The Directors take pleasure in presenting the 24th Annual Reporttogether with the audited statement of accounts of the Company for the financial yearended March 31 2018.
The salient features of the Company's financial results for the yearunder review are as follows:
| || || |
(R in lacs)
|PARTICULARS || |
|Income from operations || |
|Less: Total expenditure || |
|Operating profit || |
|Less: Interest || |
|Less: Depreciation || |
|Operating Profit after interest and depreciation || |
|Add : Other income || |
|Less : Exceptional items || |
|Profit before tax || |
|Less: Provision for taxation || |
|Net profit after tax || |
|Other Comprehensive Income || |
|Balance brought forward from previous year || |
|Adjustment of Depreciation on account of transitional provision of Schedule II of Companies Act 2013 || |
|Appropriations: || || |
|Disposable profits || |
|Less: Interim dividend || |
|Less: Payment of dividend || |
|Less: Corporate dividend tax || |
|Less: Transfer to General Reserve || |
|Balance carried to balance sheet || |
Note: The financial statements for the year ended March 31 2018 hasbeen prepared under IND AS (Indian Accounting Standards). The figures for the previousyear (2016-17) are adjusted so as to give effect of merger of production unit of BalajiMotion Pictures Limited and Bolt Media Limited with Balaji Telefilms Limited.
RESULTS OF OPERATIONS
During the year under review the Standalone Revenue from operations ofthe Company is R 41658.69 lacs an increase of 1% over the previous year's R 40846.28lacs.
During the year the operating EBITDA stood at R 5307.62 lacs asagainst R 278.03 lacs in the previous year. Previous Year's EBITDA was impacted by certainpiracy issues with two of our movies resulting in loss of revenues from the theatricalsales.
During the year Profit before Tax stood at R 4671.89 lacs as againstR 225.98 lacs in the previous year. Profit Before Tax during the current year included anexceptional expense of R 905.07 lacs towards certain income tax provisions. The Corebusiness of the Company performed well as profit before tax is over 20 times of previousyear.
During the year Net Profit After Tax stood at R 1630.10 lacs ascompared to R 2938.42 lacs of previous year. Current year Net Profit After Tax is lowermainly on account of normal tax of R 205.85 lacs on capital gains tax on completion ofassessments R 708.98 lacs and deferred tax charge of R 2125.10 lacs on account of mergerof BMPL films production division for business losses in the previous year.
Normalised Profit After Tax (at normal income tax rate excluding anyimpact of deferred tax and exceptional tax items) for the year is R 3558.62 lacs ascompared to R 158.42 lacs in previous year. As per the Consolidated Accounts the totalrevenue from operations has decreased by 1.29% from R 41867.05 lacs to R 41331.79 lacsduring the year.
A detailed discussion on the business performance is presented in theManagement Discussion and Analysis Section of the Annual Report.
The Directors of the Company are pleased to recommend a Final Dividendof R 0.40 per equity share of the face value of R 2/- each for the financial year endedMarch 31 2018.
The Final Dividend subject to the approval of Members at the AnnualGeneral Meeting (AGM) on August 31 2018 will be paid to the Members whose name appear inthe Register of Members as on Friday August 24 2018. The total dividend for thefinancial year will absorb R 48767214/- including Dividend Distribution Tax of R8315036/-.
In terms of the provisions of Investor Education and Protection Fund(Accounting Audit Transfer and Refund) Rules 2016 and Investor Education and ProtectionFund (Awareness and Protection of Investors) Rules 2001 R 87221/- of unpaid/unclaimeddividend were transferred during the year to the Investor Education and Protection Fund.
TRANSFER TO RESERVES
The Directors of the Company do not propose to transfer any amount tothe General Reserve and an amount of R 22472.53 lacs is proposed to be retained in thestatement of profit and loss account.
The Company does not have any borrowings during the year under review.
During the year under review Authorized Share Capital of theCompany has been increased from R 260000000/- (Rupees Twenty Six Crores Only) to R360000000/- (Rupees Thirty Six Crores Only). Therefore as on March 31 2018 theAuthorized Share Capital of the Company is R 360000000/- (Rupees Thirty Six CroresOnly) divided into
15.00. 00.000 Equity Shares of R 2/- each and R 60000000/- (RupeesSix Crores Only) divided into 30000000 Preference Shares of R 2/- each.
During the financial year 2017-18 the Company has issued andallotted
2.52.00. 000 equity shares of the face value of R 2/- each at a priceof R 164/- which includes a premium of R 162/- per equity share on preferential allotmentbasis to Reliance Industries Limited (RIL). Therefore paid-up Equity Share Capital of theCompany as on March 31 2018 is R 202260886/- (Rupees Twenty Crores Twenty- Two LacsSixty Thousand Eight Hundred and Eighty-Six Only). Of the total paid up share capital ofthe Company 32.51% is held by Promoters and Promoter Group all in dematerialized formand balance of 67.49% is held by persons other than Promoters and Promoter Group out ofwhich majority is in dematerialized form.
The Company has neither issued shares with differential votingrights nor granted stock options or sweat equity.
During the year under review your Company has not accepted or renewedany amount falling within the purview of provisions of Section 73 of the Companies Act2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules 2014.Hence the requirement for furnishing of details relating to deposits covered underChapter V of the Act and the details of deposits which are not in compliance with theChapter V of the Act is not applicable.
CHANGE IN NATURE OF BUSINESS
During the year under review Scheme of Arrangement and Amalgamationbetween Balaji Telefilms Limited ("Company") with Balaji Motion Pictures Limited("BMPL") and Bolt Media Limited ("BOLT") ("Scheme") cameinto effect from December 15 2017 vide order of the National Company Law Tribunal Mumbaidated November 02 2017 as a result of which there has been change in the nature ofbusiness of the Company with the addition to carry out the film production business inthe existing main object clause of the Memorandum of Association.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations performance and future outlook ofthe Company and its businesses is given in the Management Discussion and Analysis whichforms part of the Annual Report.
As on March 31 2018 your Company has following Subsidiaries:
i) BALAJI MOTION PICTURES LIMITED (BMPL)
During the year under review the film production undertaking of BMPLhas demerged and is vested in Balaji Telefilms Limited w.e.f. December 15 2017. HoweverBMPL will continue with the business of distribution of motion pictures and films.
ii) ALT DIGITAL MEDIA ENTERTAINMENT LIMITED (ALT DIGITAL)
The Company's digital content business is housed under ALT Digitalwhich was incorporated as a wholly-owned subsidiary in July 2015. Through the subsidiarywe have made a strategic foray into the B2C digital content business segment to monetizethe incredible potential of original premium on-demand entertainment.
iii) CHHAYABANI BALAJI ENTERTAINMENT PRIVATE LIMITED (CBEPL)
CBEPL is a Kolkata-based subsidiary of Balaji Telefilms Limited (BTL).It has a glorious heritage of producing TV content and Web series in Bengali.
iv) MARINATING FILMS PRIVATE LIMITED (MFPL)
MFPL is a subsidiary of BTL. It owns the concept format and allproprietary rights and intellectual property rights in Box Cricket League (BCL) TheIndian Telly Calender (ITC) and Indian Television Style Awards (TSA).
v) BOLT MEDIA LIMITED (BOLT)
During the year under review BOLT ceased to be wholly-owned subsidiaryof your Company on account of merger with Balaji Telefilms Limited w.e.f. December 152017.
A detailed review of the operations performance and future outlook andits businesses during the year under review of the above mentioned subsidiaries form partof the Management Discussion and Analysis which forms part of the Annual Report.
EVENT MEDIA LLP
During the year under review the Company exited from Event Media LLPand it ceased to be designated partner w.e.f. January 15 2018.
SCHEME OF ARRANGEMENT AND AMALGAMATION
The National Company Law Tribunal Mumbai ("NCLT")
by an order dated November 02 2017 sanctioned the Scheme ofArrangement and Amalgamation between Balaji Telefilms Limited ("Company") withBalaji Motion Pictures Limited ("BMPL") and Bolt Media Limited("BOLT") ("Scheme") which came into effect from December 15 2017.Pursuant to the Scheme:
a. the Film Production Undertaking of BMPL has demerged and vested inthe Company in accordance with Sections 232 read with Section 230 of the Companies Act2013 and in compliance with Section 2(19AA) of the Income Tax Act 1961 and consequentlythe paid-up share capital of BMPL stands reduced to R 20000000/-(Rupees Two CroresOnly); and
b. Bolt has amalgamated with the Company in accordance with Sections232 read with Section 230 of the Companies Act 2013 and in compliance with Section 2(1B)of the Income Tax Act 1961.
EMPLOYEE STOCK OPTION PLAN (ESOP)
In order to motivate incentivize and reward employees the Companyinstituted Balaji Telefilms Limited ESOP 2017 ("ESOP 2017") which was approvedby the Members through Postal Ballot dated December 30 2017. The total number of optionsgranted under ESOP 2017 shall not exceed 5322655 (Fifty-Three Lacs Twenty-Two ThousandSix Hundred and Fifty- Five). Each option when exercised shall be converted intoequivalent number of shares of face value of R 2/- each. The applicable disclosure underSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014(the "ESOP Regulations") as at March 31 2018 is available on the website of theCompany at http://www.balajitelefilms.com/pdf/ ESOP 2017 Disclosure under SEBI(SBEB)%20Regulations 2014.pdf Certificate from M/s. Price Waterhouse Chartered Accountants LLPStatutory Auditors with respect to the implementation of ESOP Scheme would be placedbefore the Members at the ensuing AGM and a copy of the same shall be available forinspection at the Registered Office of the Company.
AUDITED FINANCIAL STATEMENTS OF THE SUBSIDIARIES
The Audited Financial Statements the Auditors' Report thereon and theBoard's Report with applicable annexures for the year ended March 31 2017 for the
Subsidiary Companies are annexed along with the Annual Report.
Further a statement containing the salient features of our subsidiariesin the prescribed format AOC-1 is appended as Annexure I to the Board's Report.
The Company has adopted a Policy for determining Material Subsidiariesin terms of Regulation 16(1) (c) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations').The Policy as approved by the Board is available on the Company's website athttp://balajitelefilms.com/ policv-determining-material-subsidiarv.php
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company is prepared inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Companies Act 2013 read with Rule7 of the Companies (Accounts) Rules 2014 forms part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
The Annual Financial Statements of the subsidiaries and relateddetailed information will be kept at the Registered Office of the Company as also at theRegistered Offices of the respective Subsidiary Companies and will be available toinvestors seeking information at any time.
MATERIAL EVENTS OCCURRED BETWEEN THE END OF FINANCIAL YEAR TO WHICH THEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material events have occurred between the end of financial year2017-18 and the date of this report which have effect over the financial position of theCompany except appointment of Mr. Sunil Lulla as Group Chief Executive Officer of theCompany w.e.f. May 25 2018.
DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPs)
Appointment and Resignation of Mr. Jyotindra Thacker
Mr. Jyotindra Thacker who was appointed as a Non-Executive AdditionalDirector on the Board of the Company w.e.f. September 01 2017 stepped down from theposition of Directorship w.e.f. March 22 2018 due to his pre-occupation in othermatters. The Board places on record its appreciation for his inspiring guidance and hiscontribution to improve the overall functioning of the Company.
Appointment of Mr. Anshuman Thakur and Ms. Jyoti Deshpande
During the financial year 2017-18 the Board of Directors hadappointed Mr. Anshuman Thakur and Ms. Jyoti Deshpande as a Non-Executive AdditionalDirector of the Company vide resolution passed by circulation on September 01 2017 andMarch 23 2018 respectively who will hold office upto the date of ensuing AGM and shallnot be liable to retire by rotation. Appropriate resolutions for the appointment of Mr.Anshuman Thakur and Ms. Jyoti Deshpande as Non-Executive Director are being placed for theapproval of the Members of the Company at the ensuing AGM. The Board recommends theirappointment as Non-Executive Director of the Company.
Retirement by rotation and subsequent re-appointment
Mr. Jeetendra Kapoor Non-Executive Director is liable to retire byrotation at the ensuing AGM pursuant to Section 152 and other applicable provisions ifany of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 (including any statutory modification(s) or re- enactment(s)thereof for the time being in force) the Articles of Association of the Company and beingeligible has offered himself for re-appointment. Appropriate resolution for hisre-appointment is being placed for the approval of the Members of the Company at theensuing AGM. The brief resume of the Director and other related information has beendetailed in the Notice convening the 24th AGM of the Company. The Board recommends hisre-appointment as Non - Executive Director of the Company.
Further the Board of Directors at their meeting held on May 19 2018pursuant to Regulation 17(1A) of the Listing Regulations as amended on May 09 2018 andthe applicable provisions of the Companies Act 2013 if any read with Rules madethereunder (including any statutory modification(s) or re-enactment(s) thereof for thetime being in force) and subject to his re-appointment at the ensuing AGM considered andapproved the continuation of Mr. Jeetendra Kapoor (DIN: 00005345) aged 76 years asChairman NonExecutive Director of the Company from April 01 2019 till the date heretires by rotation.
Appropriate resolution for the continuation of Mr. Jeetendra Kapoor asNon-Executive Director is being placed for the approval of the Members of the Company atthe ensuing AGM. The Board recommends his continuation as Non- Executive Director of theCompany.
Re-appointment of Managing Director & Joint Managing Director
The present term of appointment of Mrs. Shobha Kapoor and Ms. EktaKapoor as Managng Director and Joint Managing Director respectively is valid upto November09 2018. The Board has subject to the approval of the Members in the forthcoming AGMapprove the re-appointment of Mrs. Shobha Kapoor and Ms. Ekta Kapoor as Managng Directorand Joint Managing Director for another period of 5 (five) years post completion of thepresent term.
Re-appointment of Independent Directors
The first term of office of Mr. Duraiswamy Gunaseela Rajan Mr. PradeepKumar Sarda and Mr. Ashutosh Khanna as Independent Directors will expire on March 312019 and that of Mr. Devender Kumar Vasal on May 14 2019. The Board on the recommendationof Nomination and Remuneration Committee has recommended their re-appointment asIndependent Directors of the Company for a second term of 5 (five) consecutive years.Appropriate resolutions for their re-appointment is being placed for the approval of theMembers of the Company at the ensuing AGM. The brief resume of the Directors and otherrelated information has been detailed in the Notice convening the 24th AGM of the Company.
Change in Key Managerial Personnel (KMPs)
During the year under review Mr. Sameer Nair has resigned from theposition of Group Chief Executive Officer (KMP) w.e.f. July 15 2017.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from all IndependentDirectors under Section 149(7) of the Companies Act 2013 that they meet the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 16 ofthe Listing Regulations.
M/s. Price Waterhouse Chartered Accountants LLP were appointed asStatutory Auditors of the Company at the AGM held on August 31 2017 for a term of 5(five) consecutive years. They have confirmed that they are not disqualified fromcontinuing as Auditors of the Company. As per the provisions of Section 139 of theCompanies Act 2013 earlier the appointment of Auditors was required to be ratified byMembers at every AGM. However in accordance with the Companies Amendment Act 2017enforced on May 07 2018 by the Ministry of Corporate Affairs the appointment ofStatutory Auditors is not required to be ratified at every AGM.
In accordance with Companies (Cost Records and Audit) Rules 2014 CostAudit is not applicable to the Company.
Pursuant to the provisions of Section 204 of Companies Act 2013 andthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard has appointed M/s. Makarand M. Joshi & Co. Practising Company Secretaries asSecretarial Auditors of the Company for the financial year 2018-19.
The Report given by the Statutory Auditors on the financialstatements of the Company is part of this Report. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report.
Secretarial Audit Report issued by M/s. Makarand M. Joshi &Co. Practising Company Secretaries in form MR-3 for the financial year 2017-18 isappended as Annexure II to this Report. The said Report does not contain anyqualification reservation disclaimer or observation requiring explanation or commentsfrom the Board under Section 134(3) of the Companies Act 2013 except adverse remark whichreads as under:
"During the period under review the Company has complied with theprovisions of the Act Rules Regulations Guidelines Standards etc. mentioned aboveexcept that in few instance the Connected Persons has traded in trading window closure andthere were also contra trade instances for which the Company is in process to take actionand to intimate the same to SEBI."
With regards to remark contained in the Secretarial Audit ReportDirectors wish to state that:
1. Board has taken appropriate action as required under Company's Codeof Internal Procedures and Conduct for Regulating Monitoring and Reporting of Trading byInsiders (Code) and the same was intimated to Securities Exchange Board of India (SEBI).In addition to this the Company has also taken necessary steps to create awareness suchas conducting training sessions on SEBI (Prohibition of Insider Trading) Regulations 2015and Company's Code timely E-mails to Employees/Professionals.
2. The Company is also in the process of installing software so as totrack the trading carried out by the employees of the Company to curtail the instances ofInsider Trading.
COMMITTEES OF THE BOARD
In compliance with the requirements of Companies Act 2013 and ListingRegulations the Board had
constituted various Board Committees including Audit CommitteeNomination and Remuneration Committee Stakeholder Relationship Committee InternalComplaints Committee and Corporate Social Responsibility Committee. Details of scopeconstitution terms of reference number of meetings held during the year under reviewalong with attendance of Committee Members therein forms part of the Corporate GovernanceReport which forms part of the Annual Report.
DETAILS OF POLICY DEVELOPED AND IMPLEMETED BY THE COMPANY ON ITSCORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Corporate Social Responsibility Committee has been entrusted withthe responsibility of formulating and recommending to the Board a Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by theCompany monitoring the implementation of the framework of the CSR Policy and recommendingthe amount to be spent on CSR activities.
The Annual Report on CSR activities is annexed herewith as Annexure IIIto the Board's Report.
i) EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 anextract of Annual Return in Form MGT-9 is appended as Annexure IV to this report.
ii) REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the Statutory Auditors nor theSecretarial Auditors have reported to the Audit Committee under section 143(12) of theCompanies Act 2013 any instances of frauds committed against the Company by its officersor employees the details of which would need to be mentioned in this Report
iii) SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards.
iv) INTERNAL FINANCIAL CONTROLS SYSTEM AND ADEQUACY
The Board has adopted the policies and procedures for ensuring theorderly and efficient control of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds errorsreporting mechanisms the accuracy and completeness of the accounting records and timelypreparation of reliable financial disclosures.
v) VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company promotes ethical behaviour in all its business activitiesand has put in place a mechanism of reporting illegal or unethical behaviour. The Companyhas a Whistle Blower Policy wherein the employees are free to report violations of lawsrules regulations or unethical conduct to their immediate supervisor or such other personas may be notified by the management to the workgroups. The confidentiality of thosereporting violations is maintained and they are not subjected to any discriminatorypractice. The Whistle Blower Policy of the Company is also posted on the website of theCompany www.balajitelefilms.com.
vi) DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The requisite details containing the names and other particulars ofemployees in accordance with the provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is appended as Annexure V(a) to this Report.
vii) DISCLOSURE UNDER RULE 5(2) AND RULE 5(3) OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The requisite details relating to the remuneration of the specifiedemployees covered under
Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is appended as Annexure V(b) to this Report.
viii) RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013 and ListingRegulations your Company has formulated a Policy on Related Party Transactions which isalso available on the Company's website at http://balaiitelefilms.com/related-partv-transaction-policv.php. The Policy intends to ensure that properreporting approval and disclosure processes are in place for all transactions between theCompany and Related Parties. All Related Party Transactions entered during the year wereplaced before the Audit Committee for review and approval. Prior omnibus approval isobtained for Related Party Transactions on annual basis for transactions which are ofrepetitive nature and/or entered in the ordinary course of business and are at Arm'sLength Price. All Related Party Transactions entered during the year were in ordinarycourse of the business and on Arm's Length Price. No Material Related Party Transactionsi.e. transactions exceeding ten percent of the annual consolidated turnover as per thelast audited financial statements were entered during the year by your Company exceptinvestment of R 1500000000/- (Rupees One Hundred and Fifty Crores Only) in ALT DigitalMedia Entertainment Limited which is wholly-owned subsidiary of the Company however asper Section 188 of the Companies Act 2013 Members approval for such transaction need notbe sought if the transactions are between the holding company and its wholly-ownedsubsidiaries whose accounts are consolidated with the holding company and placed beforethe Members at the General Meeting for approval.
ix) BUSINESS RISK MANAGEMENT
The Company has in place a risk management Policy pursuant to theprovisions of Section 134 of the Act. The risk management framework enables identificationand evaluation of business risks and opportunities seeks to create transparency minimizeadverse impact on business objectives and enhance the Company's competitive advantage. Italso describes the risk management approach across the enterprise at various levels. Majorrisks identified by the business and functions are systematically addressed throughmitigation actions on a periodic basis. Existing control measures are evaluated againstthe relevant Key Performance Indicators.
x) FIXED DEPOSITS
During the year under review your Company has not accepted any fixeddeposit and as such no amount of principal or interest was outstanding as on the balancesheet date.
xi) PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans Guarantees and Investments covered under Section 186 of theCompanies Act 2013 forms part of the notes to the financial statements provided in thisAnnual Report.
xii) PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All employees are covered underthis policy. During the year 201718 no sexual harassment complaint has been registeredwith the Company.
xiii) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS
There are no significant material orders passed by theRegulators/Courts which would impact the going concern status of the Company & itsfuture operations.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
ENERGY CONSERVATION MEASURES TAKEN BY THE COMPANY
The provisions of Section 134(3)(m) of the Companies Act 2013relating to Conservation of Energy do not apply to the Company. However significantmeasures are taken to reduce energy consumption by using energy-efficient computers and bypurchasing energy- efficient equipments. We purchase computers laptops air conditionersetc. that meet environmental standards wherever possible and regularly upgrade oldequipments with more energy-efficient equipments. Currently we use Compact FluorescentLamp (CFL) fixtures to reduce the power consumption in the illumination system.
The provisions of Section 134(3)(m) of the Companies Act 2013relating to Technology Absorption do not apply to the Company. The Company's research anddevelopment initiative mainly consists of ideation of new subjects for our contentproduction business which are used in the creation of new storyline and tracks. Theexpenses incurred on such initiatives are not practically quantifiable.
The Company is an integrated player in the entertainment industry andour business is such that there is limited scope for new technology absorption adaptationand innovation. However the Company uses the latest technology wherever possible todeliver superior production value as a regular process.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The foreign exchange earnings in terms of actual inflows is R 673.50lacs (Previous Year: R 8.05 lacs) and the foreign exchange outgo in terms of actualoutflows is R 273.22 lacs (Previous Year R 504.45 lacs).
Your Company has been practicing the principles of good CorporateGovernance over the years and it is a continuous and ongoing process. A detailed Report onCorporate Governance practices followed by your Company in terms of the ListingRegulations together with a Certificate from the Statutory Auditors confirming compliancewith the conditions of Corporate Governance are provided separately in this Annual Report.
MEETINGS OF THE BOARD
During the year under review six (6) meetings of the Board ofDirectors were held the details of which are given in the Corporate Governance Reportwhich forms part of this Annual Report. The intervening gap between two Board Meetings wasnot more than One Hundred and Twenty Days.
NOMINATION & REMUNERATION POLICY
The current policy is to have an appropriate mix of ExecutiveNon-Executive and Independent Directors to maintain the independence of the Board andseparate its functions of governance and management. As on March 31 2018 the Boardcomprised of twelve Directors of whom two are Executive Directors two Non-ExecutiveNon-Independent Directors six Independent Directors and two Non-Executive AdditionalDirectors. The policy of the Company on Directors appointment and remuneration includingthe criteria for determining qualifications positive attributes independence of aDirector and other matters as required under Section 178(3) of the Companies Act 2013 isavailable on our website at http://balaiitelefilms.com/pdf/Nomination%20and%20Remuneration%20Policv.pdf
During the year under review clause 2 of Part C of the policy wasmodified which reads as under:
"The remuneration / compensation / commission etc. to the Director(Executive and Non-Executive) KMP and Senior Management. Personnel will be reviewed bythe Members of the Committee and Board annually or at the discretion of theCommittee."
MECHANISM FOR EVALUATING BOARD MEMBERS
One of the key functions of the Board is to monitor and review theBoard evaluation framework. The Board in consultation with the Nomination and RemunerationCommittee lays down the evaluation criteria for the performance evaluation ofExecutive/Non-Executive/ Independent Directors. The questionnaire of the survey is a keypart of the process of reviewing the functioning and effectiveness of the Board and foridentifying possible paths for improvement.
The following are the criteria on the basis of which the Directors areevaluated:
1) Knowledge to perform the role;
2) Time and Level of Participation;
3) Performance of Duties and Level of Oversight;
4) Professional Conduct and Independence.
Feedback on each Director is encouraged to be provided as a part of thesurvey.
Schedule IV of Companies Act 2013 mandates that annual performanceevaluation of Directors should be carried out by Independent Directors and annualperformance evaluation of Independent Directors should be carried out by other Directorsto the exclusion of Director being evaluated.
The evaluation of the Board as a whole its Committees and IndividualDirectors was conducted based on the criteria and framework adopted by the Board. Theevaluation process has been explained in the Corporate Governance Report which forms partof Annual Report. The Board approved the evaluation process results as collated by theNomination & Remuneration Committee of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them Directors make the following statements interms of Section 134(3)(c) of the Companies Act 2013:
a) In the preparation of the annual accounts for the financial yearended March 31 2018 the applicable accounting standards had been followed along withproper explanation relating to any material departures;
b) The Directors had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for the year under review;
c) Proper and sufficient care had been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) The annual accounts for the financial year ended March 31 2018 hadbeen prepared on a 'going concern' basis;
e) The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
f) The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
The Directors of the Company wish to acknowledge with gratitude andplace on record their appreciation to all stakeholders - shareholders investorscustomers suppliers business associates banks regulatory and governmental authoritiesfor their cooperation assistance and support. Further they also wish to thank theiremployees for their dedicated services.
For and on behalf of the Board of Directors
Chairman DIN: 00005345
Place: Mumbai Date: May 19 2018