Your Directors take pleasure in presenting the 23rd Annual Report together with theAudited Statement of accounts of the Company for the financial year ended March 31 2017.
The salient features of the Company's financial results for the year under review areas follows:
| || ||(Rs. in lacs) |
|Particulars ||2016-2017 ||2015-2016 |
|Income from operations ||28413.40 ||25684.93 |
|Less: Total expenditure ||24552.88 ||22261.73 |
|Operating ||3860.52 ||3423.20 |
|Less: Interest ||- ||- |
|Less: Depreciation ||1176.50 ||871.58 |
|Operating Profit after interest and depreciation ||2684.02 ||2551.62 |
|Add: Other income ||1867.83 ||2409.83 |
|Profit before tax ||4551.85 ||4961.45 |
|Less: Provision for taxation ||1453.61 ||1253.20 |
|Net profit after tax ||3098.24 ||3708.24 |
|Other Comprehensive Income ||(8.21) ||(3.90) |
|Balance brought forward from previous year ||26093.75 ||23956.98 |
|Appropriations: || || |
|Disposable profits ||29183.78 ||27661.32 |
|Less: Interim dividend ||- ||911.17 |
|Less: Proposed dividend ||- ||470.91 |
|Less: Corporate dividend tax ||- ||185.49 |
|Less: Transfer to General Reserve ||- ||- |
|Balance carried to balance sheet ||29183.78 ||26093.75 |
Note: The Financial Statements of the Company is prepared as per Indian AccountingStandards (Ind AS) for the first time for the year ended March 31 2017. The financialstatements for the year ended March 31 2016 have been restated in accordance with IND ASfor comparative information.
RESULTS OF OPERATIONS
During the year under review the Standalone Revenue from operations of the Company isRs. 28413.40 lacs an increase of 11 % over the previous year Rs. 25684.93 lacs. As perthe Consolidated Accounts the total revenue from operations has increased by 44 % fromRs. 29275.52 lacs to Rs. 42117.49 lacs during the year. Your Company had a standalonegrowth with a Net profit of Rs. 3090.02 lacs during the year as compared to Net profit ofRs. 3704.35 lacs of previous year. A detailed discussion on the business performance ispresented in the Management Discussion and Analysis Section of the Annual Report.
Your Directors are pleased to recommend a Final Dividend of Re. 0.40/- per equity shareof the face value of Rs. 2 /- each for the financial year ended March 31 2017.
The Final Dividend subject to the approval of Members at the Annual General Meeting onAugust 31 2017 will be paid to the Members whose name appear in the Register of Membersas on Thursday August 24 2017.
The total dividend for the financial year will absorb Rs. 30372177.20/- excludingDividend Distribution Tax of Rs. 6183061.00/-
TRANSFER TO RESERVES
Your Directors does not propose any amount of transfer to the General Reserve and anamount of Rs. 29183.78/- lacs is proposed to be retained in the statement of profit andloss account.
The Company does not have any borrowings.
During the financial year 2016-2017 the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity. As on March 31 2017 thepaid-up Equity Share Capital of the Company is Rs. 151860886/-. Of the total paid upshare capital of the Company 42.22% is held by Promoters and Promoter Group all indematerialized form and balance of 57.78% is held by persons other than Promoters andPromoter Group out of which majority is in dematerialized form.
During the year under review your Company has not accepted or renewed any amountfalling within the purview of provisions of Section 73 of the Companies Act 2013("the Act") read with the Companies (Acceptance of Deposit) Rules 2014. Hencethe requirement for furnishing of details relating to deposits covered under Chapter V ofthe Act or the details of deposits which are not in compliance with the Chapter V of theAct is not applicable.
CHANGE IN NATURE OF BUSINESS
There was no change in nature of the business of the Company during the year underreview.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations performance and future outlook of the Company andits businesses is given in the Management Discussion and Analysis which forms part of theAnnual Report.
As on March 31 2017 your Company has the following Subsidiaries:
1. BALAJI MOTION PICTURES LIMITED (BMPL)
Balaji Motion Pictures Limited (BMPL) is the movie production arm of BalajiTelefilmsLimited (BTL) one of India's leading integrated media conglomerate. Thewholly-owned subsidiary is engaged in film production and distribution of mostly Hindimovies leveraging the creative abilities of Ms. Ekta Kapoor and the commercial vision ofMrs. Shobha Kapoor.
2. BOLT MEDIA LIMITED (BOLT)
BOLT Media Limited is a 100% subsidiary of Balaji Telefilms Limited. It has establisheditself in the market for its quality programming and created a niche in a competitiveenvironment.
3. ALT DIGITAL MEDIA ENTERTAINMENT LIMITED (ALT)
The Company's digital content business is housed under ALT Digital Media EntertainmentLtd. which was incorporated as a wholly-owned subsidiary in August 2015. Through thesubsidiary we have made a strategic foray into the B2C digital content business segmentto monetise the incredible potential of original premium on-demand entertainment.
4. CHHAYABANI BALAJI ENTERTAINMENT PRIVATE LIMITED (CBEPL)
Chhayabani Balaji Entertainment Private Limited (CBEPL) is a subsidiary of BalajiTelefilms Limited (BTL) in partnership with Kolkata-based Chhayabani Private Limited.
5. MARINATING FILMS PRIVATE LIMITED (MFPL)
Marinating Films Private Limited is a subsidiary of BTL. It owns the concept formatand all proprietary rights and intellectual property rights in Box Cricket League (BCL)The Indian Telly Calender (ITC) and Indian Television Style Awards (TSA) organised on ayearly basis.
A detailed review of the operations performance and future outlook and its businessesduring the year under review of the above mentioned subsidiaries form part of theManagement Discussion and Analysis which forms part of the Annual Report.
SCHEME OF ARRANGEMENT AND AMALGAMATION
The Board of Directors of the Company in their meeting held on September 27 2016 afterconsidering the recommendations of the Audit Committee approved the Composite Scheme ofArrangement and Amalgamation pursuant to the provisions of Sections 391 to 394 read withSection 100 of the Companies Act 1956 or under Section 230 to 234 of the Companies Act2013 and other applicable provisions of the Companies Act 1956 and/or Companies Act 2013("Scheme of Arrangement and Amalgamation") involving (i) the demerger of theundertaking pertaining to the film production business of Balaji Motion Pictures Limiteda wholly owned subsidiary and vesting of the same in Company and the consequent reductionin the equity share capital of Balaji Motion Pictures Limited; (ii) the amalgamation ofBOLT Media Limited a wholly owned subsidiary with the Company in accordance with theterms and conditions as set out in the Scheme of Arrangement and Amalgamation subject tonecessary approvals of the Stock Exchanges and sanction of National Company Law TribunalMumbai Bench ("NCLT"). The Company received the observation letters fromNational Stock Exchange of India Limited and BSE Limited dated January 16 2017 conveyingtheir "No Objection" in terms of Regulation 37 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 for filing the Scheme of Arrangement andAmalgamation with the NCLT. Further the NCLT vide order dated April 12 2017 directedthat a meeting of the equity shareholders of the Company be held on May 24 2017 at 1.00p.m. at "The Club" 197 D N Nagar Andheri (West) Mumbai 400 053 forthe purpose of considering and if thought fit approving with or without modificationthe Scheme of Arrangement and Amalgamation. Notice for convening meeting of equityshareholders of the Company had already been circulated to all the equity shareholders ofthe Company the unsecured creditors and the relevant Regulatory Authorities as per theprovisions of Companies Act 2013 and the order of the NCLT dated April 12 2017.
AUDITED FINANCIAL STATEMENTS OF THE SUBSIDIARIES
The Audited Financial Statements the Auditors Report thereon and the Board's Reportwith applicable annexure for the year ended March 31 2017 for the Subsidiary Companiesare annexed along with the Annual Report.
Further a statement containing the salient features of our subsidiaries in theprescribed format AOC-1 is appended as Annexure I to the Board Report.
The Company has adopted a Policy for determining Material Subsidiaries in terms ofRegulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ('Listing Regulations'). The Policy asapproved by the Board is uploaded on the Company's website.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company is prepared in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies(Accounts) Rules 2014 form part of the Annual Report and are reflected in theConsolidated Financial Statements of the Company.
The Annual financial statements of the subsidiaries and related detailed informationwill be kept at the Registered Office of the Company as also at the registered officesofthe respective subsidiary companies and will be available to investors seeking informationat any time.
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 2016-2017 and thedate of this report which have effect over the financial position of the Company.
DIRECTORS & KMP
There was no change in Directorship and Key Managerial Personnel (KMP) of the Companyduring the year under review.
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany Mr. Tusshar Kapoor Director of the Company retires by rotation at the ensuingAnnual General Meeting of the Company and being eligible has offered himself forre-appointment and your Board recommends his re-appointment.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each independent director undersection 149(7) of the Companies Act 2013 that she/he meets the criteria of independencelaid down in section 149(6) of the Companies Act 2013 and Regulation 16 of the ListingRegulations.
Pursuant to section 139 of Companies Act 2013 and Rule 6 of The Companies (Audit andAuditors) Rules 2014 it is mandatory to rotate the Statutory Auditors on completion ofmaximum tenure permitted under the section. The Audit Committee of the Company hasproposed and on May 23 2017 the Board of Directors of the Company has recommended theappointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration Number012754N/N500016) as Statutory Auditors of the Company to hold office for a period of fiveconsecutive years from the conclusion of the ensuing Annual General Meeting till theconclusion of the Annual General Meeting to be held for the financial year 2021-22subject to ratification of appointment by the members of the Company at every subsequentAnnual General Meeting. The first year of Audit will be of the financial statements forthe year ended March 31 2018.
In accordance with Companies (Cost Records and Audit) Rules 2014 Cost Audit is notapplicable to the Company.
Pursuant to the provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s. Makarand M. Joshi & Co. Practicing Company Secretaries as SecretarialAuditors of the Company for financial year 2017-18.
The Audit Report for the financial year ended March 31 2017 does not containany qualifications reservations and adverse remarks. The Auditors' Report is enclosedwith the financial statements in this Annual Report.
Secretarial Audit Report issued by M/s. Parikh & Associates PracticingCompany Secretaries in form MR-3 for the financial year 2016-17 is appended as Annexure IIto the Boards' Report. The said Report does not contain any observation or qualificationrequiring explanation or comments from the Board under Section 134(3) of the CompaniesAct 2013.
COMMITTEES OF THE BOARD
In compliance with the requirements of Companies Act 2013 and Listing Regulations yourBoard had constituted various Board Committees including Audit Committee Nomination andRemuneration Committee Stakeholder Relationship Committee Internal Complaints Committeeand Corporate Social Responsibility Committee. Details of scope constitution terms ofreference number of meetings held during the year under review along with attendance ofCommittee Members has been disclosed in the Corporate Governance Report which forms partof the Annual Report.
DETAILS OF POLICY DEVELOPED AND IMPLEMETED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
The Corporate Social Responsibility Committee has been entrusted with theresponsibility of formulating and recommending to the Board a Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by theCompany monitoring the implementation of the framework of the CSR Policy and recommendingthe amount to be spent on CSR activities.
The Composition of Corporate Social Responsibility Committee is as follows:
Chairman : Mr. Jeetendra Kapoor - Non-Executive Director
Members : Mrs. Shobha Kapoor - Executive Director
Mr. D.G. Rajan - Independent Director
Mr. Ashutosh Khanna - Independent Director
Secretary : Mrs. Simmi Singh Bisht
The Annual Report on CSR activities is appended as Annexure III to the Boards' Report.
I) EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of AnnualReturn in Form MGT 9 is appended as Annexure IV to the Boards' Report.
II) INTERNAL FINANCIAL CONTROL SYSTEM AND ADEQUACY
The Board has adopted the policies and procedures for ensuring the orderly andefficient control of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds errors reportingmechanisms the accuracy and completeness of the accounting records and timely preparationof reliable financial disclosures.
III) VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism of reporting illegal or unethical behaviour. The Company has a WhistleBlower Policy wherein the employees are free to report violations of laws rulesregulations or unethical conduct to their immediate supervisor or such other person as maybe notified by the Management to the workgroups. The confidentiality of those reportingviolations is maintained and they are not subjected to any discriminatory practice. TheWhistle Blower Policy of the Company is also posted on the website of the Company www.balajitelefilms.com.
IV) DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The requisite details containing the names and other particulars of employees inaccordance with the provisions of Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is appended as Annexure V(a) to the Boards' Report.
V) DISCLOSURE UNDER RULE 5(2) AND RULE 5(3) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The requisite details relating to the remuneration of the specified employees coveredunder Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is appended as Annexure V(b) to the Boards' Report.
VI) RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onthe Company's website. The Policy intends to ensure that proper reporting approval anddisclosure processes are in place for all transactions between the Company and RelatedParties. All Related Party Transactions entered during the year were placed before theAudit Committee for review and approval and were in Ordinary Course of the Business and atArm's Length basis. Particulars of Related Party Transactions referred to in Section188(1) of material orders passedthe Companies Act 2013 in the prescribed Form AOC-2 isappended as Annexure VI to the Board's Report.
VII) BUSINESS RISK MANAGEMENT
The Company has in place a Risk Management Policy pursuant to the provisions ofSection 134 of the Act. The Risk Management framework enables identification measuresandevaluation are taken ofto businessreduce risks and opportunities seeks to createtransparency minimize adverse impact on business objectives and enhance the Company'scompetitive advantage. It also describes the risk management approach across theenterprise at various levels. Major risks identified by the business and functions aresystematically addressed through mitigation actions on a periodic basis. Existing controlmeasures are evaluated against the relevant Key Performance Indicators. The AuditCommittee of the Company does the risk identification assessment analysis and mitigationin consultation with various heads of the departments.
VIII) FIXED DEPOSITS
During the year under review the Company has not accepted any fixed deposit and assuch no amount of principal or interest was outstanding as on the balance sheet date.
IX) PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the company does not have any loans guarantee orinvestments under the provisions of section 186 of the Companies Act 2013 hence nodisclosure is required to be given in this regards.
X) SEXUAL HARASSMENT
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy. Duringthe year 2016-17 no sexual harassment complaints has been registered with the Company.
XI) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant the Regulators/Courts which would impact the going status ofthe Company & its future operations.
CONSERVATION OF ENERGY
ENERGY CONSERVATION MEASURES TAKEN BY THE COMPANY
Our operations are not energy intensive. However significant consumption by usingenergy-efficient computers and by purchasing energy-efficient equipment. We purchasecomputers laptops air conditioners etc. that meet environmental standards whereverpossible and regularly upgrade old equipment with more energy-efficient equipment.Currently we use Compact Fluorescent Lamp (CFL) fixtures to reduce the power consumptionin the illumination system.
The Company's research and development initiative mainly consists of ideation of newsubjects for our content production business which are used in the creation of newstoryline and tracks. The expenses incurred on such initiatives are not practicallyquantifiable.
The Company is an integrated player in the entertainment industry and our business issuch that there is limited scope for new technology absorption adaptation and innovation.However the Company uses the latest technology wherever possible to deliver superiorproduction value as a regular process.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The foreign exchange earnings is Rs.8.05 lacs (Previous Year Rs. 8.77 lacs) and theforeign exchange outgo is Rs. 504.45 lacs (Previous Year Rs. Nil).
Your Company has been practising the principles of good Corporate Governance over theyears and it is a continuous and ongoing process. A detailed Report on CorporateGovernance practices followed by your Company in terms of the Listing Regulationstogether with a Certificate from the Auditors confirming compliance with the conditions ofCorporate Governance which forms part of the Annual Report.
MEETINGS OF THE BOARD
During the year under review five (5) meetings of the Board of Directors were held thedetails of which are given in the Corporate Governance Report that forms part of thisAnnual Report. The intervening gap between two Board Meetings was not more than OneHundred and Twenty Days.
NOMINATION & REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection & appointment of Directors Senior Management and theirremuneration. The Nomination & Remuneration Policy is attached along with theCorporate Governance Report of the Company that forms part of the Annual Report.
MECHANISM FOR EVALUATING BOARD MEMBERS
One of the key functions of the Board is to monitor and review the Board evaluationframework. The Board in consultation with the Nomination and Remuneration Committee laysdown the evaluation criteria for the performance evaluation of Executive/Non-Executive/Independent Directors. The questionnaire of the survey is a key part of the process ofreviewing the functioning and effectiveness of the Board and for identifying possiblepaths for improvement.
The following are the criteria on the basis of which the Directors are evaluated:
1) Knowledge to perform the role.
2) Time and Level of Participation.
3) Performance of Duties and Level of Oversight.
4) Professional Conduct and Independence.
Feedback on each Director is encouraged to be provided as a part of the survey.
Schedule IV of Companies Act 2013 mandates that annual performance evaluation ofDirectors should be carried out by Independent Directors and annual performance evaluationof Independent Directors should be carried out by other Directors to the exclusion ofDirector 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 which forms part of the Annual Report. The Board approvedthe evaluation process results as collated by the Nomination & Remuneration Committeeof the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) In the preparation of the annual accounts for the financial year ended March 312017 the applicable accounting standards had been followed along with proper explanationrelating to any material departures;
b) The Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the year under review;
c) Proper and maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
d) The annual accounts for the financial year ended March 31 2017 had been prepared ona going concern' basis;
e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively
Your Directors wish to acknowledge with gratitude and place on record theirappreciation to all stakeholders - shareholders investors customers suppliers businessassociates banks regulatory and governmental authorities for their cooperationassistance and support. Your Directors also wish to thank their employees for theirdedicated services.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Jeetendra Kapoor |
|Place: Mumbai ||Chairman |
|Date: May 23 2017 ||(DIN: 00005345) |