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B A G Films & Media Ltd.

BSE: 532507 Sector: Media
NSE: BAGFILMS ISIN Code: INE116D01028
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VOLUME 172282
52-Week high 7.29
52-Week low 2.95
P/E 35.15
Mkt Cap.(Rs cr) 85.96
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.57
Sell Qty 4956.00
OPEN 4.30
CLOSE 4.30
VOLUME 172282
52-Week high 7.29
52-Week low 2.95
P/E 35.15
Mkt Cap.(Rs cr) 85.96
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.57
Sell Qty 4956.00

B A G Films & Media Ltd. (BAGFILMS) - Director Report

Company director report

DIRECTOR

To

The Members

B.A.G. Films and Media Limited

The Directors take pleasure in presenting the 21st Annual Report and the Company’sAudited Financial Statements for the financial year ended March 31 2014.

FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31 2014 issummarized below:

(Rupees in Lakhs)
Particulars 2013-14 2012-13
Total Income 5881.45 4538.65
Profit before Depreciation & Financial Charges 1973.77 1411.41
Financial Charges 1684.29 941.65
Cash Profit 289.48 469.76
Depreciation 1157.34 1453.00
Profit before Tax (867.86) (983.24)
Provision for Tax (8.35) (97.35)
Profit after Tax (859.50) (885.89)
Proposed Dividend Nil Nil

OVERALL PERFORMANCE AND OUTLOOK

Your Company achieved an impressive performance in terms of turnover both due toincreased revenue from commissioned programmes in India and also from content syndicationsin International market. Market penetration through innovative services in niche’segments were coupled with concentrated efforts of both Management and employees to attainthese levels of performance. The Gross revenues for the current year with MahatmaGandhitouched Rs.58.81 crore registering 30% growth over previous year. Profit beforedepreciation interest and tax registering a healthy growth of 40% from 14.11 crore to19.73 crore during the Financial

Year. However high financial cost resulted in reduced cash profits though there wasreduction in net losses as compared to previous year.

We look forward to sincere improved revenues from domestic and international marketsand better profitability in future.

Television Software:

B.A.G. Network’s production house ‘Studio 24’ holds the uniquedistinction of producing programs of all genres for a range of channels and audience.Programs like Do Dil Ek Jaan and Madhubala amongst others cover a gamut of genres inproducing of television programs. Studio-24 has set all new standards in producingtelevision programs. The Company continued its focus on commissioned programs and baggedcontracts from prestigious channels.

Your Company developed and strengthened its client base and produced shows forprominent channels viz. Colors Life OK and Star. The management is confident that thisinvestment would result into improved revenues and better profits in the coming years. TheCompany also plans to focus on sponsored programmes. With various prestigious contracts inhand and some more programmes that are lined up for launch Studio24 seems poised for avery healthy financial year.

The Company in association with ‘Nautanki Films Private Limited’ madelandmark shows such as ‘Madhubala- ek-ishq-ek-junoon"(Madhubala) for channelColors and ‘Jaan’ on Life OK channel. Two lead characters of the show viz.Madhubala and Rishabh Kundra(RK) won the "Most Lokpriya Jodidar" and anothercharacter Bittu Ji won "Most Mazedaar Personality" at the Golden Petal AwardShow 2013 on Colors. It also bagged the Best Fiction Show at the Apsara Guild Awards.During the year Madhubala has completed its 535 episodes. The show has received excellentreviews and has been liked across the audience for its unique concept.

Your Company plans to create and deliver popular high-quality programming for cateringto not only domestic but also to the demands of international viewership and expects toearn high returns for the stakeholders. Your Company also leveraged content creations andmade optimum use of internal resources and its infrastructure.

Media Education

Your Company has been providing media & entertainment education through its mediaschool iSOMES (International School of Media & Entertainment Studies). iSOMES isoffering full time graduate courses in Broadcast Journalism. iSOMES has its affiliationShilong and Guru Jambheshwar University and offers full time Graduate & Masterscourses in Broadcast Journalism. After completion of two successful years ISOMES MediaFest 24 "Manthan" entered its third year with its edition of 2014. iSOMES -iSOMES has spread its wings and its franchise in Lucknow has witnessed the healthy growth.It brings a revolutionary change in the educational world by providing a new stand topeople who want to enter and up bringing their creativity in the entertainment world. Theother courses offered by the school comprises:-

• Post Graduate full time Diploma in Broadcast Journalism

• Post Graduate full time Diploma in TV Production & Direction

• Certificate in Post Production & Video Editing

• Certificate in Camera & Lighting

• Certificate in Radio Production & Jockeying

• Certificate in Creative Writing & Scripting

• Certificate in Anchoring & Reporting

Broadcasting

News24a 24 hours National Hindi free to air Hindi news channel operating throughits subsidiary News24 Broadcast India Limited has been very well received by theaudiences. It has consistently maintained approx. 10% market share in Hindi News Genre andis available throughout India on cable and DTH platforms.

Programs like Aaj Ka Reporter Aamne Saamne Sabse Bada Sawal Mahabharat EkShakhsiyat ki 50 Ansuni Kahania Itihaas Gawah Hai Sadda Haq and Khabrein 30 Second Meinamongst others cover a gamut of genres in news reporting and have been receivedexceptionally well with the audiences across the nation. "Sadda Haq""Sabse Bada Sawal" and "Mahabharat" are most liked program on News 24.

News 24 Hindi news channel is also available throughout west asia and the MENA Regionon DU network. With this BAG Network marks it’s entry into the region and aims toconsolidate it’s position as one of the globally respected players in the mediaindustry. News 24 promises to consistently raise the standards of journalism withinnovative programming and uncompromising integrity.

E24 a 24 hours Bollywood Entertainment channel of your Company operating throughits subsidiary E24 Glamour Limited has also been growing at a rapid pace and has garneredhealthy channel shares. Pitched as Bollywood’s first news channel ‘E24’managed to attract audiences of various age groups and succeeded in creating a new genrein television entertainment and remains bollywood ka No.1 channel.

The channel had not only successfully been able to entertain its audience but had alsobeen educating the youth by sending important messages and uplifting the lifestyle to theglobal standard and at the same time not forgetting its culture and traditions.

In the past years E24 launched a slew of new shows while continuing with its flagshipshows like Bollywood Reporter E Special TV Ke Peeche Kya Hai Sound of Bollywood GoldenEra and U Me & TV thus strengthening its programming line-up further.

BAG Films is proud to announce that E24 India’s most popular bollywoodentertainment channel is now available throughout west asia and the MENA region on DUnetwork. With this BAG Films marks it’s entry into the region and aims to consolidateit’s position as one of the globally recognised players in the media industry.Bollywood ki har baat dekhiye E 24 ke saath is available exclusively on DU Network placedas channel no. 429.

Darshan24: Darshan24 is the new age devotional channel which has been designed forall age groups. The Channel endeavors to bring the masses close to roots of our Indianculture and its diverse religion in order to teach and preach the new generation our longage tradition & 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. This channel isdedicated to the Indian Philosophy Religion Spiritual solidarity Culture anddissemination of the vast and timeless knowledge of the great "Sanatana Dharma"to the people of the world.

The programmes on this channel range from Hindu bhajans kirtans aartis aradhanas andspiritual discourses by prominent respected saints to Good healthy living programs onyoga general well being special educational programming highlighting ayurveda along withdocumentaries on places of worship temples cities on the various festivals of India.

Darshan 24 channel produced programs such as Mandir Darshan Kaal Chakra DharmaSpecial Margdarshak Sundarkand Kaal Chakra and Sanjeevani. These are popular showswhich attracts audience of various age groups.

Radio

Your Company has 10 FM Radio stations operated in the brand name ‘Dhamaal24’at 106.4 FM under its subsidiary Skyline Radio Network Limited (formerly known asDhamaal24 Radio Network Limited) in the cities of Hissar Karnal Patiala ShimlaMuzaffarpur Ranchi Jabalpur Jalgaon Dhule and Ahmednagar.

106.4 FM Radio Dhamaal24 – Har Khushi hai Jahan is a hybrid FM Channel bringing tothe listeners life in all manifestations.Dhamaal24isachannelwithasliceoflifeand approachto the infotainment & entertainment programming. Riding on the vast reservoir oftalent and human resource Dhamaal24’s programming ideology is based on extensiveresearch demographic understanding and strategic planning in synchronization with salesrequirements. All out efforts are made to establish Dhamaal24 a brand with great recallvalue. Various programming are purposely aligned for maximum listenership. Our contententices are our regional listeners.

Your Company has range of novel and popular shows like Dil Ke Mareez Hazir Ho ZindagiLive Housefull Zara Hat Ke Zara Bachke Omkar Yad Kiya Dil Ne Aamne-Saamne Har KhushiHai Jahan Taka Tak Morning Chughliyan Velle Hum Velle Tum Bolymal Bumper BachakeBack to Back and Reel Ki Real Life are aired on Dhamaal24 keeping the regional flavor ineach of its programmes offered to its listeners.

DIVIDEND

The Directors express their inability to declare any dividend for the financial yearended March 31 2014 on account of loss during the year under review. The Company has notmade any transfer to General Reserve.

DIRECTORS

Pursuant to the provisions of Section 161(1) of the Companies Act 2013 and theArticles of Association of the Company Ms. Urmila Gupta (DIN 00637110) was appointed asan Additional Director designated as a Non-executive Independent Director w.e.f. November14 2013 and she holds office up to the date of the ensuing Annual General Meeting. TheCompany has received requisite notice in writing from a member proposing Ms. Urmila Gupta(DIN 00637110) for appointment as an Independent Director.

In terms of Article 89 of Articles of Associations of the Company and pursuant tosection 152 of the Companies Act 2013 Mr. Sudhir Shukla (DIN 01567595) retires at theensuing Annual General Meeting and being eligible has offered himself for re-appointmentin terms of the provisions of the Articles of Association of the Company. The Board ofDirectors recommend his re-appointment.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Clause 49 of theListing Agreement. The Companies Act 2013 provides for appointment of IndependentDirectors. Sub-section (10) of Section 149 of the Companies Act 2013 (effective from01.04.2014) provides that Independent Directors shall hold office for a term up to fiveconsecutive years on the Board of a Company; and shall be eligible for re-appointment onpassing a special resolution by the shareholders of the Company.

Sub-section (11) states that no Independent director shall be eligible for more thantwo consecutive terms of five years.from Statutory Auditors of the Company Sub-section(13) states that the provisions of retirement by rotation as defined in sub section (6)and (7) of section 152 of the Act shall not apply to such Independent Directors.

Our Non-executive Independent Directors (except for Ms.from CMD/SVP inter aliaconfirming Urmila Gupta) were appointed as directors liable to retire by rotation underthe provisions of the erstwhile Companies Act 1956. The Board of Directors has beenadvised that the Non- executive Independent Directors so appointed would continue to servethe term that was ascertained at the time of appointment as per the resolution pursuant towhich they were appointed. Therefore it stands to reason that only those Non-executiveIndependent Directors who will complete their present term at the ensuing AGM of theCompany in June 2014 being eligible and seeking re-appointment be considered byshareholders for reappointment for a term of up to five consecutive years.

Non- executive Independent Directors who do not complete their term at the ensuingAnnual General Meeting will continue to hold office till the expiry of their term (basedon retirement period calculation) and thereafter would be eligible for re-appointment fora fixed term in accordance with the Companies Act 2013.

Brief profile of the Directors who are to be appointed/reappointed nature of theirexpertise in specific functional areas names of companies in which they hold themembership of the Board of Directors or committee thereof chairmanship of the Boardtheir shareholding etc. as stipulated under Clause 49 of the Listing Agreement arefurnished in the notice of the ensuing Annual General Meeting and in the relevant sectionon Corporate Governance in the Annual Report elsewhere.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed chapter on "Management Discussion and Analysis Report" pursuant toclause 49 of the Listing Agreement is given elsewhere in the Annual Report separately.

CORPORATE GOVERNANCE

The Company believes that the essence of Corporate Governance lies in the phrase"Your Company". It is "Your" Company because it belongs to you-‘the Shareholders’. The Chairperson and Directors are "Your"fiduciaries trustees. Their objective is to take the business forward in such a way thatit maximizes "Your" long term value. Your Company is committed to benchmarkitself with global standards in all areas including highest standards of Good CorporateGovernance. Besides adhering to the prescribed Corporate Governance practices as perclause 49 of the Listing Agreement the company also endeavors to share information withits stakeholders openly and transparently on matters which have a bearing on its economicand reputational interest.

A certificate regarding the compliance of the conditions of Corporate Governance by theCompany as stipulated under Clause 49 of the Listing Agreement is also attached to thisReport.

Certificate correctness of the financial statements compliance with Company’sCode of Conduct adequacy of the Internal Control measures and reporting of matters to theAudit Committee in terms of clause 49 of the Listing Agreement with the Stock Exchangesis attached in Corporate Governance Report and forms part of this Report.

CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board Members and Senior Managementof the Company. The Code of Conduct has been posted on the Company’s website.

Board Members and Senior Management personnel have affirmed compliance with the Codeand a separate declaration to this effect is annexed to the Corporate Governance Report.

CHANGE IN REGISTERED OFFICE OF THE COMPANY

During the year the Company has changed its registered office from C-4 Shivalik NearMalviya Nagar Market New Delhi-110017 to 352 Aggarwal Plaza Plot No.8 Kondli NewDelhi-110096 vide its Board Meeting dated February 14 2014.

FIXED DEPOSITS

During the year under review the Company has not accepted any deposit under Section58A and Section 58AA of the Companies Act 1956 read with Companies (Acceptance ofDeposits) Rules 1975. from the Statutory

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act 1956 withrespect to the Directors’ Responsibility Statement it is hereby confirmed that:-

1. in the preparation of the annual accounts for the year ended March 31 2014 theapplicable accounting standards read with requirements set out under Schedule VI to theCompanies Act 1956 have been followed and there are no material departures from thesame;

2. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2014 and of the profitCompany for the year ended on that date;

3. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and

4. the Directors have prepared the annual accounts of the Company on a ‘goingconcern’ basis.

SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act 1956 we are required to attach the BalanceSheet Statement of Profit and Loss and other documents of our subsidiaries. During theYear we have four subsidiaries out of which one is foreign wholly owned subsidiary. TheMinistry of Corporate Affairs Government of India (MCA) vide its Circular No. 2/2011dated 08.02.2011 has exempted companies from complying with Section 212 provided suchcompanies publish the audited consolidated financial statements in the Annual Report.Accordingly the Annual Report 2013-14 contains such financial statements of subsidiaries.A statement pursuant to section 212 of the Companies Act 1956 for summery financialperformance of Subsidiary Companies is attached to this report. The audited financialstatement and related information of our subsidiaries will be made available on ourwebsite www.bagfilms.com.

The documents will also available for inspection during business hours at ourregistered office.

The Company is presenting consolidated accounts of its subsidiary companies prepared inaccordance with Indian Generally Accepted Accounting Practices (GAAP) and the same areattached herewith.

There has been no change in the nature of business of the company and any of itssubsidiary companies during the year.

The Company has obtained a Certificate Auditors of the Company certifying that theCompany is in compliance with the the FDI conditionalities w.r.t. no indirect foreigninvestment in prohibited sector entry route sectoral cap/conditionalties etc fordownstream investment made by in the subsidiary companies at secondary level under ForeignExchange Management Act 1999.

PREFERENTIAL ALLOTMENT

Employee Stock Option Scheme (ESOPS)

Pursuant to the Special Resolution passed by the Members at the Extra-Ordinary GeneralMeeting held on February 13 2007 and in principle approval from the Stock Exchanges yourCompany has implemented an Employees Stock Option Scheme ("the BAG ESOP Scheme")to reward the employees of the Company and its subsidiaries for their performance andassociation with the Company and also toof the motivate them to contribute to the growthand profitability of the Company whereby the Company planned to grant up to 10000000options to eligible employees. In the financial year 2008-09 company granted 1150000options to the eligible employees. Each option was exercisable for one equity share at aprice of Rs. 13/- each fully paid up on payment to the Company on completion of vestingperiod as per the above scheme.(Price revised to Rs. 3/- per share under the approval ofthe members of the Company at Annual General Meeting dated September 04 2010). During theyear 150000 vested options lapsed on expiry of the exercise period.

The certificate as required under Clause 14 of the said Guidelines and as obtainedfrom the Statutory Auditors with respect to the implementation of the BAG ESOP Schemeshall be placed at the forthcoming Annual General Meeting.

STATUTORY AUDITORS

M/s Joy Mukherjee & Associates Chartered Accountants Statutory Auditors of theCompany (Firm Registration No. 006792C) hold the office till the conclusion of theensuing Annual General Meeting and are eligible for reappointment. The Company hasreceived a certificate from them to the effect that their re-appointment if made wouldbe within the prescribed limits and that they are not disqualified for such re-appointmentwithin the meaning of section 141 of the Companies Act 2013.

AUDITORS’ REPORT

All observations made in the Independent Auditors’ Report and Notes forming partof the Financial Statements are self explanatory and do not call for any further commentsunder section 217 of the Companies Act 1956.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act 1956relevant amounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company from time to time on due dates to the Investor Education andProtection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason September 26 2013 (date of last Annual General Meeting) on the Company’s website(www.bagfilms.com) on the Ministry of Corporate Affairs’ website.

HUMAN RESOURCES

Your Directors would like to place on record their deep appreciation of all employeesfor rendering quality services and to every constituent of the Company be its viewersproducers regulatory agencies creditors or shareholders. The unstinting efforts of theemployees have enabled your company to remain in the forefront of media and entertainmentbusiness.

PARTICULARS OF EMPLOYEES

Information as per section 217(2A) of the Companies Act 1956 read with Companies(Particulars of Employees) Rules 1975 as amended from time to time forms part of thisReport. However as per the provision of section 219(1) (b) (iv) of the Companies Act1956 the Report and Accounts are being sent to all the members excluding the statementcontaining the particulars of employees to be provided under section 217(2A) of theCompanies Act 1956. Any member interested in obtaining such particulars may inspect thesame at the Registered Officeor Corporate Office of the Company or write to the CompanySecretary for a copy.

PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION

Your Company is not engaged in any manufacturing or processing activity as suchparticulars required to be given in terms of Section 217(1)(e) of the Companies Act 1956read with Companies (Disclosure of Particulars in the Report of the Board of Directors)Rules 1988 regarding conservation of energy and technology absorption are notapplicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year your Company has incurred expenditure in foreign currency to theextent of Rs. 2303219 as against Rs. 2836348 in the previous financial year 2012-2013and earned Rs. 73918820 (previous year Rs. NIL).

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their deep gratitude to the viewersproducers vendors investors and banks for their continued support during the year. YourDirectors also wish to place on record their appreciation for the dedicated servicesrendered by the employees of the Company at all levels who through their competencehard work solidarity cooperation and support have enabled theand also company toachieve consistent growth.

Your Directors recognize and appreciate the efforts and hard work of all employees ofthe Company and their continued contribution to its progress.

For and on behalf of the Board of Directors
Anurradha Prasad
Place : Noida Chairperson cum
Date : May 26 2014 Managing Director
(DIN: 00010716)

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