Your Directors have pleasure in presenting the Twenty Eight Annual Report and auditedfinancial statements of the Company for the financial year ended March 312016.
The financial performance of the Company for the year ended March 312016 as comparedto the previous financial year ended March 312015 is summarized as under:-
| || || || ||(Rs in Million) |
| ||Year ended 31.03.2016 ||Year ended 31.03.2015 ||Year ended 31.03.2016 ||Year ended 31.03.2015 |
| || |
|Business Income ||4286.98 ||4293.02 ||5657.65 ||5712.77 |
|Other Income ||54.53 ||46.28 ||113.59 ||148.58 |
|Total Income ||4341.51 ||4339.30 ||5771.24 ||5861.35 |
|Profit/(Loss) before exceptional and extraordinary items and tax ||(210.59) ||(58.82) ||(681.04) ||(132.40) |
|Exceptional items ||- ||78.08 ||- ||78.08 |
|Current Tax ||5.51 ||3.74 ||79.62 ||101.78 |
|Deferred Tax write down ||- ||112.39 ||(4.28) ||152.30 |
|Tax for earlier years ||- ||2.72 ||- ||(4.29) |
|Profit/(Loss) after Tax ||(216.10) ||(255.75) ||(756.38) ||(460.27) |
|Share of minority ||- ||- ||(191.65) ||(3.32) |
|Share in Profit/(Loss) of associate ||- ||- ||16.53 ||16.63 |
|Profit /(Loss) for the year carried to Reserves and Surplus ||(216.10) ||(255.75) ||(548.20) ||(440.32) |
|Balance Profit/(Loss) brought forward from previous year ||(1993.37) ||(1737.62) ||(2497.76) ||(2057.44) |
|Balance as at the end of the year ||(2209.47) ||(1993.37) ||(3045.96) ||(2497.76) |
|Earning Per Share ( Rs ) ||(3.35) ||(3.97) ||(8.50) ||(6.83) |
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard - 21 on Consolidated Financial Statements readwith Accounting Standard - 23 on Accounting for Investments in Associates in ConsolidatedFinancial Statements and Accounting Standard - 27 on Financial Reporting of Interests inJoint Ventures the audited consolidated financial statements are provided in the AnnualReport.
A detailed review of the Companys operations has been provided in the ManagementDiscussion and Analysis Report in terms of Regulation 34 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 which forms part of this Report.
In view of the loss no dividend has been recommended for the financial year 2015-16.
The Company has not accepted/renewed any deposits from the public during the year.
CORPORATE SOCIAL RESPONSIBILITY
In view of the loss incurred provisions of Section 135 of the Companies Act 2013relating to incurring expenditure on Corporate Social Responsibility are not applicableto the Company. However as a responsible corporate the Company has taken variousinitiatives for the benefit of the society and various other stakeholders the details ofwhich are provided in this Report as Annexure 1.
The Company has complied with the corporate governance requirements as stipulatedunder the various regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and the Companies Act 2013. A report on Corporate Governance along withcertificate on its compliance forms a part of the Annual Report.
SUBSIDIARIES AND ASSOCIATE COMPANIES
During the year under review the Company alongwith its subsidiary NDTV ConvergenceLimited had set up various online ventures including ventures in digital transactions inthe auto gadgets food wedding and arts space. Details of subsidiaries set up during theyear have also been mentioned in MGT-9 which forms a part of this Report.
A report on performance and financial position of each of the subsidiaries andassociate company in prescribed format AOC-1 under Companies Act 2013 is provided in theconsolidated financial statement of the Company.
The Companys policy on "material subsidiary" is placed on theCompanys website and can be accessed at http://www.ndtv.com/material-subsidiarv-policv
PARTICULARS OF LOANS INVESTMENTS GUARANTEES AND SECURITY PROVIDED
Details of loans guarantees investments and security provided pursuant to theprovisions of Section 186 of the Companies Act 2013 are provided in notes forming partof the standalone financial statements.
DETAILS OF BOARD MEETINGS
During the financial year under review five meetings of the Board of Directors wereheld details of which have been provided in the Corporate Governance Report. A calendarof meetings for every year is prepared and circulated in advance to the Directors.
Composition of Audit Committee of the Board is provided in the Corporate GovernanceReport which forms part of the Annual Report. All the recommendations made by the AuditCommittee were accepted by the Board.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Dr. Prannoy Roy Executive Co-Chairperson is liable to retireby rotation at the ensuing Annual General Meeting (AGM) and being eligible offer himselffor re-appointment.
During the year under review Mr. Kaushik Dutta and Mr. John Martin OLoan havebeen appointed as Additional Directors to hold office as Independent Directors of theCompany with effect from January 15 2016 and February 15 2016 respectively after thereceipt of approval from Ministry of Information & Broadcasting subject to theapproval of the members of the Company. Approval of the members is being sought forappointment of Mr. Kaushik Dutta and Mr. John Martin OLoan as Independent Directorsin the notice of the ensuing AGM.
During the year under review the shareholders through postal ballot also have approvedthe re-appointment of Mr. K.V.L. Narayan Rao as Executive Vice-Chairperson and Mr.Vikramaditya Chandra as Group CEO & Executive Director of the Company respectivelywith effect from April 012016.
Brief resume / details regarding Directors proposed to be appointed / re-appointed asabove are furnished in the Notice of the AGM.
Mr. Amal Ganguli Mr. Vijaya Bhaskar Menon Ms. Indrani Roy Mr. Kaushik Dutta and Mr.John Martin OLoan are the Independent Directors of the Company.
The Company has received declaration of independence in accordance with the provisionsof Section 149(6) of the Companies Act 2013 and Regulation 16 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The details of familiarisationprogram for Independent Directors are available on the website of the Company at: http://www.ndtv.com/details-of-familiarisation-proaramme.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3) & (5) of the Companies Act 2013your Directors state that:
a) in the preparation of the annual accounts for the financial year ended March312016 the applicable accounting standards have been followed and proper explanationsprovided relating to material departures if any;
b) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the financial year 2015-16 and of theloss of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts for the financial year ended March 312016 have been prepared ona going concern basis;
e) internal financial controls were followed by the Company and they are adequate andare operating effectively; and
f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
In terms of Section 134 of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has an Internal Control Systemcommensurate with the size scale and complexity of its operations. To maintain itsobjectivity and independence the Internal Auditors report to the Audit Committee of theBoard.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system its compliance with operating systems accounting procedures and policiesin the Company. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby further strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee from time to time.
The Company has in place adequate internal financial controls commensurate with thesize and scale of the operations of the Company. During the period under review suchcontrols were tested and no reportable material weakness in the design or operations wereobserved.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism/Whistle Blower Policy. The mechanism under the Policyhas been communicated within the organisation. The objective of this mechanism is toeliminate and help to prevent malpractices to investigate and resolve complaints takeappropriate action to safeguard the interests of the Company and to ensure thatwhistleblower is protected. The Company has appointed an Independent Ombudsman for thepurpose of reporting enforcing and monitoring the Whistle Blower Policy and procedures.The details of the Vigil Mechanism have been provided in the Corporate Governance Reportand are also available on the website of the Company at: http://www.ndtv.com/viail-mechanism.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of its committees. The performance of individual directors was evaluated onparameters such as level of engagement and contribution independence of judgmentsafeguarding the interest of the Company and its minority shareholders time devoted etc.
RELATED PARTY TRANSACTIONS
All Transactions with related parties were in the ordinary course of business and on anarms length pricing basis and were approved by the Audit Committee. Details ofrelated party transactions have been disclosed in notes to the financial statements.
There were no transactions which could be considered material in terms of the Company'sPolicy on materiality of related party transactions. Further there were no transactionsthat were required to be reported in form AOC 2.
The policy on related party transactions has been placed on the website of the Companyat: http://www.ndtv.com/related-partv-transaction-policv.
RISK MANAGEMENT POLICY
Pursuant to Regulation 17(9) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has adopted a risk management policy and identified risksand is taking appropriate steps for their mitigation. The details of the Risk ManagementPolicy of the Company are available on the website of the Company at: http://www.ndtv.com/risk-manaaement-policv.
AUDITORS AND AUDITORS REPORT
The Auditors of the Company M/s. B S R & Associates LLP Chartered Accountants(FRN: 116231W/W-100024) hold office until the conclusion 32nd Annual GeneralMeeting (AGM) of the Company subject to ratification of their appointment by the Membersof the Company at every AGM.
The Auditors have confirmed their eligibility to the effect that ratification of theirappointment if made would be within the prescribed limit under the Companies Act 2013and that they are not disqualified for ratification of their appointment. The Board ofDirectors on recommendation of the Audit Committee propose the ratification of appointmentof M/s. B S R & Associates LLP Chartered Accountants as Statutory Auditors of theCompany at the forthcoming AGM.
The notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors Report tothe Members for the year under review does not contain any qualification reservation oradverse remark.
Pursuant to the provisions of the Companies Act 2013 the Board has appointed M/sHemant Singh & Associates a firm of Company Secretaries in Practice to conductSecretarial Audit of the Company for the financial year 2015-16. The Secretarial AuditReport is attached as Annexure 2 to this Report. The Report does not contain anyqualification reservation or adverse remark.
NOMINATION AND REMUNERATION POLICY
The Company has adopted a Nomination & Remuneration Policy attached as Annexure 3to this Report.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134 of the Companies Act 2013 read with Rule 12of the Companies (Management and Administration) Rules 2014 extract of annual return inForm MGT 9 is attached as Annexure 4 to this Report.
DETAILS OF ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
1. Tax Demand
During the financial year 2013-14 the Company had received an assessment order for taxdemand of Rs 450 crores for the Assessment Year (AY) 2009-10 against which it had filedan appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT had granted a stay onrecovery of the tax demand for a period of one year. Since the ITAT didnt havepowers to extend the stay beyond one year the Company was constrained to file a WritPetition before the Honble High Court of Delhi (Court) on March 212015 forextension of stay and the Honble Court was pleased to continue the stay till thefinal disposal of the appeal by the ITAT.
The ITAT from time to time has directed the Tax Department that no further adjournmentswill be granted in the matter. The matter is still pending before ITAT.
The Department had also filed an application before the Hon'ble Court seekingmodification of its earlier order of stay on recovery and seeking adjustment of refund ofAY 2008-09 against the demand of AY 2009-10. The Hon'ble Court had dismissed theDepartments application and directed it to process the Companys refundapplication within two weeks of the Company filing a representation.
Despite the Court's directions the Department on September 14 2015 passed an orderfor provisionally attaching the refund due to the Company apart from its othernon-current assets. The Honble Court on a Writ Petition filed by the Company stayedthe operation of this Order. The matter is pending for hearing.
Fresh Tax Demand of Rs 47.27 Crores pertaining to AY 2007-08
In April 2016 the Company received a fresh order raising a tax demand of Rs 47.27crores from the Income Tax Department pertaining to AY 2007-08 calling an investment ofUS$ 20 Million by M/s Fuse+Media Holding LP (Fuse+Media) a wholly owned subsidiary ofM/s. Velocity Interactive Group in NDTV Networks Plc. (NNLPC) erstwhile subsidiary of theCompany as a "sham transaction". This follows an earlier similar order for AY2009-10 calling the investment by NBCU - a subsidiary of General Electric - also a"sham transaction". Fuse+ Media Group is a respected and leading Silicon Valleyinvestment company and continues to be invested in NDTV Group till date.
Based on the legal advice received from senior counsel the Company strongly believesthat the said order is untenable and misconceived. The Company has filed an appeal againstthe order alongwith the stay application. The matter is pending for hearing.
2. PROCEEDINGS BEFORE THE SECURITIES APPELLATE TRIBUNAL (SAT)
During the previous year the Company had received a show cause notice from SEBI foralleged violation of clause 36 of the listing agreement regarding non-disclosure ofalleged tax demand of Rs 450 Crores as detailed above. SEBI had then passed an Order underSection 23A and Section 23E of the Securities Contracts (Regulation) Act 1956 levying apenalty of Rs 2 crores on the Company. The Company has filed an appeal with SAT againstthe said Order.
The SAT has granted ad interim relief in favour of the Company directing that SEBIshall not take any coercive action till the final disposal of the appeal. The matter ispending before SAT.
3. MATTERS BEFORE COMPANY LAW BOARD
The Company and its subsidiary had suo-moto made compounding applications beforeHonble Company Law Board under the provisions of section 185 of the Companies Act2013. The matters were heard by the Honble Board and minimum possible compoundingcost was charged and paid.
4. CAPITAL REDUCTION PETITION FILED BY THE COMPANY IN 2013
The Company had filed a Petition before the Honble High Court at Delhi (Court) onDecember 9 2013 to allow reduction of reserves from its Securities Premium Account tooffset certain losses incurred. The matter is pending before the Court.
5. SHOW CAUSE NOTICE ISSUED BY THE ENFORCEMENT DIRECTORATE
During November 2015 the Company three of its executive Directors and NDTV StudiosLtd. (erstwhile subsidiary of the Company since merged with the Company) received a showcause notice ("SCN") from the Enforcement Directorate ("ED") as to whyadjudication proceedings should not be held for alleged contraventions of provisions underForeign Exchange Management Act 1999 and regulations made thereunder. As per SCN thecontraventions are in respect of investments into Indian subsidiaries made by overseassubsidiaries of the Company during the previous period.
The Company had filed its reply to the SCN with ED. In best interest of theshareholders of the Company; for saving time cost and to quickly close the matter toavoid protracted litigation the Company had filed an application with the Reserve Bank ofIndia for compounding of the contraventions alleged in the SCN which if at all aretechnical or procedural in nature.
EMPLOYEE STOCK PURCHASE SCHEME 2009 (ESPS - 2009)
The Company had instituted the Employee Stock Purchase Scheme 2009 (the"Scheme") in accordance with the SEBI Guidelines for employees of the Companyand its subsidiaries by allotting shares thereunder. The Scheme was approved by theshareholders of the Company on March 10 2009 through postal ballot. During thefinancial year ended March 31 2016 there have been no issue allotment and exercise ofshares under the Scheme and no material changes have taken place in the Scheme. The Schemeis in compliance with SEBI (Share Based Employee Benefits) Regulations 2014 and thedetails are also placed on the website of the Company at http://www.ndtv.com/aam2016. The Schemeprovides for issue and allotment of not exceeding 2146540 Equity Shares to the eligibleemployees of the Company and its subsidiaries by the ESOP & ESPS Committee at anexercise price of Rs 4/- each.
Disclosures in compliance with SEBI Guidelines as amended are set below:
|S. No. PARTICULARS ||DETAILS |
|1. The details of the number of shares issued under the Scheme ||1753175 Equity Shares (11250 Equity Shares have been reversed in previous year) |
|2. The price at which such shares are issued ||Exercise price Rs 4/- per share |
|3. Employee - wise details of the shares issued/allotted to: || |
|(a) Senior Managerial Personnel; ||During the year under review NIL equity shares were issued /allotted to the senior management personnel of the Company. |
|(b) Any other employee who is issued / allotted shares in any one year amounting to 5% or more shares issued / allotted during that year; ||No employee is in receipt of the issued / allotted equity shares in any one year amounting to 5% or more equity shares issued / allotted during that year except the following: |
| ||Name of Director / Employee ||No. of Equity Shares issued / allotted during the year 2009-10 |
| ||Mr. K.V.L. Narayan Rao ||137500 |
| ||Ms. Smeeta Chakrabarti ||116700 |
| ||Total ||254200 |
|(c) Identified employees who were issued shares during any one year equal to or exceeding 1% of the issued capital of the Company at the time of issuance. ||There is no employee who has been issued equity shares during one year equal to or exceeding 1% of the issued capital of the Company at the time of issuance. |
|4. Diluted Earning Per Share (EPS) pursuant to issuance of shares under the Scheme ||Since there is no issue of share during the FY 201516 hence it is not applicable. |
|5. Consideration received against the issuance of shares ||No shares were issued during the year. |
|6. Loan repaid by the trust during the year from exercise price received ||N.A. |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with Section 134(3) (m) of the Companies Act 2013 read with the Rule 8of the Companies (Accounts) Rules 2014 the following information is provided as under:
A. Conservation of Energy
Your Company is not an energy intensive unit however regular efforts are made toconserve energy. Some of the steps taken by the Company towards energy conservation are asunder:
Adoption of LED light technology in studios and office premises to reduce thepower consumption;
Adoption of VRV technology for air-conditioning in office areas to reduceelectricity consumption; and
Installation of motion sensors in all cabins to switch off lights andair-conditioners.
B. Technology Absorption (Research and Development)
The Company continuously makes efforts towards research and developmental activitieswhereby it can improve the quality and productivity of its programs.
C. Foreign Exchange Earnings and Outgo
During the year under review the Company had foreign exchange earnings of Rs 350.67million (previous year Rs 231.58 million). The foreign exchange outgo on subscriptionuplinking and news service travelling consultancy and professional fees repairs andmaintenance distribution and marketing fees and other expenses amounted to Rs 154.66million (previous year Rs 178.25 million). Outgo on account of capital goods and otherswas Rs 18.49 million (previous year Rs 31.31 million).
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Company Act 2013 (Act) read with Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are provided in the prescribedformat and annexed herewith marked as Annexure 5 to this Report.
The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate annexure forming part of thisReport. Further the Report and the accounts are being sent to the members excluding theaforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection at the Registered Office of the Company during office hours between 1.00 pmand 3.00 pm on all working days excluding Saturdays prior to the date of the AnnualGeneral Meeting. Any shareholder interested in obtaining a copy of the same may write tothe Company Secretary.
There have been no material changes and commitments which can affect the financialposition of the Company between the end of the financial year and the date of this Report.
Statutory Auditors of the Company have not reported incident related to fraud duringthe financial year 2015-16 to the Audit Committee or Board of Directors under section143(12) of the Companies Act 2013.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
NDTV group has in place an Anti-Sexual Harassment Policy in compliance with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. During the period under review threecomplaints were received by the ICC and the same were resolved after due process withinthe prescribed time.
Your Directors acknowledge with thanks the support and co-operation extended by theInvestors Bankers Business Associates and employees at all levels for their valuablepatronage.
| ||For and on behalf of the Board |
| ||Dr. Prannoy Roy |
| ||Executive Co- Chairperson |
| ||DIN : 00025576 |
|Place: New Delhi ||Radhika Roy |
|Date: May 9 2016 ||Executive Co- Chairperson |
| ||DIN : 00025625 |