The Members D. B. Corp Limited
Your Directors have pleasure in presenting to you the 21st Annual Report together withthe Balance Sheet and Statement of Profit and Loss for the year ended 31st March 2017.
FINANCIAL HIGHLIGHTS (STANDALONE RESULTS) Rs. in Mn.
|PARTICULARS ||2016-17 ||2015-16 |
|Revenue from operations ||22574 ||20482 |
|Other Income ||172 ||242 |
|Total Revenue ||22746 ||20724 |
|Operating expenditure ||16130 ||15100 |
|EBIDTA ||6616 ||5624 |
|EBIDTA Margin ||29.09% ||27.14% |
|Finance Cost ||74 ||138 |
|Depreciation & Amortisation ||862 ||852 |
|Total Expenditure ||17067 ||16090 |
|Profit Before Tax ||5680 ||4634 |
|Provision for Current Tax Deferred Tax & Other Tax Expenses ||1907 ||1678 |
|Profit After Tax (PAT) ||3773 ||2957 |
|PAT Margin ||16.59% ||14.27% |
|FINANCIAL HIGHLIGHTS (CONSOLIDATED RESULTS) || || |
| || ||Rs. in Mn. |
|PARTICULARS ||2016-17 ||2015-16 |
|Revenue from operations ||22580 ||20493 |
|Other Income ||170 ||241 |
|Total Revenue ||22750 ||20735 |
|Operating expenditure ||16158 ||15145 |
|EBIDTA ||6592 ||5590 |
|EBIDTA Margin ||28.97% ||26.96% |
|Finance Cost ||74 ||138 |
|Depreciation & Amortisation ||863 ||853 |
|Total Expenditure ||17095 ||16136 |
|Profit Before Tax ||5654 ||4599 |
|Provision for Current Tax Deferred Tax & Other Tax Expenses ||1907 ||1678 |
|Profit After Tax (PAT) ||3748 ||2921 |
|PAT Margin ||16.47% ||14.09% |
|Dividend as % of Paid-up Share Capital ||40% ||110% |
REVIEW OF PERFORMANCE OPERATIONAL HIGHLIGHTS AND FUTURE OUTLOOK
India as one of the fastest growing economy of the world demonstrated strongresilience on the face of global slow growth environment. The below par performance of theinternational economy was reflected in a slowdown in growth in most emerging anddeveloping economies driven by weaker capital inflows and subdued trade. India remainedfairly insulated but consumer spending remained subdued in the early part of the year thatsaw an upturn of commodity prices after a year of deflation. Thereafter the gradualrecovery of the markets was impacted by the demonetisation drive that affected liquidityconditions particularly in the December & March quarter. On an overall basis thisfiscal was a period of moderate growth rates across all categories reflecting an operatingenvironment marked by slow growth volatile input costs and heightened competitiveintensity.
D. B. Corp Limited's performance for the fiscal 2016-17 needs to be viewed in thecontext of aforesaid economic and market environment forces. D. B. Corp Limited(DBCL') delivered another year of resilient performance aided by strong marketdevelopment strategies establishment of long term customer relationships and well plannedexecution of sharper on-ground marketing efforts.
Your Company maintained its focus on editorial strategy which has led to significantimprovement in quality of editorial content greater readership delight and growth. Thisyear DBCL became India's largest circulated multi-edition daily declared by thePress In India Report 2015-16 prepared by Registrar of Newspapers of India (RNI)'released by Mr. Venkaiah Naidu Hon. Minister for Information and Broadcasting Governmentof India. Dainik Bhaskar also maintains it's position as the world's fourth largestcirculated news daily as reported by WAN-IFRA 2016. These are significant operatingmilestones for your company that acknowledges our expanding reach the success of ourbusiness strategies and our leadership position in the Indian media industry. DainikBhaskar also became India's probably only ISO-9001:2015 Certified Newspaper a noteworthycertification for Quality Management Circulation Distribution Systems demonstrating yourcompany's excellence in operations and internal efficiencies.
As part of other significant developments:
Dainik Bhaskar launched the Surat edition with great success. In Surat Dainik Bhaskarcaters to the city's non-Gujarati speaking audience which is about 50% of the city'spopulation of 58 lakh.
Your Company also rolled out all 13 newly acquired FM radio stations in record timeexpanding its presence in 7 states across 30 cities.
As part of DBCL's digital business www.dainikbhaskar.com the largest Hindi NewsWebsite continues to secure the No. 1 spot in Hindi News and www.divyabhaskar.comcontinues to remain #1 Gujarati website. Dainik Bhaskar is the 2nd largest news site inIndia across language sites and continues to attract large viewership.
The digital business with 13 internet portals and
2 Mobile Apps in 4 languages continues to focus on strengthening viewer engagementresulting into 90.1 million Unique Visitors (UV) and 2.8 billion Page Views inMarch 17.
During the period under review the Indian economy showed an improvement over 2015-16but continued to grow at a slower pace. DBCL had undertaken an advertising yield strategyto supplement revenue growth by taking a substantial hike in advertising rates in FY2015-16. We are happy to report that it has delivered favourable response with advertisingrevenue witnessing a growth of around 6.45% and circulation revenue registering a growthof around 10.52%.
Performance highlights of your Company during the year under consideration are asfollows:
Standalone revenue from operations and other income was Rs. 22746 million witnessing agrowth of 9.76% as compared to Rs. 20724 million in the previous year
Standalone advertising revenue grew 7.84% to Rs. 15974 million which includes revenuefrom print radio and digital media business.
Circulation revenue grew by 10.52% to Rs. 4814 million from Rs. 4356 million largelydriven by rate growth. Circulation revenue has witnessed CAGR growth of around 15% forlast 5 years largely driven by rate growth.
The consolidated gross revenue increased by 9.7% to Rs. 22750 million EBIDTAincreased by 17.9% to Rs. 6592 million and PAT increased by 28.3% to Rs. 3748 millionover the last fiscal period.
The standalone gross revenue increased by 9.8% to Rs. 22746 million EBIDTAincreased by 17.6% to Rs. 6616 million and PAT increased by 27.6% to Rs. 3773 millionover the last fiscal period.
EBIDTA margin of matured business stands at 31.14%.
Emerging Editions / Business
In order to analyse the performance of the Company its divisions / editions aresegmented into emerging and matured editions / business as any new edition / businesslaunched takes long for stabilisation and for earnings.
Review of Performance of Emerging Editions/ Business Summary Financials (Rs. inMn.) (Standalone Results) Rs. in Mn.
|PARTICULARS ||Emerging Editions & Businesses ||Matured Business FY 2016-17 ||Total |
|Turnover || || || |
|-- Advt. Revenue ||408 ||15567 ||15974 |
|-- Sales ||184 ||4630 ||4814 |
|-- Others ||75 ||1884 ||1958 |
|Total Income ||666 ||22080 ||22746 |
|Newsprint Cost ||401 ||6208 ||6609 |
|Opex ||524 ||8998 ||9522 |
|Total Cost ||925 ||15205 ||16130 |
|EBIDTA ||(259) ||6875 ||6616 |
|EBIDTA Margin (%) ||(38.87%) ||31.14% ||29.09% |
|Interest ||2 ||73 ||74 |
|Depreciation ||46 ||816 ||862 |
|PBT ||(307) ||5987 ||5680 |
|PBT Margin (%) ||(46.03%) ||27.11% ||24.97% |
Emerging editions are classified as those editions which are below four years of age orwhich have turned profitable in last four consecutive quarters whichever is earlier.
For FY 2016-17 the emerging editions include editions in newly launched states ofMaharashtra and Bihar Mobile app and also newly launched e-real estate division during FY2015-16. Due to shifting of Jahrkhand and most part of Maharashtra in Mature categoryEmerging business revenues are not yearly comparable. At the same time mature businesshas reported EBIDTA Margin at 31.14%.
94.3 MY FM is one of the largest radio network of the Tier II and Tier III citiesspread across seven states and 30 cities (including the newly launched 13 radio stationsunder batch 1 of phase III in the current year) commanding a leadership rank in almost allof its markets both in terms of listenership as well as retail market share.
The Radio Business continued to perform exceptionally well in this financial year.Total income of the division increased from Rs. 1076 million during the previous year toRs. 1273 million reporting a growth of 18.28% one of the best among the Radio players.EBIDTA has grown by 19.6% at Rs. 478 million and EBIDTA margin is 37.55 % the highest inthe industry.
The digital business recorded a phenomenal 24% growth in total income to Rs. 567million backed by a robust strategy that revolves around hyper-local news coverage and ahuge library of diversified content for visitors spanning high interest news on variouslocal national and international issues. DB Digital saw a phenomenal growth in FY 2016-17in terms of Unique Visitors (UV) and Page per Visit (PV). DB Digital subsuming of thirteendigital portals has reported 90.1 million UV's and 2.8 bn PV's. Dainik Bhaskar & DivyaBhaskar app has collectively reached 9.2 million app downloads till March 2017.
MAJOR EVENTS DURING THE YEAR
Dainik Bhaskar was awarded ISO-9001:2015 certification for Quality Management Systemsin its newspaper distribution function and is probably the only newspaper organisation inIndia to receive such certification.
As per Press In India Report 2015-16 prepared by Registrar of Newspapers of India(RNI) Dainik Bhakar becomes the nation's largest circulated multi-edition daily.
Dainik Bhaskar launched Surat Edition catering to a large cosmopolitan readership baseof about 28 lakh non-Gujarati speaking population.
94.3 MY FM completed fastest roll out of all 13 newly acquired stations under batch Iof Phase III.
www.Dainikbhaskar.com the largest Hindi News Website continues to secure the No. 1 spotin Hindi News and www.Divyabhaskar.com continues to remain #1 Gujarati website
DB Corp continues to maintain to be ranked as the world's fourth largest circulatednews daily by WAN- IFRA Report 2016.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR has always been an integral aspect of DBCL's operations identity and position asIndia's largest media conglomerate. As one of India's most admired and acknowledgedcorporations
DBCL has an abiding vision to serve larger national priorities. Therefore your Companyhas been pursuing innovative strategies to synergize the creation of greater shareholdervalue along with dedicated focus on strengthening societal and environmental capital. Wehave been delivering sustainable solutions to maximize human development through its CSRprogrammes spanning education health women and children upliftment environmentalsustainability programs healthcare etc.
A brief outline of the CSR policy of the Company and initiatives undertaken by theCompany on CSR activities during the year are set out in "Annexure A" to thisreport. For other details regarding the CSR Committee please refer to the CorporateGovernance Report which is a part of this report. The CSR policy is available on thewebsite of the Company.
During the year the Company incurred an expenditure of Rs. 73.6 million on CSRactivities as against the required spend of Rs. 94.5 million. The Company could not spendthe balance required amount on account of non-availability of appropriate meaningful andconcrete CSR projects. The Company is committed to undertake further activities in theareas of promoting education empowering women environmental sustainability healthcareand sanitation etc. and ensure the balance is spent on concrete CSR activities.
AWARDS AND ACCOLADES
Awards do not only acknowledge success they are an important reinforcement of yourcompany's search for excellence passion and expertise. Your Company was conferred with asmany as 124 awards during FY 2016-17 under various segments of its business for itscampaigns CSR projects content marketing effectiveness in publication & media andprint innovations Best Use of CSR practices in Media & Entertainment Best BrandedContent Best Contextual Newspaper advertising Best use of celebrity endorsement BestPublic Awareness Programme etc. These include 16 Asian Customer Engagement Forum Awards(11 Gold 3 Silver and 2 Bronze) 5 BIG BANG Awards and 18 ACEF Awards (MarketingCapabilities CSR and Rural Marketing Awards).
The Company has during the year under review paid an Interim Dividend @ 40% (i.e. Rs.4/- per equity share of the face value of Rs. 10/- each) which was declared by the Boardand paid on 7th February 2017.
The management is evaluating different and efficient avenues for distribution of incomefor which it prefers to conserve resources. Hence no Final Dividend has been recommendedby the Board of Directors for FY 2016-17.
The total amount of dividend paid during the FY 2016-17 is Rs. 735 million asagainst Rs. 2021 million for the previous financial year.
DIVIDEND DISTRIBUTION POLICY
In line with Regulation 43A of the SEBI Listing Regulations the Company has framed aDividend Distribution Policy which was approved by the Board of Directors at its meetingheld on 20th October 2016. The Policy lays down a framework for considering decisions bythe Board of the Company with regard to distribution of dividend to the shareholders and/or retaining or plough back of its profits. A copy of the Policy has been attached asAnnexure B' to this report and the same is also available for viewing on theCompany's website and can be accessed at: http://investor.bhaskarnet.com/pages/corporategovernance.php?id=6
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Kailash Chandra Chowdhary Independent Director of the Company stepped down fromhis directorship on the Board from 19th October 2016. The Board places on record itsgratitude for the valuable services rendered by Mr. Chowdhary throughout his longassociation with the Company.
Mr. Ramesh Chandra Agarwal Chairman of the Company passed away for heavenly abode on12th April 2017. The Company lost a valued and a strong forward-thinking and generousleader. His dedication and commitment to the Company and his can-do spirit has helped theCompany's brand value grow multiple-folds. The Directors place on record their profoundgrief on his death and gratefully acknowledge his noted contributions to the media andpublishing industry.
On account of his death Mr. Ramesh Chandra Agarwal's position as member of theNomination and Remuneration Committee and Executive Committee of the Board stands vacated.
Pursuant to Section 152 of the Companies Act 2013 (the "Act") and theArticles of Association of the Company Mr. Girish Agarwal (DIN: 00051375) Non- ExecutiveDirector retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. He has confirmed that he is not disqualified from beingappointed as a Director in terms of Section 164 of the Act.
A detailed profile describing the skills / expertise and other qualifications of Mr.Girish Agarwal has been provided in the Explanatory Statement annexed to the Notice whichmay be taken as forming a part of this Report. The Board recommends and seeks your supportfor his re-appointment.
The Company has received declarations from the Independent Directors (IDs') thatthey meet with the criteria of independence as laid down under Section 149(6) of the Actand the Listing Regulations.
None of the Non-Executive Directors had any pecuniary relationships or transactionswith the Company which may have potential conflict with the interests of the Company atlarge.
During the year under review the Board met 4 (four) times the details of which aregiven in the Corporate Governance Report which may be taken as forming a part of thisReport.
COMMITTEES OF THE BOARD
The Board of Directors functions through the following committees constituted in termsof the provisions of the Companies Act 2013 and SEBI Listing Regulations:
|Audit Committee ||Stakeholders' Relationship Committee |
|Nomination and Remuneration Committee ||Corporate Social Responsibility Committee |
|Compensation Committee ||Executive Committee |
The legal provision of constitution of Risk Management Committee is not applicable tothe Company. The details regarding composition and meetings of these committees heldduring the year under review are given in the Corporate Governance Report which may betaken as forming a part of this Report.
The Board has evaluated the performance of every director on the Board based on theparameters listed out in the Policy on Performance Evaluation of the Board' framedby the Nomination and Remuneration Committee. The evaluation of the Board and itsCommittees has also enabled them to map out the degree of fulfilment of responsibilitiesof the Board as a whole and its Committees. A brief report describing the manner andprocess in which such evaluation was conducted has been explained in the CorporateGovernance Report which may be taken as forming a part of this Report.
POLICY ON NOMINATION AND REMUNERATION OF DIRECTORS KMPs AND OTHER EMPLOYEES
The Nomination and Remuneration Committee of the Company has laid down a policy toenable the selection appointment and remuneration of Directors and the Senior Managementof the Company. The Policy also outlines the basis for determining qualificationspositive attributes expertise and independence of a director and sets out to ensure thatthe interests of the executives are aligned with the Company's long term interests bysetting performance benchmarks and devising remuneration policies to help the Companyretain and attract experienced and qualified executives at the Senior Management level.
The detailed policy is given in the Corporate Governance Report which may be taken asforming a part of this Report.
EXTRACT OF ANNUAL RETURN
The details prescribed and required under Section 92(3) of the Companies Act 2013constituting the extract of the Annual Return is attached as Annexure C' to thisReport.
Your Company has robust process in place to identify key risks and to prioritizerelevant action plans to mitigate these risks. Risk management framework is reviewedperiodically by the Board and Audit Committee which includes discussing the managementsubmissions on risks prioritizing key risks and approving action plans to mitigate suchrisks.
The risk management framework adopted and implemented by the Company is given in theCorporate Governance Report which may be taken as forming a part of this Report.
INTERNAL CONTROLS SYSTEM AND ITS AQEQUACY
Your Company has built up robust internal controls commensurate with the size of itsoperations. It has laid down standard operating guidelines and processes which ensuressmooth functioning of activities and zero ambiguity in the mind of people who actuallyexecute the operations.
During FY 2016-17 your Company had appointed external agency to assist in re-evaluatingand testing its internal financial controls which encompassed review reclassification andrationalization of controls.
Independent chartered accountants / firms appointed at various locations of the Companyconduct periodical reviews surprise audit physical verification of inventory etc. forthis purpose. They evaluate operational efficiencies safeguards taken for utilisation ofthe Company's assets assessment of efficacy of accounting system provide suggestions onhow to improve the overall structure and practices of operations of the company'sbusiness scope of improvement in matters related to documentation / statutory obligationetc. The internal auditors place forth their report to the Audit Committee which isreviewed by it quarterly.
Your Company provides a common platform to its employees and directors for complainthandling in the form of whistle-blowing (vigil) mechanism. This mechanism enablesthem to report critical concerns or genuine grievances about any incidence of fraudmisconduct violation/potential violation of laws and policies etc. The mechanism laysdown the principles and standards governing the actions of the Company and its employeesand provides an overall framework for reporting suspected incidents and violations. Thedetails of this mechanism are given in the Corporate Governance Report which may be takenas forming a part of this Report. The same is also available for viewing on the website ofthe Company.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of loans and guarantees given and investments made under Section 186 of theCompanies Act 2013 have been given separately in the financial statements of the Companyread with Note 28 in the Notes to Accounts which may be read in conjunction with thisReport.
TRANSACTIONS WITH RELATED PARTIES
All related party transactions entered into during the financial year were at arm'slength terms. Also there have been no materially significant related party transactionsthat were entered into by the Company with its related parties. Hence the Company is notrequired to attach the prescribed Form AOC 2 to the Annual Report of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed:
1. that in the preparation of the annual accounts for the year ended 31st March 2017the applicable accounting standards had been followed along with proper explanationrelating to material departures;
2. that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2017and of the profit of the Company for the year ended as on that date;
3. that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4. that the directors had prepared the annual accounts for the financial year ended31st March 2017 on a going concern' basis;
5. that the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively;
6. that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The Company has 2 subsidiaries as on 31st March 2017. There are no associate companiesor joint venture companies within the meaning of Section 2(6) of the Act. There has beenno material change in the nature of the business of the subsidiaries.
Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company.
Performance / Business highlights
The performance / business highlights of the subsidiaries of your Company during thefinancial year 2016-17 are as follows:
1. I Media Corp Limited (IMCL)
IMCL which is housing the event business of the Company recorded a total income of Rs.9.1 million and EBIDTA Loss of Rs. 0.6 million for the year under consideration. Thissubsidiary functions in co-ordination with radio division and carries out events across MyFM station cities.
During the year under review your Company has diluted its entire shareholding in IMCLto DB Infomedia Pvt. Ltd. (DBIPL) for a lumpsum consideration thereby making it astep-down subsidiary of your Company and a wholly-owned subsidiary of DBIPL.
2. DB Infomedia Pvt. Ltd. (DBIPL)
DBIPL carries its business in the domain of online digital space. As the Company wasincorporated during the last quarter of FY 2014-15 its operations involved only settingup activities with EBIDTA loss of Rs. 19 million in the current financial year as comparedto EBIDTA Loss of Rs. 42 million during the previous period from 16thFebruary 2015 to 31st March 2016.
During the year your Company consolidated its shareholding held in DBIPL by purchaseof 5000 shares from the minority shareholder. The said purchase was in accordance withthe terms of Share Subscription and Shareholders' Agreement dated 16th April 2015executed by the Company with the minority shareholder and DBIPL. Consequent to thepurchase DBIPL has become wholly-owned subsidiary of your Company.
As reported earlier DBIPL has become Holding Company of IMCL by virtue of acquisitionof the entire shareholding of IMCL from your Company for a lumpsum consideration.
During the year under review the Board of Directors of DBIPL in compliance with theprovisions of Sections 42 55 and 62 of the Companies Act 2013 read with rules madethereunder allotted 680000 (Six Lakh Eighty Thousand) 7.5% Redeemable Preference Sharesof face value of Rs. 100/- (Rupees One Hundred) each aggregating to Rs. 68000000/-(Rupees Six Crore Eighty Lakh Only) on private placement basis to your Company. The saidallotment was made in order to mobilise funds for the general business purposes of DBIPL.
As per the terms of Share Subscription and Shareholders' Agreement executed by yourCompany with DBIPL and the minority shareholder the Company had subscribed to 1000000(Ten Lakh) 0.01% Compulsorily Convertible Debentures (CCDs) of Rs. 10/- each. As per theterms of issue the said CCDs were converted into equivalent number of equity shares andaccordingly 1000000 equity shares of face value of Rs. 10/- each were allotted to yourCompany by the Board of DBIPL.
Composite Scheme of Arrangement and Amalgamation between I Media Corp Limited(Transferor Company) DB Infomedia Private Limited (Demerged Company / Transferee Company)and D. B. Corp Limited (Resulting Company)
During the year under review upon recommendations of the Audit Committee the Board ofDirectors at its meeting held on 19th January 2017 approved a Composite Scheme ofArrangement and Amalgamation between your Company and its subsidiaries; I Media CorpLimited (IMCL / Transferor Company) and DB Infomedia Private Limited (DBIPL / DemergedCompany / Transferee Company). Under this Composite Scheme IMCL was proposed to beamalgamated into DBIPL and thereafter the Internet Business of DBIPL was to be hived-off/ demerged into your Company. The said Composite Scheme was approved by the Board ofrespective subsidiary companies as well.
However at the meeting held on 18th May 2017 the Board of Directors uponrecommendation of the Audit Committee re-evaluated the validity of the above Scheme andcame to the conclusion that in light of the current business environment the proposedComposite Scheme will no longer give any extra benefits to the Company and itsstakeholders. Hence a decision was taken to withdraw the Composite Scheme of Arrangementand Amalgamation as aforesaid and not to be acted upon further.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of the Listing Regulations is given separatelywhich may be taken as forming a part of this Report.
REPORT ON CORPORATE GOVERNANCE
A report on Corporate Governance as stipulated under Regulation 34 read with Schedule Vof the Listing Regulations is given separately which may be taken as forming a part ofthis Report. A Certificate as prescribed from the Auditors of the Company confirmingcompliance with the provisions of Corporate Governance is attached to the said Report.
BUSINESS RESPONSIBILITY REPORT
A report on Business Responsibility as stipulated under Regulation 34 of the ListingRegulations is given separately which may be taken as forming part of this report.
EMPLOYEES' STOCK OPTION SCHEMES
The Company had granted Stock Options to its employees under the DBCL - ESOS2008' DBCL ESOS 2010' and DBCL ESOS 2011' (Tranches 1 to 5).The Compensation Committee of the Board of Directors constituted in accordance with theSEBI Guidelines administers and monitors these schemes. The stock option schemes are incompliance with Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 ("Employee Benefits
Regulations") and there have been no material changes to these schemes during thefinancial year.
The details required to be disclosed in terms of Regulation 14 of the Employee BenefitsRegulations are placed on the Company's website and can be accessed at: http://investor.bhaskarnet.com/pages/corporategovernance.php?id=6
Your Company has obtained a certificate from the Auditors certifying that the saidEmployee Stock Option Schemes have been implemented in accordance with the EmployeeBenefits Regulations and the resolutions passed by the members in this regard. TheCertificate will be placed at the Annual General Meeting for inspection by the members asprescribed which is also attached to this Report.
Section 139(2) of the Companies Act 2013 read with the Companies (Audit &Auditors) Rules 2014 as amended states that no listed company can appoint an audit firmfor more than two terms of five consecutive years. The Rules also lay down thetransitional period that can be served by the existing auditors depending on the number ofconsecutive years for which an audit firm has been functioning as auditor in the samecompany. The incumbent auditors M/s. S. R. Batliboi & Associates LLPChartered Accountants Mumbai (Firm Registration No. 101049W/E300004) and M/s.Gupta Navin K. & Co Chartered Accountants Gwalior (Firm Registration No. 006263C)have served the Company for over 10 years before the Companies Act 2013 was notified andwill be completing the maximum number of years of transitional period (3 years) at theensuing AGM.
Accordingly the existing Joint Statutory Auditors of the Company viz. M/s. S. R.Batliboi & Associates LLP and M/s. Gupta Navin K. & Co. will retire at theforthcoming Annual General Meeting and they do not seek re-appointment for the nextfinancial year.
In place of the retiring Auditors the Board of Directors recommends the appointment ofM/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016)and M/s. Gupta Mittal & Co. (Firm Registration No. 009973C) as the new Joint StatutoryAuditors of the Company to assume office from the conclusion of ensuing 21st AnnualGeneral Meeting till the conclusion of 26th Annual General Meeting (subject toratification by the shareholders at every Annual General Meeting as prescribed).
The proposed Joint Statutory Auditors viz. M/s. Price Waterhouse Chartered AccountantsLLP and M/s. Gupta Mittal & Co. have confirmed that their appointment if approved bythe members would be within the prescribed limits under Section 139 of the Companies Act2013 and that they are not disqualified for appointment within the meaning of Section 139of the said Act.
Necessary resolution for the appointment of Statutory Auditors is included in theNotice convening the 21st Annual General Meeting for seeking the approval of the membersof the Company. The Board recommends their appointment.
The Auditors' Report does not contain any qualifications reservations or adverseremarks.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. Makarand M. Joshi & Company a firm of Company Secretaries inPractice to undertake the secretarial audit of the Company.
Secretarial Auditors' report
The Secretarial Audit Report given by the Secretarial Auditor is attached asAnnexure D' to this Report.
The Secretarial Auditor of the Company has in its report observed that the Company wasnot in compliance with Section 149 of the Companies Act 2013 read with Companies(Appointment and Qualification of Directors) Rules 2014 with regard to appointment ofwoman director on the Board of Directors of the Company for the period from 1st April2016 to 21st June 2016.
In this regard the Company would like to clarify that the default in appointment wason account of non-receipt of mandatory approval from the Ministry of Information andBroadcasting (MIB'). Since this approval has to be prior and had not been receivedsince long the Board was not able to appoint a Woman Director in spite of identificationof the candidate. Consequent to receipt of approval from MIB Ms. Anupriya Acharya wasappointed as an Additional Independent Director w.e.f. 22nd June 2016.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended the cost accounting records maintained by theCompany in respect of its radio business are required to be audited. The Board ofDirectors has on the recommendation of the Audit Committee appointed M/s. K. G. Goyal& Associates Cost Accountants (Firm Registration No. 000024) to audit the costaccounting records of the Company for the financial year 2016- 17 at a remuneration of Rs.25000/- p.a. plus applicable taxes.
M/s. K. G. Goyal & Associates Cost Accountants are also re-appointed by theCompany as Cost Auditors for the FY 2017-18 at the same remuneration. As requiredunder the Act the remuneration payable to the cost auditor is required to be placedbefore the members in a general meeting for their ratification. Accordingly a resolutionseeking member's ratification for the remuneration payable to M/s. K. G. Goyal &Associates for FY 2016-17 & FY 2017-18 is included in the Notice convening the AnnualGeneral Meeting.
During the year under review your Company has not accepted or invited any depositsfrom public within the meaning of Chapter V of the Companies Act 2013 and applicablerules made there under or any amendment or re-enactment thereof.
PARTICULARS OF REMUNERATION TO EMPLOYEES
The particulars of remuneration to directors and employees and other relatedinformation required to be disclosed under Section 197(12) of the Companies Act 2013 andthe Rules made thereunder as amended up to date are given in Annexure E' to thisReport.
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy
(I) Steps taken or impact on conservation of energy:
The Company has continued its efforts to improve energy efficiency measures with morevigor and depth. Steps taken during the year to conserve energy include:
1. Conduct of energy audits at 22 print locations to identify opportunity areas inenergy conservation.
2. Migration to LED lights at 43 offices across India thereby resulting in energysavings of 1597934 KWH.
3. Migration of desktops to Thin Clients at various business locations therebyresulting in savings of 3616 KWH of energy.
(II) Steps taken by the Company for utilising alternate sources of energy:
In order to utilize the renewable energy source the Company is exploring thepossibility of installing solar power plants at its major plants.
(III) Capital investment on energy conservation equipments:
During the year the Company has invested Rs. 5 million on migration to LED lights at43 offices across India.
B. Technology Absorption
(I) Efforts made towards technology absorption:
1. Complete migration to use of chemistry free printing plates.
2. Hired Ernst & Young (EY) as Consultant to study the complete IT landscape andsuggest the futuristic architecture and investment in upcoming technologies.
3. Adopted Cloud technologies and reduced In Prem Infra migrated In Prem Mailingserver to enterprise google mail and adopted Google Suite for collaboration.
(II) Benefits derived like product improvement cost reduction product development orimport substitution:
1. Conservation of water and energy.
2. No disposal of polluting effluents to mother earth.
Matrix workflow enabled in mobile using Google Speech API. 1250 journalists now usetheir speech instead of typing with 97% accuracy in Hindi.
4. QlikView - AS BI Tool
Developed dashboards for Sales Finance and Production verticals using data from asingle source which is SAP.
All processes of all modules were automated this year in compliance of IFCrequirements.
(III) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year):
1. The details of technology imported: The Company has not imported any technologyduring the last three financial years.
2. The year of import: Not applicable
3. Whether the technology has been fully absorbed: Not applicable
4. If not fully absorbed areas where absorption has not taken place and the reasonsthereof: Not applicable
(IV) Expenditure on R & D:
C. Foreign Exchange Earnings and Outgo
Your Company earned Foreign Exchange of Rs. 391 million (Previous Year Rs. 321million). The financial expenses in foreign exchange during the year was Rs. 16million (Previous Year Rs. 13 million) and on account of travelling and other expenses wasRs. 115 million (Previous Year Rs. 102 million).
DEMAT SUSPENSE ACCOUNT
Your Company reports that 217 shares issued and allotted in January 2010 to 5shareholders under the public issue of the Company have remained unclaimed and are lyingin the Demat Suspense Account' as prescribed under Schedule V of the ListingRegulations. The Company had sent reminders to all these five shareholders at their latestavailable addresses. Voting rights on the 217 shares will remain frozen till the rightfulowners of these shares claim the shares.
The following disclosure is made as prescribed in this regard:
|(i) Aggregate number of shareholders and the outstanding shares in the suspense account lying as on 1st April 2016 ||5 shareholders / 217 shares |
|(ii) Number of shareholders who approached the Company for transfer of shares from suspense account during the financial year 2016-17 ||Nil |
|(iii) Number of shareholders to whom shares were transferred from suspense account during the financial year 2016-17 ||Nil |
|(iv) Aggregate number of shareholders and the outstanding shares in the suspense account lying as on 31st March 2017 ||5 shareholders / 217 shares |
MATERIAL CHANGES/COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
As reported above upon recommendation of the Audit Committee the Board of Directorsat the meeting held on 18th May 2017 decided to withdraw the Composite Scheme ofArrangement and Amalgamation between your Company and its subsidiaries; I Media CorpLimited (IMCL / Transferor Company) and DB Infomedia Private Limited (DBIPL / DemergedCompany / Transferee Company) which was earlier approved by the Board on 19th January2017. Accordingly the scheme will not to be acted upon further.
Your Directors state that no disclosure is required in respect of the following mattersas there were no transactions in relation thereto during the year under review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of sweat equity shares.
3. Non-exercise of voting rights directly by the employees in respect of sharespurchased under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) ofCompanies (Share Capital and Debentures) Rules 2014.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant and material orders passed by the Regulators / Courts /Tribunals which would impact on the going concern status of the Company and its futureoperations.
POLICY REGARDING PREVENTION OF SEXUAL HARRASSMENT AT WORK PLACE
During the year 2 complaints about sexual harassment were received by the Companywhich were attended to and closed on priority.
No. of complaints received : 2 No. of complaints disposed off : 2
No. of complaints pending at the end of the year : Nil
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The focus of people agenda in FY 2016-17 was grooming the in-house talent retention ofkey personnel and building talent pipeline for the future. With an intent of grooming thein-house talent and building future pipeline Talent Management initiativesMILE' and EDGE' were introduced which helped in providing career advancementopportunities to the in-house talent and reducing attrition. Under these initiativesemployees were nominated to some of the best educational institutes in the Country likeISB and IIMs. IIM Ahmedabad was also engaged to conduct couple of customised programmesfor Ad Sales function.
To strengthen the implementation and making the execution of HR processes peoplefriendly implementation of Success Factors was initiated.
With more than 11000 people on board your Company continues to remain one of thelargest employer in the Media Sector in the Country. It continued to touch employees'lives through our unique policies like Shubh Laxmi' Saubhagyawati Bhav' andSparsh'.
The initiatives taken in FY 2016-17 for building talent pipeline and retention willform the major HR agenda for the next year as well.
Your Directors take this opportunity to express their appreciation to the InvestorsBanks Financial Institutions Clients Vendors Central and State Governments and otherregulatory authorities for their assistance continued support co-operation and guidance.
For and on behalf of the Board of Directors of
D. B. Corp Limited
|Sudhir Agarwal ||Pawan Agarwal |
|Managing Director ||Dy. Managing Director |
|DIN: 00051407 ||DIN: 00465092 |
|Place: Mumbai || |
|Date: 18th May 2017 || |
|Encl.: Annexure A to E || |