AND REMUNERATION POLICY
The Company has constituted a Nomination and Remuneration Committee of Directors incompliance with provisions of section 178 of the Companies Act 2013 and Regulation 19 ofthe SEBI Listing Regulations as amended from time to time. The Remuneration policy of theCompany is a comprehensive policy which is competitive in consonance with the industrypractices. The policy ensures equality fairness and consistency in rewarding theemployees on the basis of performance against set objectives.
The Company's Policy relating to appointment of Directors payment of managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in Annexure II forming part of the Board's Report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
All related party transactions are placed on a quarterly basis before the AuditCommittee and also before the Board for its approval. Prior omnibus approval of the AuditCommittee is obtained for the transactions which are of a foreseeable and repetitivenature. In line with the provisions of the Companies Act 2013 and the SEBI ListingRegulations the Board has approved a policy on related party transactions. An abridgedpolicy on related party transactions has been placed on the Company's website www.bagfilms.com . The particulars of every contract transaction and arrangement entered intoby the Company with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto are disclosed in Form No. AOC -2 in Annexure III forming part of theBoard's Report.
The Company has a Whistle Blower Policy to establish a vigil mechanism for Directorsand employees of the Company to report concerns about unethical behavior actual orsuspected fraud or violation of the company's code of conduct or ethics policy to theAudit Committee. There is no restriction for reporting any such occurrence and all theemployees have uninterrupted access for reporting their concern in confidence to the AuditCommittee. The details of the Whistle Blower Policy are posted on the website of theCompany at www.bagfilms.com .
AUDITORS AND AUDITORS' REPORT
M/s. Joy Mukherjee & Associates (FRN:006792C) Chartered Accountants who are theStatutory Auditors of the Company will hold office up to the forthcoming Annual GeneralMeeting. As per Companies Act 2013 a new firm M/s. Kumar Khare & Co. CharteredAccountants (ICAI Firm Registration No 006740C) has been recommended for appointment asStatutory Auditors of the Company for a term of 5 years from the conclusion of theforthcoming Annual General Meeting of the Company subject to ratification by theshareholders every year. M/s. Kumar Khare & Co. Chartered Accountants have confirmedtheir eligibility under Section 141 of the Act and the Rules framed thereunder andwillingness to accept office if appointed. Based on the recommendation of AuditCommittee the Board has recommended the proposal for placing the matter of appointment ofM/s. Kumar Khare & Co. Chartered Accountants as statutory auditors at the ensuing24th Annual General Meeting of the Company.
Qualification in Auditors reports
There are no qualifications reservations or adverse remarks made by M/s. Joy Mukherjee& Associates Statutory Auditors in their report for the financial year ended March31 2017.
Pursuant to provisions of section 143(12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Committee during the yearunder review.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Balika Sharma & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the financial year ended March 312017.
There are no qualifications reservations or adverse remarks made by the SecretarialAuditor in her report. The Report of the Secretarial Audit in Form No MR-3 for thefinancial year ended March 31 2017 is enclosed as Annexure IV to the Board'sReport.
The equity shares of the Company are listed with National Stock Exchange of IndiaLimited (NSE) and BSE Limited (BSE). There are no arrears on account of payment of listingfee to the Stock Exchanges.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements.
As per Regulation 34 of the SEBI Listing Regulations a separate section on corporategovernance practices followed by your Company together with a certificate from M/s. JoyMukherjee
& Associates Statutory Auditors on compliance with corporate governance normsunder the SEBI Listing Regulations is annexed and forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34 of the SEBI Listing Regulations the Management Discussionand Analysis report on your Company's performance industry trends and other materialchanges with respect to your Company and its subsidiaries wherever applicable areprovided separately and forms part of this Report.
CODE OF CONDUCT
The Company has in place a comprehensive Code of Conduct (the Code) modified from timeto time applicable to Directors Independent Directors and Senior Management Personnel.The Code gives guidance and support needed for ethical conduct of business and complianceof law. The Code reffects the values of the Company. A copy of the Code has been put onthe Company's website www.bagfilms.com. The Code has been circulated to Directors andSenior Management Personnel and its compliance is afirmed by them annually.
In compliance with the SEBI (prohibition of Insider Trading) Regulations 2015 (SEBIRegulations) the existing Code of Conduct which was formulated under erstwhile regulationhas been replaced with the new Code of Conduct viz. "Code of conduct for trading byinsiders" pursuant to Regulation 9 of the SEBI (Prohibition of Insider Trading)Regulations 2015. Besides the Company has also formulated code of fair disclosure ofUnpublished Price Sensitive Information in addition therewith pursuant to Regulation 8 ofthe SEBI (Prohibition of Insider Trading) Regulations 2015. These codes are applicable toDirectors/officers/connected person/designated employee of the Company and their immediaterelatives.
During the year under review the Company has not made any preferential allotment. Thepaid up Equity Share Capital as on March 31 2017 was Rs. 376236180/- (including thecalls in arrear of Rs. 170341/-) divided into 188118090 equity shares of Rs. 2 each.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder sub-section (12) of Section 197 of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as part ofthis Board's report in Annexure V.
The information required pursuant to Section 197 of the Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of your Company is available for inspection by the members atregistered office of the Company during business hours on working days up to the date ofthe ensuing Annual General Meeting. If any member is interested in obtaining a copythereof such member may write to the Company Secretary in this regard.
Information Required Under Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013
Your Company has a policy and framework for employees to report sexual harassment casesat workplace and the process ensures complete anonymity and confidentiality ofinformation. As required under the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 your Company has constituted anInternal Complaints Committee which provides a forum to all female personnel to lodgecomplaints (if any) therewith for redressal. No complaints were received by the committeeduring the year. This is in compliance with section 22 of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013.
Material Events Occurred between the end of Financial Year to which the FinancialStatements Relate and the Date of the Report :
No material events have occurred between the end of Financial Year 2016-17 and the dateof this Report which have effect over the financial position of the company.
The consolidated financial statements of the Company form a part of this Annual Report.The Audited Annual Accounts and related information of the Company's subsidiaries will bemade available upon request. These documents will also be available for inspection duringbusiness hours at the Company's registered office in Delhi India. The subsidiarycompanies' documents will also be available for inspection at the respective registeredoffices of the subsidiary companies during business hours.
Your Directors thank to the Central and State Government Departments organizations andagencies for the continued help and co-operation extended by them.
Your Directors also gratefully acknowledge all stakeholders of the Company viz.viewers producers vendors members stock exchanges auditors consultants dealer'sbanks and other business partners for the excellent support received from them during theyear. The Directors place on record their sincere appreciation to all employees of theCompany for their unstinted commitment and continued contribution to the Company's wellbeing.
For and on behalf of the Board of Directors
B.A.G. Films and Media Limited
Chairperson cum Managing Director
lace : Noida
Date : May 29 2017