Your Directors take pleasure in presenting the 22nd Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31stMarch 2016 as under:-
1. FINANCIAL SUMMARY/HIGHLIGHTS OF THE COMPANY:
(Rs in Lakhs)
|Particulars ||Year ended 31st March2016 ||Year ended 31st March 2015 |
|Revenue from Operations ||8244.73 ||8250.11 |
|Other Income ||45.80 ||139.09 |
|Total Revenue ||8290.53 ||8389.20 |
|Less : Total Expenses ||7720.26 ||5811.98 |
|Profit/(Loss) before interest Depreciation and Tax ||570.27 ||2577.23 |
|Interest ||452.22 ||647.14 |
|Profit/(Loss) before Depreciation and Tax (PBDT) ||118.05 ||1930.09 |
|Depreciation ||654.32 ||633.47 |
|Profit/(Loss) Before Tax (PBT) ||(536.28) ||1296.62 |
|Provision for taxation ||(68.66) ||480.79 |
|Profit /(Loss) After tax (PAT) ||(604.94) ||815.83 |
|Balance brought forward ||3813.67 ||4016.42 |
|Adjustment of depreciation as per Transition Provisions ||Nil ||707.1 |
|Amount available for appropriations ||3208.73 ||4125.15 |
|Final Dividend on Equity Shares ||129.78 ||259.56 |
|Tax on Dividend ||26.42 ||51.89 |
|Surplus carried to Balance Sheet ||3052.53 ||3813.67 |
2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which affect the financial position ofthe Company. Based on internal financial control framework and compliance systemsestablished in the Company the work performed by statutory internal and secretarialauditors and reviews performed by the management and/or relevant Audit and otherCommittees of the Board your Board is of the opinion that the Companys internalfinancial controls were adequate and effective during the Financial Year 2015-16.
In view of current year loss and considering the co-operation extended by theshareholders of the company your Directors recommend final dividend at the rate of Rs 0.25paise per equity share of Rupees 5 paid up for the year ended 31st March 2016. FinalDividend if approved by Members at the ensuing Annual General Meeting will be paid on orafter October 5 2016 to all those equity shareholders whose name appear in the Registerof Members of the Company after giving effect to all valid share transfers in physicalform lodged with the Company or its Registrar on or before Friday September 23 2016 andin the list of Beneficial Owners furnished by National Securities Depository Limitedand/or Central Depository Services (India) Limited in respect of shares held inelectronic form as at the end of the business day on Friday September 23 2016.
Equity dividend payout for the year under review has been formulated in accordance withthe Companys policy to pay sustainable dividend linked to long term growthobjectives of the Company to be met by internal cash accruals.
4. RESULT OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS CHANGE IN THE NATUREOF BUSINESS IF ANY:
Your Company achieved revenue from operations Rs. 8290.53 lakhs as against Rs.8389.20lakhs in the P.Y. The Total Expenditure for the period is Rs.8826.81 lakhs as againstRs.7092.58 lakhs in the Previous Year.
The performance of the Company is marginally affected by downfall in advertisementincome due to reduction in the viewership rating for the channels due to the change in therating parameters by new rating agency.
Net Loss After Tax stood at Rs. 604.94 Lakhs as compared to Net profit after taxRs.815.83 lakhs in the Previous Year.
Your Company had undergone competitive business environment and changing customerpreferences and with the new rating system are in place now the media planners andadvertisers will have to establish new benchmarks to work with the new systems. furtherthe company is also exploring various options for raising revenue generation with muchfocus on regional market consolidation and exploring various new platforms of revenuegeneration.
Your Company today is an established Television Company in the Tamil broadcastingindustry in South India. The Network is presently runs 13 Channels and has 13 Channellicenses in various languages and genre and 3 more licenses are in the pipeline to launch3 more channels. Your company has own uplinking station and Exclusive Transponderfacility. Your company broadcasts the channels in whole of India as well as parts ofSouth East Asia and the Middle East.
Your company undertakes several production projects with the right mix of self producedand outsourced productions to mitigate financial risk and obtain large revenues. Withself-produced content the company gets complete right over the content and can build itsown intellectual property base. The company plans to have more in house media contents inTamil language in various genres. Your company has an advantage of being a mass channelwith its extensive line up of attractive programming to cater the entire family. Thechannels of the network reach a wide variety of audiences as It satisfies people of allages The Channel offers a right mix of movies serials debates cultural educationalcookery handicrafts and religious programmes satisfying the needs of the entire communityranging from Urban to the rural audience.
There are no significant changes in nature of business during the Financial Year2015-16.
5. SHARE CAPITAL
There were no changes to the Equity Share Capital of the Company during the year underreview.
6. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Company has no Subsidiary Joint Ventures or Associate Companies and same status ismaintained during the F.Y 2015-16.
7. PUBLIC DEPOSITS
During the year the Company has neither invited nor accepted any deposits from thepublic or its employees.
8. BOARD COMMITTEES
In compliance with the requirements of Companies Act 2013 and Listing Agreements /Listing Regulations your Board had constituted various Board Committees including AuditCommittee Risk Management Committee Nomination & Remuneration CommitteeStakeholders Relationship Committee and Corporate Social Responsibility Committee.
Details of the constitution of these Committees which are in accordance withregulatory requirements have been uploaded on the website of the Company viz.www.rajtvnet.in. Details of scope constitution terms of reference number of meetingsheld during the year under review along with attendance of Committee Members therein formpart of the Corporate Governance Report annexed to this report. A detailed report onCorporate Social Responsibility activities initiated by the Company during the year underreview in compliance with the requirements of Companies Act 2013 is annexed to thisreport
9. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirement) Regulations 2015 (ListingRegulations) and applicable provisions of Companies Act 2013.A detailed report oncorporate governance together with a certiffcate from the Statutory Auditors incompliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015of the Listing Agreement is attached as part of this report vide Annexure I. Compliancereports in respect of all laws applicable to the Company have been reviewed by the Boardof Directors.
10. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an armslength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.
11. CORPORATE SOCIAL RESPONSIBILITY
TThe Corporate Social Responsibility and Governance Committee (CSR&G Committee) hasformulated and recommended to the Board a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company which has been approvedby the Board. The CSR Policy may be accessed on the Companys website at the link:www.rajtvnet.in.Your Company has always responded in a responsible manner to the growingneeds of the society. A number of enriching and enlivening activities that contribute tothe community in the areas of health education environment and preservation of thecountrys rich culture and heritage have been taken up. Annual Report on CSRActivities undertaken by the Company for the Financial Year 2015-16 is annexed with thisreport vide Annex-ure III.
12. DIRECTORS AND KEY MANANGERIAL PERSONNEL
Your Board comprises of 9 Directors including 4 Independent Directors. IndependentDirectors provide their declarations both at the time of appointment and annuallyconfirming that they meet the criteria of independence as prescribed under Companies Act2013 and SEBI (LODR) 2015. During F.Y. 2015-16 your Board met 4 (Four) times details ofwhich are available in Corporate Governance Report annexed to this report.
13. DIRECTORS SEEKING FOR RETIREMENT BY ROTATION
Directors Shri. M. Ravindran (Holding DIN 00662830) and Shri. A Arjuna Pai (Holding Din001830471) who retires by rotation and being eligible offers himself for re-appointment.
The Board of Directors met 4 times during this financial year. The Board meeting wason:-
27th May 2015 21st July 2015 23rd October 2015 and29th January 2016
The Independent Directors of your Company in a separate meeting held on October 23rd2015 without presence of other Directors and management evaluated performance of theChairman and Managing Director and other Non-Independent Directors along with performanceof the Board/Board Committees based on various criteria recommended by Nomination &Remuneration Committee. A report on such evaluation done by Independent Directors wastaken on record by the Board and further your Board in compliance with requirements ofCompanies Act 2013 evaluated performance of all Independent Directors based on variousparameters including attendance contribution etc.
The details about the appointment re-appointment Managing Director Whole TimeDirectors KMP Independent Directors is annexed with this report vide Annexure III.
14. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from each Independent Directors of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).
15. BOARD & AUDIT COMMITTEE
The details regarding number of board meetings held during the financial year andcomposition of Audit Committee is furnished in the Corporate Governance Report.
16. AUDITORS AND AUDITORS REPORT
I. Statutory Auditors
M/s. Pratapkaran Paul & Co. Chartered Accountants having Firm Registration No.002777S Chennai 600 034 the retiring auditors holds office until the conclusionof the ensuing Annual General Meeting and is eligible for reappointment.
Your Company has received confirmation from the Auditors to the effect that theirappointment if made will be in accordance with the limits specified under the CompaniesAct 2013 and the firm satisfies the criteria specified in Section 141 of the CompaniesAct 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014. Your Board isof the opinion that continuation of M/s. Pratapkaran Paul & Co. CharteredAccountants as Statutory Auditors during F.Y.2016-17 will be in the best interests of theCompany and therefore Members are requested to consider their re-appointment as StatutoryAuditors of the Company from the conclusion of ensuing Annual General Meeting till nextAnnual General Meeting at remuneration be decided by the Board.
The Notes on financial statement referred to in the Auditors Report areself-explanatory and do not call for any further comments. The Auditors Report doesnot contain any qualiffication reservation or adverse remark.
II. Secretarial Auditor
The Members have appointed M/s V. Nagarajan & Co. Practising Company Secretary toconduct Secretarial Audit for the F.Y. 2015-16. The Secretarial Audit Report for thefinancial year ended March 31 2016 is annexed herewith marked as Annexure V to thisReport. The Secretarial Audit Report does not contain any qualiffication reservation oradverse remark.
i. Particulars of loans guarantees and investments: During the period underreview company has no transactions to be reported under the disclosure of particulars ofloans guarantees and investments made by the company required under section 186 (4) ofthe companies act 2013.
ii. Transactions with related parties: None of the transactions with relatedparties fall under the scope of section 188(1) of the act. Information on materialtransactions with related parties pursuant to section 134(3)(h) of the act read with rule8(2) of the companies (accounts) rules 2014 in form aoc-2 is annexed to this report.
iii. Internal Financial Controls and their adequacy: Your Company has approvedinternal financial controls and policies/procedures to be adopted by the Company fororderly and efficient conduct of the business including safeguarding of assets preventionand detection of frauds and errors ensuring accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. The Audit Committeeevaluates the internal financial control system periodically.
iv. Deposits & unclaimed dividend: Your Company has not accepted any publicdeposit under chap- ter v of the companies act 2013. During the year under review interms of provisions of Investors Education and Protection Fund (Awareness and Protectionof Investors) Rules 2014 unclaimed dividend declared by the company for financial year2008-09 aggregating to Rs.93546/- was transferred to investors education and protectionfund within the due date.
v. Extract of Annual Return: The extract of annual return in form MGT - 9 asrequired under Section 92(3) of the act read with Companies (Management &Administration) Rules 2014 is annexed to this report.
vi. Sexual Harassment: The Company has zero tolerance for sexual harassment atworkplace and has adopted a Policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual harassment of Women atworkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.During the year under review no complaints on sexual harassment were received.
vii. Regulatory orders: no significant or material orders were passed by theregulators or courts or tribunals which impact the going concern status and companysoperations in future.
18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARN INGS ANDOUTGO
Your Company is into the business of Broadcasting of General Entertainment TelevisionChannels. Since this business does not involve any manufacturing activity most of theinformation required to be provided under Section 134(3) (m)) of the Companies Act 2013read with the Companies (Accounts) Rules 2014 are Nil / Not Applicable. However theinformation as applicable is given hereunder:
ANNEXURE TO VII ABOVE - the information as applicable is given here under:
|a) Conservation of Energy: || |
|(i) the steps taken or impact on conservation of energy || |
|(ii) the steps taken by the company for utilizing alternate sources of energy ||Your Company being a service provider requires minimal energy consumption and every endeavour is made to ensure optimal use of energy avoid wastages and conserve energy as far as possible. |
|( iii ) the capital investment on energy conservation equip- ments || |
|b) Technology Absorption: || |
|(i) the efforts made towards technology absorption || |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution || |
|(iii) in case of imported technology (imported during the last threeyears reckoned from the beginning of the financial year)- ||Your Company uses latest technology and equipments into its Broadcasting business. |
|(a) the details of technology imported. ||However since the Company is not engaged in any manufacturing the information in connection with technology absorption is |
|(b) the year of import; || |
|(c) whether the technology been fully absorbed. ||Nil. |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof. || |
|(iv) the expenditure incurred on Research and Development || |
c) Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are given inAdditional Information to the Financial statements forming part of Notes on Accounts ofthe company.
THE PEOPLES CHANNEL
19. HUMAN RESOURCES & PARTICULARS OF EMPLOYEES
Being in the business of creativity and business of people to ensure sustainablebusiness growth and become future ready over the years your Company has been focusing onstrengthening its talent management and employee engagement processes and through theyear organisations engagement scores has improved to highest percentile in theentertainment sector. Your Company had 554 employees as of March 31 2016 and your companyprovided additional employment opportunity to people and empowered the human resourceassets during the year. Requisite disclosures in terms of the provisions of Section 197(12) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 along with statement showing names andother particulars of the employees drawing remuneration in excess of the limits prescribedunder the said rules requires your company to disclose the particulars of employees whoare in receipt of remuneration of Rs. 60 lakhs or more per annum and those who were inreceipt of remuneration of Rs. 5 lakhs or more per month. However during the financialyear under review company does not come under the purview of the above said complianceexcept Managing Director and Whole time Directors of the Company the disclosure is madein the annexure.
20. VIGIL MECHANISM AND WHISTLE BLOWER POLICY
Section 177 of the Companies Act 2013 requires every listed company and such class orclasses of companies as may be prescribed to establish a vigil mechanism for thedirectors and employees to report genuine concerns in such manner as may be prescribed.
The Company has adopted a Code of Conduct for Directors and Senior Management Personnel("the Code") which lays down the principles and standards that should governthe actions of the Directors and Senior Management Personnel.
Any actual or potential violation of the Code howsoever insignificant or perceived assuch is a matter of serious concern for the Company. Such a vigil mechanism shall providefor adequate safeguards against victimization of persons who use such mechanism and alsomake provision for direct access to the chairperson of the Audit Committee in appropriateor exceptional cases.
The company had established a mechanism called Whistle Blower Policy foremployees to report to the management instances of unethical behaviour actual orsuspected fraud or violation of the companys code of conduct and the same isavailable at the website of the company (www.rajtvnet.in).
The Company has laid down code of conduct for Board of Directors and senior managementpersonnel. Report details of establishment of vigil mechanism (for directors and employeesto report genuine concerns) pursuant to the provisions of section 177(9) & (10) of theCompanies
Act 2013 and as per SEBI (LODR) 2015 of the Listing Agreement.
21. Disclosures in terms of the provisions of Section 197 (12) of the Act read withRule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are provided in the annual report.
22. SHAREHOLDING OF DIRECTORS/ PROMOTERS AND PROMOTER GROUP
The Managing Director and other whole time Directors along with their spouse anddependent children constituting promoters and Promoter group hold more than two percent ofthe equity share of the Company in their individual capacity. Independent Directors do nothold any share in the Company.
Details Pledging of the Shares by the Promoters
|Sl. No ||Particulars ||Year Ended March 31 2016 |
|A ||PARTICULARS OF SHAREHOLDING ||No of Shares |
|1 ||Promoters Share Holding || |
| ||- Number of Shares ||36297244 |
| ||- Percentage of Shareholding ||68.96 |
|2 ||Promoter and Promoter Group Shareholding || |
| ||a) Pledged / Encumbered || |
| ||Number of Shares ||500000 |
| ||Percentage of Shares (as a % of total share holding of promoter and promoter group) ||1.38 |
| || ||0.96 |
| ||Percentage of Shares (as a % of total share capital of the Company) ||35797244 |
| ||b) Non - Pledged / Non -Encumbered || |
| ||- Number of Shares ||98.62 |
| ||- Percentage of Shares (as a % of total sharehold- ing of promoter and promoters group) ||68.96 |
| ||- Percentage of Shares (as a % of total share capital of the Company) || |
| ||Total Promoter Holding ||69.91 |
23. INTERNAL FINANCIAL CONTROL
The company has an established internal control system on the financial reporting andthis is adequate for the size and nature of our business. The companys InternalControl System is supported by well laid out systems procedures and policies for each ofthe functions and these are being followed in the normal course of operations of theCompany.
The adherence to the established procedures / policies is being audited by firm ofAuditors as part of the internal audit. Appropriate actions to correct deviations if anyare taken up immediately by the management. The Audit Committee of the Company providesreassurance to the Board on the existence of an effective internal control system in theoperations of the Company.
The company has established a system of periodic review of the established internalcontrol system and its effectiveness and takes actions for upgrading the same to meet thechanging requirements.
24. PLEDGING OF THE SHARES BY THE PROMOTERS
As required under SEBI (Substantial Acquisition and Takeover) Regulation 1997 thePromoters promoter group and the Persons acting in concert representing Promoters andpromoter Group pledged shares during the financial year. Details as per Annuxure II -IV.(II)
25. LISTING WITH STOCK EXCHANGES
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 toNSE & BSE where the Companys Shares are listed.
26. SHARES IN SUSPENSE ACCOUNTS
As required under Requirements of the Listing Regulations 2 shareholders and 116numbers of outstanding shares are lying in the suspense account at the beginning and endof the year. The Company has not been approached by any of these shareholders. The votingrights on the shares outstanding in the suspense account as on March 31 2014 shall remainfrozen till the rightful owner of such shares claims the shares.
27. DIRECTORS' RESPONSIBILITY STATEMENT
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) The Financial Statements of the Company - comprising of the Balance Sheet as atMarch 31 2016 and the Statement of Profit & Loss for the year ended on that datehave been prepared on a going concern basis following applicable accounting standards andthat no material departures have been made from the same;
(b) Accounting policies selected were applied consistently and the judgments andestimates related to these financial statements have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs of thethe Company as atMarch 31 2016 and of the profits/ (Loss) of the Company for the year ended on thatdate;
(c) Proper and sufficient care has been taken for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 tosafeguard the assets of the Company and to prevent and detect fraud and otherirregularities.
(d) Requisite internal financial controls to be followed by the Company were laiddown and that such internal financial controls are adequate and operating effectively; and
(e) Proper systems have been devised to ensure compliance with the provisions ofall applicable laws and such systems are adequate and are operating effectively.
The Directors take this opportunity to thank all their valued customers businessassociates and vendors for their kind support. The Directors also record theirappreciation for the sincere and dedicated efforts put in by all Employees. Employees areour vital and most valuable assets. Your Directors value the professionalism andcommitment of all employees of the Company and place on record their appreciation of thecontribution made by employees of the Company at all levels that has contributed to yourCompanys success and remain in the forefront of media and entertainment business.Your Directors thank and express their gratitude for the support and co-operation receivedfrom the Central and State Governments / regulatory authorities viz. the Ministry ofInformation & Broadcasting the Department of Telecommunication Ministry of CorporateAffairs Reserve Bank of India Securities and Exchange Board of India Foreign InvestmentPromotion Board the Stock Exchanges and Depositories and other stakeholders includingviewers producers vendors financial institutions banks investors Service providersand all our stakeholders. Your directors also place on record their appreciation of thetireless efforts of Team RAJTV a dedicated and loyal band of people who have displayedunswerving commitment to their work in these challenging times and helped the Companydeliver good results.
| ||For and on behalf of the Board of Directors || |
|Place: Chennai ||Raajhendhran M ||M. Ravindran |
|Date: 29th July 2016 ||Chairman & Managing Director ||Director |