TO THE SHAREHOLDERS
Your Directors are pleased to present the Thirty Second Annual Report and AuditedFinancial Accounts of the Company for the financial year ended March 31 2017.
The financial highlights for the year ended March 31 2017 are given below:
| || || |
(Rs. in Crores)
| ||Standalone for the year ended ||Consolidated for the year ended |
|Particulars ||March 31 2017 ||March 31 2016 ||March 31 2017 ||March 31 2016 |
|Total Income ||2703.80 ||2502.75 ||2799.52 ||2589.97 |
|Total Expenditure ||1213.45 ||1186.48 ||1277.36 ||1239.79 |
|Profit before share of profit from || || || || |
|Associates/Joint Ventures exceptional items and tax ||1490.35 ||1316.27 ||1522.17 ||1350.18 |
|Share of profit from an associates and a joint ventures ||- ||- ||28.75 ||30.95 |
|Profit before exceptional item and tax ||1490.35 ||1316.27 ||1550.92 ||1381.13 |
|Exceptional items (net) ||- ||17.97 ||- ||17.97 |
|Profit before tax after exceptional items (net) ||1490.35 ||1334.24 ||1550.92 ||1399.10 |
|Income tax expense ||510.94 ||464.55 ||520.25 ||476.79 |
|Profit for the year ||979.41 ||869.69 ||1030.66 ||922.31 |
|Profit for the year attributable to: || || || || |
|- Owners of the Company ||- ||- ||1030.26 ||921.83 |
|- Non- Controlling Interest ||- ||- ||0.41 ||0.48 |
|Other Comprehensive Income || || || || |
|Net other comprehensive income not to be reclassified to profit or loss in subsequent periods ||(0.98) ||0.07 ||(1.53) ||(0.05) |
|Other Comprehensive Income for the year attributable to: || || || || |
|- Owners of the Company ||- ||- ||1.53 ||0.05 |
|- Non- Controlling Interest ||- ||- ||- ||- |
|Total comprehensive income for the year ||978.43 ||869.76 ||1029.13 ||922.26 |
|Total Comprehensive Income for the year attributable to: || || || || |
|- Owners of the Company ||- ||- ||1028.73 ||921.78 |
|- Non- Controlling Interest ||- ||- ||0.41 ||0.48 |
|Total comprehensive income for the year ||978.43 ||869.76 ||1028.73 ||921.78 |
|Retained Earnings at the beginning of the year ||2364.97 ||2230.39 ||2321.38 ||2134.78 |
|Interim Dividend ||394.08 ||610.83 ||394.08 ||610.83 |
|Tax on InterimDividend ||80.23 ||124.35 ||80.23 ||124.35 |
|Retained Earnings at the end of the year ||2869.09 ||2364.97 ||2875.80 ||2321.38 |
|Earnings Per Share ( Face Value Rs.5/- ) ||24.85 ||22.07 ||26.15 ||23.40 |
SUMMARY OF OPERATIONS
The Total Income for the year ended March 31 2017 was Rs. 2703.80 crores asagainst Rs. 2502.75 crores during the previous year ended March 31 2016. ProfitBefore Tax after exceptional items was Rs. 1490.35 crores as against Rs.1334.24 croresin the previous year. Profit After Tax after exceptional items was Rs. 979.41 crores asagainst Rs. 869.69 crores in the previous year.
Your Company one of the largest Television Broadcasters in India operating SatelliteTelevision Channels across four languages of Tamil Telugu Kannada and Malayalam andpresently airing FM radio stations across India continues to have sustained and increasedviewership of its channels with Sun TV being the most watched channel in India.
Your Company has launched the first 24 hours Malayalam comedy channel namely"Surya Comedy" effective from April 29 2017. "Sun NXT" the all newdigital content platform was also launched effective from June 12 2017 enabling customersto watch their popular TV programmes in Tamil Telugu Malayalam and Kannada anytime andanywhere on their favorite devices.
In accordance with the Dividend Distribution Policy adopted by the Board and availableon the website of the Company the Board of Directors during the financial year endedMarch 31 2017 the Board of Directors declared an Interim Dividends of Rs. 5.00/-per equity share (100%) of face value of Rs. 5.00/- each declared on February 10 2017 andRs. 5.00/- per equity share (100%) of face value of Rs. 5.00/- each declared on March 102017 and have not recommended any Final Dividend. The dividend payout would result in atotal dividend of 200% i.e. Rs. 10.00/- per equity share of face value of Rs. 5.00/-each for the financial year ended March 31 2017. (Prev. Year of 310% i.e. Rs.15.50/- per equity share of face value of Rs. 5.00/- each). The Payout ratio currentlystands at 48.43%.
TRANSFER TO RESERVES
During the financial year 2016 - 17 no amount has been transferred to the GeneralReserve.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 of the Companies Act 2013 your Directors confirm that to thebest of their knowledge and belief:
In the preparation of the Statement of Profit & Loss for the financial yearended March 31 2017 and Balance Sheet at that date ("financial statements")have been prepared as per Ind-AS as against I-GAAP Accounting Standards followed in theearlier years and proper explanation along with reconciliation have been provided inrelation to material departures;
Appropriate accounting policies have been selected and applied them consistentlyand made such judgments and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at the end of the financial yearand of the profit of the Company for that period;
Proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities. To ensure this the Companyhas established internal control systems consistent with its size and nature ofoperations. In weighing the assurance provided by any such system of internal controls itsinherent limitations should be recognized. These systems are reviewed and updated on anongoing basis. Periodic internal audits are conducted to provide reasonable assurance ofcompliance with these systems. The Audit Committee meets at regular intervals to reviewthe internal audit function;
The financial statements have been prepared on a going concern basis.
Proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively.
Proper systems are in place to ensure compliance of all laws applicable to theCompany;
DIRECTORS AND KEY MANAGERIAL PERSONNEL
None of the Company's directors are disqualified from being appointed as a director asspecified in Section 164 (2) of the Companies Act 2013.
Retirement by Rotation
As per the provisions of the Companies Act 2013 Mr. S. Selvam Director of theCompany will retire at the ensuing AGM and being eligible seeks re-appointment. The Boardof Directors recommend his re-appointment.
The information on the particulars of director eligible for re-appointment in terms ofRegulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulationshas been provided in annexure to the notice convening the Annual General Meeting.
Mr. Kalanithi Maran was re-appointed as Whole Time Director designated as"Executive Chairman" of the Company for a period of 5 (five) years with effectfrom April 20 2017 to April 19 2022 through Postal Ballot dated April 19 2017 underSection 110 of the Companies Act 2013.
Mr. K. Vijaykumar was re-appointed as Managing Director & Chief Executive Officerof the Company for a period of 5 (five) years with effect from April 20 2017 to April 192022 through Postal Ballot dated April 19 2017 under Section 110 of the Companies Act2013.
Mrs. Kavery Kalanithi was re-appointed as Whole Time Director designated as"Executive Director" of the Company for a period of 5 (five) years with effectfrom April 20 2017 to April 19 2022 through Postal Ballot dated April 19 2017 underSection 110 of the Companies Act 2013.
Key Managerial Personnel
Pursuant to the provisions of Section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are Mr. K. Vijaykumar Managing Director and Chief ExecutiveOfficer Mr. V.C. Unnikrishnan Chief Financial Officer and Mr. R. Ravi CompanySecretary. There has been no change in the Key Managerial Personnel during the year.
CORPORATE GOVERNANCE REPORT MANAGEMENT DISCUSSION & ANALYSIS REPORT AND OTHERINFORMATION REQUIRED UNDER THE COMPANIES ACT 2013 AND SEBI (LISTING OBLIGATIONS ANDDISCLOSURE REQUIREMENTS) REGULATIONS 2015
As required under Regulation 34 and Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter referred to as "ListingRegulations") with the Stock exchanges we continue to be a pioneer in benchmarkingour corporate governance policies with the best in the media industry. The report onManagement Discussion and Analysis Corporate Governance as well as the Auditor'scertificate regarding compliance of conditions of Corporate Governance forms part of theAnnual Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective is attached as a part of the Annual Report and the said report willalso be available on the website of the Company.
AUDITORS AND SECRETARIAL AUDITORS
Pursuant to the provisions of Section 139 and other applicable provisions if any ofthe Companies Act 2013 and in accordance with the approval accorded by the Members at the29th Annual General Meeting (AGM) held on September 26 2014 and ratified by the Memberat the 31st AGM held on September 23 2016 M/s. S.R. Batliboi & Associates LLPChartered Accountants (ICAI Firm Registration No: 101049W/E300004) retires as StatutoryAuditors of the Company. Your Board places on record their appreciation for the servicesprovided by M/s. S.R. Batliboi & Associates LLP Chartered Accountants as StatutoryAuditors of the Company for close to two decades.
Based on the recommendations of the Audit Committee and upon review of confirmations ofsatisfaction of criteria as specified in Section 141 of the Companies Act 2013 read withRule 4 of Companies (Audit & Auditors) Rules 2014 your Board had recommended to theMembers appointment of M/s. Deloitte Haskins & Sells LLP Chartered Accountants (FirmRegistration No. 117366W/W-100018) as Statutory Auditors of the Company in place ofretiring Statutory Auditors at the ensuing Annual General Meeting.
A proposal for appointment of M/s Deloitte Haskins & Sells LLP CharteredAccountants as Statutory Auditors of the Company until conclusion of 37th Annual GeneralMeeting to be held in the year 2022 subject to ratification by Equity Shareholders everyyear forms part of the Notice of ensuing Annual General Meeting.
As per the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Smt. Lakshmmi Subramanian Senior Partner of M/s. Lakshmmi Subramanian &Associates a firm of Company Secretaries in Practice to undertake the Secretarial Auditof the Company. The Secretarial Audit Report is annexed herewith as Annexure V.
There are no qualifications reservations or adverse remarks or disclaimers in theAuditors and Secretarial Auditors Report.
In pursuance of Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 M/s. S. Sundar & Associates Cost Accountants wasengaged to carry out Audit of Cost Records of the Company. Requisite proposal seekingratification of remuneration payable to the Cost Auditor forms part of the notice ofensuing Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with Section 135 of the Companies Act 2013 the Company has constituteda Corporate Social Responsibility Committee. The CSR Committee of the Company has approveda CSR policy. The Annual Report on CSR activities as required under Companies (CorporateSocial Responsibility Policy) Rules 2014 has been appended in Annexure I to this Report.Further details relating to the Corporate Social Responsibility Committee are provided inthe Corporate Governance Report which forms part of this report.
Your Company has two subsidiaries viz. M/s. Kal Radio Limited and M/s. South Asia FMLimited (SAFM). SAFM is a subsidiary which has been classified as Joint Venture (JV) asper Ind-AS in financial statements of the Company and accounted as per applicable Ind-ASaccounting standard framework. There has been no material change in the nature of businessof the subsidiaries. Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary companies may write to the Company Secretary. In terms ofproviso to sub section (3) of Section 129 of the Act the salient features of thefinancial statement of the subsidiaries is set out in the prescribed Form AOC 1 asAnnexure V which forms part of the annual report.
MATERIAL SUBSIDIARY COMPANY
As per Regulation 16 of the Listing Regulations your Company has no materialsubsidiary company whose turnover or net worth exceeds 20% of the consolidated turnoveror net worth respectively of your Company and its subsidiaries in the immediatelypreceding accounting year.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 (2) of the Companies Act 2013 an amount of Rs. 0.02 Croresbeing unclaimed dividend pertaining to the financial year 2008-09 had been transferredduring the current year to the Investor Education and Protection Fund established by theCentral Government.
Your Company has not accepted any Deposits from the public in terms of Section 73 ofthe Companies Act 2013 during the financial year under review.
PARTICULARS OF EMPLOYEES
Sun TV Network Limited had 1959 employees as of March 31 2017 (previously 1906). Inaccordance with the provisions of Section 197 (12) of the Companies Act 2013 read withRule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the required information is provided in the Annual Report which forms part of this Report.However as per the provisions of Section 136 of the Companies Act 2013 the AnnualReport is being sent to all the Shareholders of the Company excluding the aforesaidinformation. The said information is available for inspection at the registered office ofthe Company during working hours and any member interested in obtaining such informationmay write to the Company Secretary and the same will be furnished on request.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant or material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There were no material changes and commitments affecting the financial position of theCompany occurred between the end of financial year to which this financial statementsrelate to and the date of this Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under Section 92 (3) of the Companies Act2013 is disclosed in Annexure II in the prescribed form MGT - 9 and forms part of thisReport.
NUMBER OF MEETINGS OF THE BOARD
During the financial year seven Board Meetings were held. The details of meetings arefurnished in the Corporate Governance Report. The intervening gap between the Meetings didnot exceed one hundred and twenty days.
INDEPENDENT DIRECTORS' DECLARATION
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 and Regulation16(1)(b) of the Listing Regulations.
POLICY OF DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided in Section 178 (3) of the Companies Act 2013 forms part of the report asAnnexure VII. Further information about elements of remuneration package of individualdirectors are provided in the extract of Annual Return as provided in the Annexure II -form MGT - 9.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENT
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
TRANSACTIONS WITH RELATED PARTIES
The information on material transactions with related parties pursuant to Section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 in FormAOC-2 is annexed to this report as Annexure III.
The information about internal controls is set out in the Management Discussion &Analysis Report which is attached and forms part of report.
As per the provisions of Section 134 of the Companies Act 2013 and Regulation 21 ofthe Listing Regulations the Board has constituted a Risk Management Committee comprisingof Independent Directors. The Risk Management is overseen by the Risk Management Committeeof the Company on a continuous basis. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuous basis.For details please refer to the Management Discussion and Analysis report which form partof the Board's Report.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has practice of conducting structured induction and familiarizationprogramme of the independent directors as detailed in the Corporate Governance Reportwhich forms part of the Annual Report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
As per Section 177 (10) of the Companies Act 2013 and Regulation 22 of the ListingRegulations the Company has a vigil mechanism to deal with instance of fraud andmismanagement if any. The details of policy are explained in the Corporate GovernanceReport.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY/JOINT VENTURE
The financial position of each of the subsidiary/Joint Venture is provided in aseparate statement AOC - 1 attached to the Financial Statement pursuant to first provisoof Section 129(3) of the Companies Act 2013 as Annexure IV.
INDEPENDENT DIRECTORS' MEETING
As per Regulation 25 of the Listing Regulations a separate meeting of IndependentDirectors was held during the financial year. The detailed information is given in theCorporate Governance Report.
In terms of applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out a formal annual evaluation of its own performancethe directors individually as well as the functioning of its committees. A detailedexplanation has been given in the Corporate Governance Report.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted anAnti-Sexual Harassment policy in line with the provisions of the Sexual Harassment ofWomen at workplace (Prevention Prohibition and Redressal) Act 2013 and the Rulesthereunder. During the year under review no complaints on sexual harassment were received.
INFORMATION AS REQUIRED UNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013 READ WITHRULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES 2014
(A) CONSERVATION OF ENERGY
The Company is engaged in Satellite Television Broadcasting operations and theinformation as intended under Section 134 (3)(m) does not arise.
(B) TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
The Company uses the latest high definition (HD) digital technology in broadcasting itsprograms. The outdated technologies are constantly identified and updated with latestinnovations.
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
| || ||(Rs in Crores) |
|PARTICULARS ||March 31 2017 ||March 31 2016 |
|Foriegn Exchange Earnings ||158.25 ||144.18 |
|Foriegn Exchange Outgo ||370.30 ||49.94 |
CONSOLIDATED FINANCIAL STATEMENTS
As required by Indian Accounting Standard Ind AS 110 and Ind AS 27 onConsolidated Financial Statements issued by The Institute of Chartered Accountants ofIndia the Audited Consolidated Financial Statements of the Company are attached. TheAudited Consolidated Financial Statements also account for the non-controlling interest ofyour Company's subsidiary.
The Managing Director & Chief Executive Officer and the Chief Financial Officerhave submitted a certificate to the Board regarding the financial statements and othermatters as required under Regulation 17(8) of the Listing Regulations which forms part ofthe report.
APPRECIATION AND ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep appreciation of thededication hard work solidarity co-operation support and commitment of employees atall levels in maintaining the sustained growth of your Company and remain in the forefrontof media and entertainment business.
Your Directors thank and express their gratitude for the support and co-operationreceived from the Central and State Governments - mainly the Ministry of Information andBroadcasting and the Department of Telecommunication - and other stakeholders includingviewers producers vendors financial institutions banks investors service providersas well as regulatory and governmental authorities and stock exchanges for theircontinued support.
| ||On behalf of the Board |
|Place: Chennai ||Kalanithi Maran |
|Date: August 11 2017 ||Chairman |