Entertainment Network (India) Ltd.
|BSE: 532700||Sector: Media|
|NSE: ENIL||ISIN Code: INE265F01028|
|BSE 15:40 | 22 Mar||689.95||
|NSE 15:29 | 22 Mar||690.00||
|Mkt Cap.(Rs cr)||3,289|
|Mkt Cap.(Rs cr)||3288.99|
Entertainment Network (India) Ltd. (ENIL) - Director Report
Company director report
Your Directors have pleasure in presenting the Eighteenth Annual Report together withthe audited financial statements of Entertainment Network (India) Limited ['the Company'/'ENIL'/ 'Radio Mirchi'] for the financial year ended March 312017.
The financial statements for the year ended March 31 2017 are the first the Companyhas prepared under Indian Accounting Standards (Ind AS). The financial statements for theyear ended March 312016 have been restated in accordance with Ind AS for comparativeinformation.
The Company has adopted all the Ind AS standards and the adoption was carried out inaccordance with Ind AS 101 - First time adoption of Indian Accounting Standards. thetransition was carried out from Indian Accounting principles generally accepted in Indiaas prescribed under Section 133 of the Companies Act 2013 read with Rule 7 of theCompanies (Accounts) Rules 2014 (IGAAp) which was the previous GAAR Reconciliations anddescriptions of the effect of the transition have been summarized in Note 49 to thefinancial statements.
1. Financial Highlights
' in lakhs
2. Financial Performance Operations and state of the Company's affairs
Your Company took advantage of the Batch-1 auctions under phase-3 policy and grew itsbusiness strongly during FY17. Total income of the Company increased from ' 54286.03lakhs during the previous year to ' 57611.13 lakhs during the year under review. Profitafter tax was ' 5447.40 lakhs.
On a consolidated basis total income of the Company increased from ' 54354.01 lakhsduring the previous year to ' 57680.10 lakhs during the year under review. Profit aftertax was ' 5516.96 lakhs.
The financial performance is discussed in more detail in the Management Discussion andAnalysis Report which forms part of the Annual Report.
The biggest event of FY17 was the Government of India's DeMonetization initiative. Theimmediate impact of the program on the media industry was negative and the impact wasfelt in both Q3 and Q4 of FY17. Your Company also took a hit in both quarters. Howeverbecause of its multiproduct strategy (products other than core radio) your Company wasable to avoid any de-growth in revenues in the months of November 2016 to March 2017.While core radio de-grew marginally the other businesses including Activations ConcertsTv properties Multi-media solutions and Digital together provided growth during thisperiod.
Your Company has been adding new products to its sales portfolio every few years.Concerts is one such product. While concerts as a business was launched in a small way afew years back it got a big thrust in FY17 with the business reporting 100%+ growth.Your Company regards concerts as a major growth area for the future.
In September 2015 your Company had executed a Business transfer Agreement ('BTA') withTv today network Limited ('TVTN') to purchase TVTN's four radio stations in AmritsarJodhpur patiala and Shimla. Your Company has now been operating these stations for morethan one full year. It is extremely heartening to note that the four stations havereported a strong growth in revenues in FY17 resulting in an EBITDA margin of 20%. In H2of FY16 (the first half of our acquisition) we had reported an EBITDA loss of 44.7%. Thissuccessful assimilation of the acquired stations gives us confidence in our ability topursue more acquisition targets in the future.
In August 2016 the Company entered into an Advertising Sales Agreement (ASA) with TVTNin relation to TVTN's remaining three radio stations at New Delhi Mumbai and Kolkata.pursuant to the ASA TVTN has agreed to appoint ENIL as an agent of TVTN with effect fromSeptember 1 2016 to facilitate the sale of TVTN's airtime to third-parties who wish toadvertise using TVTN's airtime.
The Company participated in the 2nd batch of phase-3 auctions held betweenoctober 26 2016 and December 14 2016.
After this batch of auctions the Company acquired licenses in 21 new cities. These areBhavnagar Jamnagar Junagadh Mehsana Bharuch and palanpur in Gujarat Akola andAmravati in Maharashtra Tiruchirapalli and Tirunelveli in Tamil Nadu Rajahmundry inAndhra pradesh Warangal in
Telengana Durg/Bhilai and Raigarh in Chhatisgarh Hubli/Dharwad and Mysuru inKarnataka ujjain in Madhya pradesh Jhansi in uttar pradesh Asansol and Siliguri in WestBengal and the union Territory of puducherry. With these 21 cities the core Mirchi brandwill expand its footprint deeper into strategically important and fast growing cities andstates. Its presence will increase from 43 to 64 cities in India. However since yourCompany has decided to surrender the Goa license the total number of cities will become63.
The total value of bids made by ENIL is ' 51.3 crores. These frequencies are expectedto become operational towards the end of FY18.
The Scheme of Amalgamation and Arrangement ('Scheme') of Times Infotainment Medialimited ['TIME] the holding company of the Company with Bennett Coleman & CompanyLimited ('BCCL') the holding Company of TIML was filed under the Companies Act 1956. TheScheme was approved by the Hon'ble Bombay High Court vide order dated July 3 2015('Order'). The Hon'ble Bombay High Court's approval was however subject to the approval ofthe Ministry of Information & Broadcasting Government of India ('MIB').
The MIB vide its letter dated April 25 2016 (received by the Company on April 262016) accorded its approval to the change in ownership pattern of the Company under theScheme. Consequently TIML's entire shareholding in the Company was transferred to BCCLand BCCL is the sole promoter shareholder of the Company.
In January 2017; the Company issued Unsecured Commercial papers (Cps). The amountraised through issuance of Cps was ' 121.8 crores. The Cps have a tenor of 364 days andwill mature in January 2018. The maturity value of Cps is ' 130 crores. The effectiveyield of the CPs is 6.75% per annum. proceeds from the Cps were used to finance theCompany's business needs.
In March 2017; the Company fully repaid the unsecured Commercial papers (Cps) withmaturity value of ' 270 crores issued to BNp paribas in March 2016.
There were no other material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich this financial statements relate and the date of this Report.
3. T ransfer to reserves
The Company does not propose to transfer any amount to General Reserve out of theamount available for appropriations.
Your Directors are pleased to recommend a dividend @10% i.e. ' 1.00 (Rupee one only)per equity share of ' 10/- each for the financial year ended March 31 2017 aggregating '573.75 lakhs including dividend distribution tax of ' 97.05 lakhs. the dividend payment issubject to the approval of the shareholders at the ensuing Annual General Meeting (AGM).the dividend if declared at the AGM would be paid/ dispatched within thirty days fromthe date of declaration of dividend to those persons or their mandates:
whose names appear as beneficial owners as at the end of the business hours onAugust 23 2017 in the list of the Beneficial owners to be obtained from the Depositoriesi.e. National Securities Depository Limited [NSDL] and Central Depository Services (India)limited [CDSL] in respect of the shares held in electronic/ dematerialized mode; and
whose names appear as Members in the Register of Members of the Company as onAugust 23 2017 after giving effect to valid share transfers in physical forms lodged withthe Company/ Registrar & Share transfer Agents in respect of the shares held inphysical mode.
5. Deposits from public
the Company has not accepted any deposits from public and therefore the detailsrelating the deposits covered under Chapter V of the Companies Act 2013 are not requiredto be furnished.
6. Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act 2013 read with the applicablerules thereto including any statutory modification(s) or reenactment thereof for the timebeing in force ('the Act') Mr. Prashant Panday (DIN: 02747925) retires by rotation at theensuing AGM and being eligible offers himself for reappointment.
Mr. B. S. Nagesh (DIN: 00027595) resigned from the Board of Directors of the Companyeffective from the close of the business hours on November 8 2016 due to personalcommitments and other pre-occupations. The Board of Directors places on record theirappreciation for the valuable contributions made by Mr. Nagesh.
The Company has received the declarations from all the Independent Directors of theCompany pursuant to the provisions of Section 149 and all other applicable provisions ofthe Act stating that they meet the criteria of independence as provided under the Act andthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ['Listing Regulations'] and that they are not disqualifiedto become directors under the Act; and in the opinion of the Board of Directors all theIndependent Directors fulfill the criteria of independence as provided under the Actrules made thereunder read with the Listing Regulations and that they are independent ofthe management.
Brief resume of the director proposed to be reappointed relevant information includingnature of his expertise in specific functional areas qualifications terms ofappointment details of remuneration names of the companies in which he holdsdirectorships and the memberships/ chairmanships of Committees of the Board hisshareholding in the Company etc. as stipulated under the Listing Regulations andSecretarial Standards has been furnished separately in the Notice convening the AGM readwith the Annexure thereto forming part of this Report.
None of the Directors are related with each other or key managerial personnel (inter-se).
Details of the number of meetings of the Board of Directors and Committees andattendance at the meetings have been furnished in the Report on Corporate Governance.
Following persons are designated as the Key Managerial Personnel (KMP):
Mr. Prashant Panday: Managing Director & CEO
Mr. N. Subramanian: Group CFO
Mr. Mehul Shah: SVP Compliance & Company Secretary
7. Board Evaluation
The Board of Directors is committed to continued improvement in its effectiveness.Accordingly
36 I Entertainment Network (India) Limited the Board participated in the annual formalevaluation of its performance. This was designed to ensure amongst other things that theBoard its Committees and each director continue to contribute effectively.
The Board and its Committees evaluations involved questionnaire-driven discussions thatcovered a number of key areas / evaluation criteria including the roles andresponsibilities size and composition of the Board and its Committees dynamics of theBoard and its Committees and the relationship between the Board and management. Theresults of the reviews were discussed with the relevant Committees and collectively by theBoard as a whole. Feedback was also sought on the contributions of individual directors.Independent directors at their Meeting led by the Chairman of the Nomination &Remuneration Committee conducted the performance review of the Chairman Non-IndependentDirectors and the Board as a whole in respect of the financial year under review.
Formal Annual Evaluation was made in compliance with all the applicable provisions ofthe Act and the Listing Regulations. The Directors were satisfied with the evaluationresults which reflected the overall engagement of the Board and its Committees with theCompany.
8. Board Familiarization Program
At the time of appointment of a new director through the induction process he/ she isfamiliarized with the Company director's roles rights responsibilities in the Companynature of the industry in which the Company operates business model of the Company etc.Detailed presentations are made before the Board Members at the Board and its Committeemeetings covering various areas including business strategy branding programmingfinancial performance and forecast compliances/ regulatory updates audit reports riskassessment and mitigation etc. The details of the familiarization program are availableon the Company's website at: www.enil.co.in at web link: httpy/www. enil. co.in/policies-code-of-conduct.php
9. Policy on directors' appointment and remuneration
the Company's policy on the Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of director and othermatters as provided under Section 178 of the Act is titled as nomination &
Remuneration policy and appended as Annexure A to this Report.
10. Audit committee
the Audit Committee of the Company presently comprises of the following Directors as onthe date of this Report:
Mr. N. Kumar - Chairman (Independent NonExecutive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. Richard Saldanha (Independent NonExecutive Director)
The Internal Auditors of the Company report directly to the Audit Committee. All therecommendations of the Audit Committee were accepted by the Board of Directors. Briefdescription of terms of reference and other relevant details of the Audit Committee havebeen furnished in the Report on Corporate Governance.
11. Vigil Mechanism
The Company has a 'Whistle Blower Policy' / 'Vigil Mechanism' in place. The objectiveof the Vigil Mechanism is to provide the employees directors customers vendorscontractors and other stakeholders of /in the Company an impartial and fair avenue toraise concerns and seek their redressal in line with the Company's commitment to thehighest possible standards of ethical moral and legal business conduct and fair dealingswith all its stakeholders and constituents and its commitment to open communicationchannels. The Company is also committed to provide requisite safeguards for the protectionof the persons who raise such concerns from reprisals or victimization for whistleblowing in good faith. The Board of Directors affirms and confirms that no personnel hasbeen denied access to the Audit Committee. The Policy contains the provision for directaccess to the chairperson of the Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/ Vigil Mechanism is available on the Company's website at: www.enil.coiat http://www . enil. co. in/policies-code-of-conduct.php
12. CSR Committee
The constitution composition quorum requirements terms of reference role powersrights obligations of 'Corporate Social Responsibility Committee [CSR Committee]' are inconformity with the provisions of Section 135 and all other applicable provisions of theCompanies Act 2013 read with the Companies (Corporate Social Responsibility policy)Rules 2014 and all other applicable rules made under the Companies Act 2013 (includingany statutory modification(s) or re-enactment or amendments thereof).
The CSR Committee of the Company presently comprises of the following Directors as onthe date of this Report:
Mr. Vineet Jain (Non- Executive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. prashant panday (Managing Director & CEO)
Mr. B. S. Nagesh - member of the Committee resigned effective from the close of thebusiness hours on November 8 2016.
During the financial year under review the Committee met four times i.e. on May 192016; August 2 2016; November 8 2016 and February 13 2017.
Brief description of terms of reference of the Committee inter alia includes:
To formulate and recommend to the Board of Directors (Board) a Corporate SocialResponsibility (CSR) policy which shall indicate the activities to be undertaken by theCompany as specified in Schedule VII of the Companies Act 2013;
To approve CSR activities;
To recommend to the Board the amount of expenditure to be incurred on the CSRactivities;
To monitor the CSR Policy of the Company from time to time;
To institute a transparent monitoring mechanism for implementation of the CSRprojects or programs or activities undertaken by the Company;
To carry out any other functions as authorized by the Board of Directors fromtime to time or as enforced by statutory/regulatory authorities.
CSR Policy development and implementation:
The CSR Policy is available on the Company's website at www.enil.co.inhttp://www.enil.co.in/policies-code-of-conduct.php
Annual report on CSR activities as required under the Companies (Corporate SocialResponsibility
Policy) Rules 2014 has been appended as Annexure Bto this Report.
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently comprises of thefollowing Directors as on the date of this Report:
Mr. N. Kumar - Chairman (Independent NonExecutive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. Richard Saldanha (Independent NonExecutive Director)
Mr. Vineet Jain (Non- Executive Director)
Brief description of terms of reference and other relevant details of the Nominationand Remuneration Committee have been furnished in the Report on Corporate Governance.
14. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently comprises of thefollowing Directors as on the date of this Report:
Mr. Richard Saldanha - Chairman (Independent Non- Executive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. Prashant Panday (Managing Director & CEo)
Brief description of terms of reference and other relevant details of the StakeholdersRelationship Committee have been furnished in the Report on Corporate Governance.
15. Audit Report
The Audit Report does not contain any qualification reservation or adverse remark.
At the fifteenth AGM held on August 12 2014 the Members had approved the appointmentof S. R. Batliboi & Associates LLP Chartered Accountants (ICAI Firm Registrationnumber - 101049W/ E300004) as the statutory auditors of the Company to hold the officefrom the conclusion of the fifteenth AGM till the conclusion of the sixth consecutive AGMcommencing from the AGM wherein such appointment was made. As per the provisions ofSection 139 of the Act the Company shall
place the matter relating to such appointment for ratification by members at every AGM.Accordingly the appointment of S. R. Batliboi & Associates LLP CharteredAccountants as the statutory auditors of the Company is placed for ratification by themembers of the Company.
S. R. Batliboi & Associates LLp have furnished a certificate in terms of theCompanies (Audit and Auditors) Rules 2014 and confirmed their eligibility in terms ofSection 141 and all other applicable provisions of the Act read with the applicable rulesthereto.
other relevant information has been furnished at Item No. 5 of the Notice convening theAGM.
17. Secretarial Auditor and report
The Board of Directors had appointed M/s. Hemanshu Kapadia & Associates CompanySecretaries (C. P No: 2285) to conduct Secretarial Audit for the financial year 2016-17.The Secretarial Audit Report for the financial year ended March 31 2017 is appended as AnnexureC to this Report.
the Secretarial Audit Report dated May 4 2017 does not contain any qualification oradverse remark or observation.
18. Cost Auditor and report
the Board of Directors on recommendation of the Audit Committee and pursuant toSection 148 and all other applicable provisions of the Act read with the Companies (Auditand Auditors) Rules 2014 and all other applicable rules made under the Act (including anystatutory modification(s) or re-enactment thereof for the time being in force) hasapproved the appointment and remuneration of the Cost Auditors M/s. R. Nanabhoy &Co. Cost Accountants (Firm registration number- 00010) to conduct the audit of the costrecords of the Company for the financial year ending on March 31 2018. the aforesaidappointment of M/s. R. Nanabhoy & Co. is subject to the relevant notificationsorders rules circulars etc. issued by the Ministry of Corporate Affairs and otherregulatory authorities from time to time. the remuneration payable to M/s. R. Nanabhoy& Co. shall be ' 450000 (Rupees four lakhs fifty thousand only) plus out of pocketexpenses and applicable taxes for the aforesaid audit. the remuneration payable to theCost Auditors is required to be ratified subsequently by the shareholders. Accordingly
consent of the members has been sought for passing the resolution as set out at ItemNo. 6 of the Notice convening the AGM for ratification of the remuneration payable to theCost Auditors for the financial year ending on March 312018.
The Cost Audit Report for the financial year 201516 was filed on August 29 2016. TheCost Audit Report for the financial year 2016-17 will be filed on/ before the due date.
19. Conservation of energy Technology absorption and Foreign exchange earnings andOutgo
the Company is in the business of private FM Radio Broadcasting. Hence most of theinformation required to be provided relating to the Conservation of energy and technologyabsorption is not applicable.
However the information as applicable is given hereunder:
i) Conservation of energy:
the operations of the Company are not energy intensive. Nevertheless continuousefforts such as installation of energy efficient electronic devices implementation ofSops etc. aimed at reducing energy consumption are being made by the Company and itsemployees to reduce the wastage of scarce energy resources.
ii) technology absorption:
the efforts made towards technology absorption and benefits derived like productimprovement cost reduction product development or import substitution:
A lot of new features were added to the Customer Relationship Management (CRM)solution to improve sales efficiency and bring in greater control.
ENIL has adopted efficient use of software and networking facilities to re-usecontent efficiently and ensure good return on investments.
Imported technology (imported during last three years reckoned from thebeginning of the financial year): Nil
the expenditure incurred on Research & Development (R & D): Forayin the Digital Space:
Mirchi continues to grow its online radio reach. We now stream 19 online radio stationsin partnership with Gaana and the listenership across our online stations has grown toover 3 million listeners a month. We added 5 new stations this year - Mirchi Top 20International Hitz Rabindra Sangeet Mirchi Mehfil and Campus Radio. one key developmentfor the online radio streaming business has been the launch of a radio station sponsoredby a Brand - Campus Radio. This sponsorship model offers a better monetization opportunitythan a traditional audio/ banner advertisement model.
Radio Mirchi's digital presence extends beyond online radio to social media andwebsite and it has the biggest digital footprint compared to all other competitors. Westreamed almost 200 million video views on our YouTube channels in FY2017. Radio Mirchihas the biggest social media presence with a fan base of over 4.3 million across Facebookand 3.3 lakhs across Twitter. The website continues to be the #1 radio website in India.
Our digital innovations got a lot of recognition this year - we won a Gold and Silverat the DIGIXX digital awards for innovation in digital marketing and user interfacedesign; and Campus Radio got shortlisted at Abby Awards for marketing innovation.
iii) Foreign exchange earnings and outgo:
The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.
Rs. in lakhs
20. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are appended as Annexure D to this Report.
The Managing Director of the Company does not receive any remuneration or commissionfrom the Company's holding or subsidiary company.
As per the provisions of Section 197 of the Act read with the Rules 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other relevant particulars of the employees drawingremuneration in excess of the limits set out in the said rules forms part of the AnnualReport. As per the first proviso to Section 136(1) of the Act the Annual Report excludingthe aforesaid information is being sent to the members of the Company. The saidinformation is made available for inspection at the Registered Office and Corporate Officeof the Company during working hours for a period of 21 days before the date of AGM. Anymember interested in obtaining such information may write to the Company Secretary and thesame will be furnished on request. The Annual Report is available on the Company's websiteat: www.enil.co.in
21. Extract of Annual Return
Extract of Annual Return of the Company as required under Section 92 of the Act isattached as Annexure Eto this Report in the Form MGT 9.
22. Share Capital & Listing of Securities
During the financial year under review the Company has not issued:
any equity shares with differential rights as to dividend voting or otherwise;
any shares to its employees under the Employees Stock option Scheme;
any Sweat Equity Shares.
The equity shares of the Company are listed and admitted to dealings on BSE Limited(BSE) and National Stock Exchange of India Limited (NSE) since February 15 2006. AnnualListing Fee has been paid to each exchange. As required under the Listing Regulations theCompany has executed the Uniform Listing Agreement with BSE and NSE.
23. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34 of the Listing Regulations is set out in a separate sectionforming part of this Report.
24. Business Responsibility Report
As per the amendment in the Regulation 34 of the Listing Regulations notified onDecember 22 2015 mandatory reporting of Business Responsibility Report in the AnnualReport is now applicable to the top five hundred listed entities based on marketcapitalization (earlier the mandatory reporting applied only to the top hundred listedentities based on market capitalization). Accordingly the Company has published aseparate Business Responsibility Report ('BRR') for the financial year under review asstipulated under Regulation 34 of the Listing Regulations. BRR is in line with the keyprinciples stated in the 'National Voluntary Guidelines on Social Environmental andEconomic Responsibilities of Business' framed by the Ministry of Corporate Affairs and isattached as Annexure F to this Report.
25. Corporate Governance
The Company is adhering to good corporate governance practices in every sphere of itsoperations. The Company has taken adequate steps to comply with the applicable provisionsof Corporate Governance as stipulated under the Listing Regulations. A separate reporton Corporate Governance is enclosed as a part of this Report along with theCertificate from the Practicing Company Secretary.
26. Directors' Responsibility Statement
Pursuant to the provisions of Section 134 of the Act the Directors hereby confirmthat:
a) in the preparation of the annual accounts for the financial year ended on March 312017 the applicable accounting standards have been followed and that there are nomaterial departures from the same;
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 ended on March 312017 and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and such internalfinancial controls are adequate and operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
27. Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company during thefinancial year under review with related parties were in the ordinary course of businessand on an arm's length basis.
Bennett Coleman & Company Limited ('BCCL') is the holding company and a relatedparty under Section 2(76) of the Companies Act 2013 and Regulation 2(1)(zb) of theListing Regulations. As on date BCCL holds 33918400 equity shares in the Company (i.e.71.15% of the paid up capital of the Company).
Pursuant to the provisions of Section 188 of the Act read with the Companies (Meetingof Board and its Powers) Rules 2014 related party transactions beyond the prescribedthreshold limit require prior approval of the company by a resolution. However if theproposed transactions with the related parties are at arm's length and in its ordinarycourse of business the said approval of the company is not required. Further in terms ofRegulation 23 of the Listing Regulations transaction with a related party shall beconsidered material if the transaction(s) to be entered into individually or takentogether with previous transactions during a financial year exceeds ten percent of theannual consolidated turnover of the company as per the last audited financial statementsof the company.
In order to achieve efficiencies in Ad sales business synergies economics of scaleand also to optimize costs the Company and BCCL have entered into various contracts/arrangements/ transactions relating to the transfer and / or availing of resourcesservices or obligations in the past and propose to continue with such contracts/arrangements/ transactions in the future too.
In compliance with Regulation 23 of the Listing Regulations during the financial yearunder review the Company sought the approval from the Members of the Company by way ofpostal Ballot for the contracts/ arrangements/ transactions entered into and/ or to beentered into with Bennett Coleman & Company limited ('BCCL) the holding companyrelating to the transfer and / or availing of resources services or obligations for theFinancial Year 2016-2017 and subsequent financial years exceeding ten percent but notexceeding twenty five percent of the annual consolidated turnover of the Company as perthe last audited financial statements of the Company relevant for the respective financialyears.
Details of the Material Related party Transactions
i.e. transactions exceeding ten percent of the annual consolidated turnover as per thelast audited financial statements entered during the year by the Company as requiredunder Section 134(3) (h) of the Act (in the Form AoC 2) is attached as Annexure Gtothis Report.
the Company's policy on Materiality of related party transactions and dealing withrelated party transactions is available on the Company's website at: www.enil.coAiat http://www.enil.co.in/policies- code-of-conduct.php
The related party transactions are entered into based on business exigencies such assynergy in operations profitability market share enhancement etc. and are intended tofurther the Company's interests. In accordance with the applicable accounting standardstransactions with related parties are furnished in the financial statements.
28. Dividend Distribution Policy
The Company has formulated a Dividend Distribution Policy as required under theRegulation 43A of the Listing Regulations. The said Policy is appended as Annexure Hto this Report and also uploaded on the Company's website at www.enil . co.in.
29. Particulars of loans given investment made guarantees given and securitiesprovided
The Company has not given any loans guarantees or provided any securities underSection 186 of the Act. Particulars of investments made by the Company during thefinancial year 2016-17 are provided in the financial statements. Please refer to
the Note no. 7 and 11 to the standalone financial statements for details of investmentsmade by the Company.
30. Risk Management
The Board of Directors is entrusted with various key functions including framingimplementing and monitoring the risk management plan for the Company; ensuring theintegrity of the Company's accounting and financial reporting systems including theindependent audit and that appropriate systems of control are in place in particularsystems for risk management financial and operational control and compliance with thelaws and relevant standards.
The Board of Directors has adopted the Risk Management Policy coupled with the EnterpriseRisk Management framework and also established related procedures to inform BoardMembers about the risk assessment and minimization procedures. Major risks are identifiedadequately mitigated continuously and the same are reported to the Audit Committee andBoard of Directors along with the action taken report. Risk Management Policyenvisages assessment of strategic risks operational risks financial risks regulatoryrisks human resource risks technological risks.
Risk Management Policy adopted by the Company involves identification andprioritization of risk events categorization of risks into High Medium and Low based onthe business impact and likelihood of occurrence of risks and Risk Mitigation &Control.
The Audit Committee reviews adequacy and effectiveness of the Company's internalcontrol environment and monitors the implementation of audit recommendations includingthose relating to strengthening of the Company's Risk Management policies systems andprocedures. Internal Audit is carried out by KPMG - the independent Internal Auditors.Internal Audit covers all the radio stations at pan India level and corporate office asper the annual audit plan approved by the Audit Committee. Internal Audit report ispresented to the Audit Committee on regular basis and the Chairman of the Audit Committeebriefs the Board of Directors about the same.
31. Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial
42 I Entertainment Network (India) Limited statements. The Company's internal controlsystems including internal financial controls are commensurate with the nature of itsbusiness and the size and complexity of its operations and same are adequate and operatingeffectively. these systems are periodically tested and no reportable material weakness inthe design or operation was observed. the Audit Committee reviews adequacy andeffectiveness of the Company's internal control system including internal financialcontrols.
32. Consolidated Financial Statements
In accordance with the Companies Act 2013 and applicable accounting standard theaudited Consolidated Financial Statements are provided and form part of the Annual Report.
33. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Company's wholly ownedsubsidiary since 2007. ABSL recorded a total income of ' 68.98 lakhs during the financialyear 2016-17. Profit after tax stood at ' 69.55 lakhs for the financial year under review.
As per Section 129 of the Companies Act 2013 a separate statement containing thesalient features of the financial statements of the Subsidiary Company are attached alongwith the financial statements in the prescribed Form AoC-1. the Company does not have anyassociate company or joint venture. there has been no change in the nature of the businessof the subsidiary.
The Company shall make available the financial statements and the related detailedinformation of its subsidiary to any Member of the Company or its subsidiary who may beinterested in obtaining the same at any point of time and same is also available on thewebsite: www.enil.co.in . these documents will also be available for inspectionduring business hours at the Registered Office and Corporate Office of the Company. TheConsolidated Financial Statements presented by the Company include financial results ofits Subsidiary Company.
The audited financial statements including consolidated financial statements and allother relevant documents required to be attached thereto are available on the Company'swebsite: www.enil.co.in
the policy for determining material subsidiaries is available on the Company's website:
www.enil.co.il at http://www.enil.co.in/policies- code-of-conduct.php
34. Significant or material order
During the financial year under review no significant and material orders were passedby the regulators or courts or tribunals impacting the going concern status and theCompany's operations in future.
35. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
Your Company has always believed in providing a safe and harassment-free workplace forevery individual working in the Company. During the financial year under review nocomplaint pertaining to sexual harassment was reported to the Internal ComplaintsCommittee of the Company.
Your Directors take this opportunity to convey their appreciation to all the memberslisteners advertisers media agencies dealers suppliers bankers regulatory andgovernment authorities and all other business associates for their continued support andconfidence in the management of the Company. Your Directors are pleased to place on recordtheir appreciation of the consistent contribution made by employees at all levels throughtheir hard work dedication solidarity and co-operation and acknowledge that theirefforts have enabled the Company to achieve new heights of success.
For and on behalf of the Board of Directors
Chairman (DIN: 00003962)
pune May 23 2017
Entertainment network (India) limited
4th Floor A-Wing Matulya Centre
Senapati Bapat Marg lower parel (West)
Mumbai - 400 013.