TO THE MEMBERS
Your Directors have pleasure in presenting their 36th Annual Report togetherwith the Audited Accounts of the Company for the year ended 31st March 2017.
1. FINANCIAL PERFORMANCE:
| || || |
(Rs. In Lakhs)
|Particulars || |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Income ||112.24 ||64.79 ||7889.82 ||7871.69 |
|Profit/(Loss) before Finance Cost & Exceptional Items ||(126.73) ||(147.65) ||133.53 ||328.02 |
|Finance Cost ||147.63 ||106.62 ||948.12 ||653.05 |
|Profit/(Loss) after Finance Cost but before Extra-Ordinary Items ||(274.36) ||(254.26) ||(814.60) ||(325.04) |
|Extra-Ordinary Items ||- ||11709.54 ||- ||5489.67 |
|Profit/(Loss) before Tax ||(274.36) ||(11963.80) ||(814.61) ||(5814.71) |
|Tax Expense ||- ||- ||- ||3745.41 |
|Profit/(Loss) after Tax ||(274.36) ||(11963.80) ||(814.61) ||(9560.14) |
During the year under review on a standalone basis revenues of the Company increasedby 73.23% and stood at Rs. 112.24 lacs. The Company posted loss of Rs. 274.36 lacs asagainst Rs. 11963.80 lacs in the previous year. On a consolidated basis your Company'srevenues were stable and stood at Rs. 7889.82 lacs. The Company posted loss of Rs. 814.61lacs as against loss of Rs. 9560.14 lacs in the previous year.
During the previous year the Company had made provision of Rs. 11709.54 lacs onaccount of diminution in the value of its investments in its subsidiary viz. Next RadioLimited ("NRL") as a result of the Scheme of Capital Reduction of NRL beingapproved by the Hon'ble High Court at Bombay. The reduction in loss on a standalone andconsolidated basis as compared to previous year is on account of the aforementioned one-time provision made by the Company in the previous year.
In view of the loss incurred by the Company during the year under review yourDirectors do not recommend any dividend for the financial year ended 31st March2017.
During the year under review your Company did not raise any capital from the capitalmarkets either by way of issue of equity shares / ADR / GDR / or any debt by way ofdebentures.
4. CHANGE IN THE REGISTERED OFFICE:
During the year under review the Company changed it's Registered Office from"156 D. J. Dadajee Road Behind Everest Building Tardeo Mumbai - 400 034" toits owned premises situated at "Office Nos. I-17 I-18 and I-19 10thFloor The Tardeo Everest Premises Co-operative Society Limited 156 D. J. Dadajee RoadTardeo Mumbai - 400 034". The said change in the Registered Office was approved bythe Board of Directors at its meeting held on 2nd February 2017.
5. SHARE CAPITAL:
During the year under review the Company made an allotment of 1557632 (Fifteen LacsFifty Seven Thousand Six Hundred and Thirty Two) equity shares of Rs. 10/- each at a priceof Rs. 22.47 (Rupees Twenty Two and Paise Forty Seven Only) each [incl. premium of Rs.12.47 (Rupees Twelve and Paise Forty Seven Only)] aggregating to Rs. 34999991.04 (RupeesThree Crores Forty Nine Lacs Ninety Nine Thousand Nine Hundred and Ninety One and PaiseFour Only) on preferential basis to Ferari Investments and Trading Company Private Limited(Promoter Group entity). The said preferential issue was approved by the shareholders atthe Extra Ordinary General Meeting of the Company held on 17th March 2017.
Subsequent to the aforesaid allotment the issued and paid-up share capital of theCompany stands increased from Rs. 653352760/- (Rupees Sixty Five Crores Thirty ThreeLacs Fifty Two Thousand Seven Hundred and Sixty Only) divided into 65335276 (Six CroresFifty Three Lacs Thirty Five Thousand Two Hundred and Seventy Six) equity shares of Rs.10/- (Rupees Ten Only) each to Rs. 668929080/- (Rupees Sixty Six Crores Eighty Nine LacsTwenty Nine Thousand and Eighty Only) divided into 66892908 (Six Crores Sixty Eight LacsNinety Two Thousand Nine Hundred and Eight) equity shares of Rs. 10/- (Rupees Ten Only)each.
6. DEPOSITORY SYSTEM:
The Company's equity shares are compulsorily tradable in electronic form. As of 31stMarch 2017 99.99% of the Company's total paid-up capital representing 66891019 equityshares is in dematerialized form. In view of the benefits offered by the depositorysystem members holding shares in physical mode are advised to avail the demat facility.
7. PUBLIC DEPOSITS:
Your Company did not invite or accept deposits from public during the year underreview.
8. SUBSIDIARY COMPANIES:
Syngience Broadcast Ahmedabad Limited ("SBAL") was incorporated as asubsidiary of Next Radio Limited on 10th April 2017. SBAL is the step-downsubsidiary of the Company.
A statement containing salient features of the financial statement and relatedinformation of the subsidiaries in the prescribed format AOC-1 is provided in theconsolidated financial statements and hence not repeated here for the sake of brevity.
The annual audited financial statements of the Company's subsidiary namely Next RadioLimited have been included in this Annual Report.
Pursuant to Section 136 of the Companies Act 2013 the financial statements of thesubsidiary companies are kept for inspection by the shareholders at the Registered Officeof the Company. The Company shall provide the copy of the financial statements of itssubsidiary companies to the shareholders upon their request. The statements are alsoavailable on the website of the Company www.nextmediaworks.com under the Investor's Desksection.
9. CONSOLIDATED FINANCIAL STATEMENTS:
Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to the provisions of the Listing Agreement entered into with the Stock Exchangesand prepared in accordance with the Accounting Standards prescribed by the Institute ofChartered Accountants of India in this regard and forms part of the Annual Report.
10. AUDITED FINANCIAL STATEMENTS OF THE COMPANY'S SUBSIDIARIES:
The audited financial statements the Auditors Report thereon and the Board's Reportfor the year ended 31st March 2017 for the Company's subsidiary i.e. Next RadioLimited is annexed to this Report. Further a summary of the financial position of all thesubsidiaries is also provided in the report.
11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Particulars of loans guarantees given and investments made during the year areprovided in Notes of the Standalone Financial Statements as required under Section 186 ofthe Companies Act 2013 and Schedule V of the Securities and Exchange Board of India(Listing Obligation and Disclosure Requirement) Regulations 2015.
12. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were incompliance with the requirement of the Companies Act 2013 and the Rules framed thereunderand the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. AllRelated Party Transactions are placed before the Audit Committee and also the Board asthe case may be for approval. A statement giving details of all related partytransactions is placed before the Audit Committee and the Board of Directors for theirapproval / noting on a quarterly basis.
During the year under review the contracts or arrangements with related partiesreferred to in section 188 of Companies Act 2013 have been on arms' length and inordinary course of business and were not material in nature. Accordingly the particularsof the transactions as prescribed in Form AOC - 2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 are not required to bedisclosed as they are not applicable.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
13. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:
Report on Corporate Governance and Management Discussion and Analysis Report for theyear under review together with a Certificate from the M/s A. Y. Sathe & Co. CompanySecretaries regarding compliance of the conditions of Corporate Governance as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms partof the Annual Report.
14. DIRECTORS & KEY MANAGERIAL PERSONNEL:
As on the date of this report the Company's Board consists of the followingIndependent Directors:
(i) Mr. Adille Sumariwalla
(ii) Mr. Venkat Idupuganti
(iii) Mr. Dilip Cherian
(iv) Ms. Monisha Shah
(v) Mr. Rajbir Singh Bhandal
The Independent Directors of your Company have given the certificate of independence toyour Company stating that they meet the criteria of independence as mentioned underSection 149(6) of the Companies Act 2013.
In accordance with Section 152 and other applicable provisions of Companies Act 2013Mr. Tarique Ansari (DIN: 00101820) - Chairman & Managing Director retires by rotationand being eligible offers himself for re-appointment at the ensuing Annual GeneralMeeting. The Board commends his re-appointment for your approval.
Note: The shareholders have at the 34th Annual General Meeting of theCompany held on 6th August 2015 re-appointed Mr. Tarique Ansari as theChairman & Managing Director of the Company for a further period of 3 years effective1st July 2016 till 30th June 2019. The aforementioned re-appointmentis being commended for shareholders' approval only for complying with the provisions ofSection 152 of the Companies Act 2013 and shall not be construed as a break in hiscurrent tenure.
(b) Key Managerial Personnel:
As on the date of this Report the following persons have been appointed as the KeyManagerial Personnel (KMP) of the Company pursuant to Section 2(51) and 203 of theCompanies Act 2013:
(i) Mr. Tarique Ansari - Chairman & Managing Director
(ii) Mr. Ismail Dabhoya - Chief Financial Officer
(iii) Mr. Mandar Godbole - Company Secretary & Compliance Officer
15. BOARD & COMMITTEE MEETINGS:
During the year under review the following Board /Committee Meetings were convened andheld:
(a) Five (5) Board Meetings were held details of which are given in the CorporateGovernance Report. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013.
(b) Four (4) Audit Committee Meetings were held details of which are given in theCorporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.
(c) Three (3) Risk Management Committee Meetings were held details of which are givenin the Corporate Governance Report.
(d) Three (3) Stakeholder Relationship Committee Meetings were held details of whichare given in the Corporate Governance Report.
(e) One (1) Nomination & Remuneration Committee Meeting was held details of whichare given in the Corporate Governance Report.
(f) One (1) Share Allotment Committee Meeting was held details of which are given inthe Corporate Governance Report.
16. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Committee and the Nomination & RemunerationCommittee. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report.
17. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
Since the Company functions through its subsidiary viz. Next Radio Limited which isinto FM broadcasting business the familiarization program aims to provide IndependentDirectors with the radio industry scenario the socio-economic environment in which theCompany operates the business model the operational and financial performance of theCompany significant developments so as to enable them to take well informed decisions ina timely manner. The familiarization program also seeks to update the Directors on theroles responsibilities rights and duties under the Act and other statutes. The policy onCompany's familiarization programme for Independent Directors is posted on the Company'swebsite at www.nextmediaworks.com .
18. REMUNERATION POLICY:
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report and isalso available on the Company's Website at www.nextmediaworks.com .
19. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards and Schedule III of the Companies Act2013 have been followed and there are no material departures from the same;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31st March 2017 and ofthe profit and loss of the Company for the financial year ended 31st March2017;
(c) proper and sufficient care has been taken 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) the annual accounts have been prepared on a going concern' basis;
(e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
20. STATUTORY AUDITORS:
M/s. Haribhakti & Co. LLP Chartered Accountants have been the Company's StatutoryAuditors for a period of more than ten years. In terms of their last re-appointment madeat the 35th Annual General Meeting ("AGM") held on 5thAugust 2016 they are holding office up to the conclusion of the 36th AGM andhence would retire at the conclusion of the forthcoming 36th AGM.
As per sub-section (2) of Section 139 of the Companies Act 2013 (the Act') alisted company shall not appoint or re-appoint an audit firm as auditor for more than twoterms of five consecutive years. Further as per order dated 30th June 2016issued by the Ministry of Corporate Affairs a listed company is required to comply withthe provisions of sub-section (2) of Section 139 of the Act within a period which shallnot be later than the date
of the first annual general meeting of the company held after three years from the dateof commencement of the Act.
Accordingly M/s. Walker Chandiok & Co. LLP (Regn. No.: 001076N) CharteredAccountants are proposed to be appointed as Statutory Auditors of the Company for a periodof 1 year commencing from the conclusion of 36th AGM till the conclusion ofthe 37th AGM subject to ratification by members at the ensuing AGM.
The said appointment has been approved by the Board of Directors at Board Meeting heldon 4th May 2017. M/s. Walker Chandiok & Co. LLP (Regn. No.: 001076N)Chartered Accountants have consented to the said appointment and confirmed that theirappointment if made would be within the limits specified under Section 141(3)(g) of theAct. They have further confirmed that they are not disqualified to be appointed asstatutory auditors in terms of the provisions of the proviso to Section 139(1) Section141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit andAuditors) Rules 2014.
21. STATUTORY AUDITORS' REPORT ON THE ANNUAL FINANCIAL STATEMENTS:
The Auditors' Report on the Standalone and Consolidated Annual Accounts do not containany qualification. Members' attention is drawn to "Emphasis of Matter" stated inthe Auditor's Report dated 4th May 2017 on the Standalone Financial Statementsand in the Audit Report dated 4th May 2017 on the Consolidated Financialstatements for the financial year ended 31st March 2017.
The Directors would like to state that the said matters are for the attention ofmembers only and have been explained in detail in the relevant notes to accounts as statedtherein and hence require no further clarification.
22. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. A. Y. Sathe & Co. Company Secretaries to undertake the SecretarialAudit of the Company for the financial year ended 31st March 2017. The Reportof the Secretarial Audit is annexed herewith as Annexure A'.
With reference to the observation made by the Secretarial Audit Report dated 4thMay 2017 regarding deficiency in the shareholding pattern filed with the Stock Exchangefor the quarter ended 31st March 2017 we wish to state that the Company hadfiled corporate action forms with NSDL and CDSL for credit of 1557632 equity sharesissued on preferential basis to Ferari Investments and Trading Company Private Limited(Promoter Co.). Since credit of the shares was pending as on 31st March 2017the same were not included in the shareholding pattern filed by the Company for thequarter ended 31st March 2017.
23. INTERNAL FINANCIAL CONTROL SYSTEM:
According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiessafeguarding of its assets prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial information.
The Company has a proper and adequate internal financial control system which ensuresthat all assets are safeguarded and protected and that the transactions are authorisedrecorded and reported correctly. The Company's internal financial control system alsocomprises of compliances with the Company's policies and Standard Operating Procedures(SOPs) which is further reviewed by M/s T. R. Chadha & Co. LLP the InternalAuditors. The Internal Auditors independently evaluate the adequacy of internal controls.
24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS IN RELATION TO FINANCIAL STATEMENTS:
The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl system in the Company. The system should be designed and operated effectively.Rule 8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regardingadequacy of Internal Financial Controls with reference to the financial statements to bedisclosed in the Board's report. To ensure effective Internal Financial Controls theCompany has laid down the following measures:
All operations are executed through Standard Operating Procedures (SOPs) in allfunctional activities for which key manuals have been put in place. The manuals areupdated and validated periodically.
All legal and statutory compliances are ensured on a monthly basis for alllocations in India through a fully automated tool. Non-compliance if any is seriouslytaken by the management and corrective actions are taken immediately.
Approval of all transactions is ensured through a pre-approved delegation ofauthority schedule. The schedule is reviewed periodically by the management and complianceof the same is regularly checked and monitored by the auditors.
The Company follows a robust internal audit process wherein audits are conductedon a regular basis throughout the year by the Internal Auditors as per agreed audit plan.
The audit reports of the Internal Auditors are submitted to the Audit Committeeand the Board for review and necessary action.
The Company has a comprehensive risk management framework.
The Company has a robust mechanism of building budgets at an integrated cross-functional level. The budgets are reviewed on a monthly basis so as to analyze theperformance and take corrective action wherever required.
The Company has in place a well-defined Whistle Blower Policy / Vigil Mechanism.
The Company has a system of Internal Business Reviews. All departmental headsdiscuss their business issues and future plans in monthly review meetings. They reviewtheir achievements in quarterly review meetings.
Compliance of the secretarial functions is ensured by way of secretarial audit.
25. EXTRACT OF ANNUAL RETURN:
Pursuant to sub-section 3(a) of section 134 and sub-section (3) of section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extract of the annual return as on 31st March 2017 forms partof this report as Annexure B'.
26. EMPLOYEE STOCK OPTION PLAN:
During the year 66660 options were exercised by one (1) employee pursuant to theCompany's Employee Stock Option Scheme 2012 after the same were vested. The applicabledisclosures as stipulated under the SEBI Regulations as on 31st March 2017 withregard to Employees Stock Option Plan are provided in Annexure C' to thisreport.
27. SEXUAL HARRASMENT POLICY:
During the year under review the Company has not received any complaint from theemployees related to sexual harassment. The Company has in place sexual harassment policywhich is available on the Company's website.
28. RISK MANAGEMENT:
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These areperiodically discussed at the meetings of the Company.
30. VIGIL MECHANISM:
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013 andRegulation 22 of the Listing Regulation. The policy provides for a framework and processwhereby concerns can be raised by its employees against any kind of discriminationharassment victimization or any other unfair practice being adopted against them.
31. ENERGY CONVERSATION TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
A. Conversation of Energy: NIL
B. Technology Absorption: NIL
C. Foreign Exchange Earning: NIL
D. Foreign Exchange Outgo: NIL
| ||For Next Mediaworks Limited |
| ||Sd/- |
| ||Tarique Ansari |
| ||Chairman & Managing Director |
| ||(DIN: 00101820) |
|Place: Mumbai || |
|Date: 4th May 2017 || |