Colorchips New Media Ltd.
|BSE: 540023||Sector: Media|
|NSE: N.A.||ISIN Code: INE621I01026|
|BSE 00:00 | 23 Apr||107.80||
|NSE 05:30 | 01 Jan||Colorchips New Media Ltd|
|Mkt Cap.(Rs cr)||183|
|Mkt Cap.(Rs cr)||183.37|
Colorchips New Media Ltd. (COLORCHIPSNEW) - Director Report
Company director report
Your Directors have pleasure in presenting herewith the 33rdAnnual Report onthe business of the Company together with the Financial Statements for the financial yearended March 31 2018.
(Amount in Rs.)
Considering the business needs of the Company your Directors do not propose anydividend for FY 2017-18.
The Company declared an interim dividend of 2% for the FY 2016-17 on September 08 2016which was ratified by the shareholders as final dividend in the 32nd AGM of theCompany held on September 29 2017.
CHANGES IN SHARE CAPITAL
There is no change in the share capital of the Company during the year.
TRANSFER TO RESERVES
No amount has been transferred to the general reserves during the year under review.Details of reserves and surplus are disclosed in Note No 13 of the financial statements.
The Company has neither accepted nor renewed any deposits from public as defined underthe provisions of Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014.
DETAILS OF DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Ramabhotla Srinivasa Sudhish (DIN: 00027816) Chairman and Managing Director of theCompany is liable to retire by rotation being eligible offers himself for re-appointment.
There were following changes during the year under review :
Subsequently the following changes took place on the Board of the Company:
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the CompaniesAct 2013.
The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance.
The aspects covered in the evaluation included the contribution to and monitoring ofcorporate governance practices participation in the long-term strategic planning and thefulfilment of Directors' obligations and fiduciary responsibilities including but notlimited to active participation at the Board and Committee meetings. The Chairman of theBoard had one-on-one meetings with the Independent Directors. These meetings were intendedto obtain Directors' inputs on effectiveness of Board/Committee processes. Further theIndependent Directors at their meeting reviewed the performance of Board Chairman of theBoard and of Non Executive Directors.
M/s. S N Murthy & Co. Chartered Accountants (FRN:002217S). Hyderabad thestatutory auditors of the Company were appointed in the 29th annual general meeting of theCompany for a term of 5 years subject to ratification by the members of the Company eachyear. As per the amendment effective from May 7 2018 the first proviso to Section 139(1)in connection with ratification of appointment of statutory auditors has now been omittedfrom the Companies Act and accordingly the ratification of the appointment of thestatutory auditors by shareholders in annual general meetings is not being consideredhenceforth.
The Auditors' Report does not contain any disqualification. Notes to Accounts andAuditors remarks in their report are self-explanatory and do not call for any furthercomments. There were no frauds reported by the auditor in his Audit Report.
SECRETARIAL AUDIT REPORT:
Sarada Putcha Practicing Company Secretary (C.P. No. 8735) conducted the secretarialaudit of the Company for the financial year 2017-18 as required under Section 204 of the
Companies Act 2013 and rules there-under. The secretarial audit report for FY 2017-18forms part of this Annual Report as Annexure - I. The report contains certainqualifications/observations as follows:
Management response to qualifications/observations of Secretarial Auditor:
1. Due to procedural difficulties there was delay in filing the financial statementsfor the quarter ended 30.06.2017 in XBRL mode voting results of Annual General Meetingheld on 29.09.2017 yearly disclosure for the year ended 31.03.2018 under Regulation 30 ofSEBI (SAST) Regulations 2011 after prescribed period of time. No penality was imposed bythe regulatory authorities and all the above matters stands resolved.
2. Filing of forms MGT 14 MGT 10 & IEPF 2 with the Registrar of Companies has beeninadvertently missed during the year under view. The said forms are in process of filingwith the concerned authority.
The Board is acutely conscious of its compliance obligations under various laws and duecare will be taken to avoid such instances in future.
M/s P K Rao & Co. Chartered Accountants(FRN: 014554S) were appointed as InternalAuditors of the Company for the financial year 17-18.
Acquisition of Kirksville Hospitality INC (step down WOS):
The Company's Wholly Owned Subsidiary ("WOS") MIENT HospitalityLLC" acquired 100% stake in Kirksville Hospitality Inc in USA during the year underreview. Further due to non fulfillment of certain clauses of acquisition agreement theStep down subsidiaries namely Kirksville Hospitality Inc has been disposed off.
Acquisition of J & K Hotels LLC(Associate Company OF WOS):
The Company's Wholly Owned Subsidiary MIENT Hospitality LLC" acquired 20%stake in stake in J&K Hotels LLC an Indiana Limited Company in USA during the yearunder review. Further due to non fulfillment of certain clauses of acquisition agreementassociate Company J & K Hotels LLC an Indiana Limited Company has been disposed off.
Change of Name to Colorchips New Media Limited
The Board in its meeting held on August 28 2018 approved the change of name of theCompany to Colorchips New Media Limited subject to the approval of shareholders BSE Ltdand the Registrar of Companies Hyderabad
The Central Registration Centre (CRC) Delhi has approved the said name vide theirletter dated July 26 2018.
The resolution for change of name is Item No 4 of the Notice of the 33rdAGMforming part of this annual report.
Consolidation of Equity shares
The Board has approved consolidation of equity shares from Re .1/- to Rs.10/- in itsBoard Meeting held on August 28 2018 subject to the approval of the shareholders and BSELtd.
The resolution for consolidation of equity shares is Item No.5 of the Notice of the 33rdAGM forming part of this annual report.
Acquisition of business of Vega Music Private Limited
Your Company has acquired the entire business of Vega Music Private Limited to give aboost to its existing business operations on the digital media front. The acquisitionincludes about 300 audio titles over ten digital channels which include popular channelssuch as Vega Music Devotional Vega Kannada songs Vega Tamil etc.
The Audit Committee of the Company is duly constituted. The following are the members:
NOMINATION AND REMUNERATION POLICY
A committee of the Board has been formed which is named as "Nomination andRemuneration Committee" which has been entrusted with the task to recommend a policyof the Company on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters and to frame proper systems for identification appointment of Directors &KMPs Payment of Remuneration to them and evaluation of their performance and to recommendthe same to the Board from time to time. Nomination and Remuneration Policy of the Companyis available on Company's website www.millitoons.com.The following is the composition of the Nomination and Remuneration Committee:
Mr. Srinivasa Murthy Banda : Chairperson and Member
INVESTOR GRIEVANCE COMMITTEE
The following is the composition of the Investor Grievance Committee: Mr. SrinivasaMurthy Banda : Chairperson and Member
Mr. RamabhotlaSrinivasaSudhish : Member
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 in connection with corporatesocial responsibility are not applicable to the Company.
A vigil mechanism for directors and employees to report genuine concerns has beenestablished. The vigil mechanism policy has been uploaded on the website of the Company.
RISK MANAGEMENT POLICY
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. There are no material risks which threaten the very existence of thecompany.
INTERNAL FINANCIAL CONTROLS
The Company has adequate internal financial controls which commensurate with the sizeof the business of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 Your Directors' confirm that:
i. in preparation of annual accounts for the financial year ended 31stMarch 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year endedMarch 31 2018 and of the profit and loss of the Company for the year;
iii. the Directors have taken proper and sufficient care for their maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. the Directors had prepared the annual accounts on a going concern basis;.
v. the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi. the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE OUTGO
Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is enclosed herewith as Annexure-II.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as
The Boards Report along with annual return and other annexures are also uploaded at theinvestor section of the Company's website - www.millitoons.com
During the year under review seven (07) board meetings were held on 28.04.201729.05.2017 26.08.2017 04.09.2017 14.09.2017 14.12.2017 and 14.02.2018. All theDirectors of the Company attended all the Board Meetings.
Audit Committee meetings were held on 29.05.2017 04.09.2017 14.09.201714.12.2017 and14.02.2018. Nomination and Remuneration Committee meetings were held on 29.05.2017 and26.08.2017. All the members of the respective committees attended all the committeemeetings conducted.
PARTICULARS OF EMPLOYEES
Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 during the financial year no employee was in receipt ofremuneration of Rs. 1.02 Crore or more or where employed for part of the year was inreceipt of Rs. 8.5 Lakh or more a month.
Disclosure under Rule 5 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is enclosed as
Annexure - IV.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report is enclosed as Annexure - V to thisreport. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of investment made by the Company are given in the Notes to the FinancialStatements.
During the year under review the Company has not granted any Loans or given guaranteescovered under Section 186 of the Companies Act 2013.
A separate report on Corporate Governance is provided together with a Certificate fromthe Statutory Auditors of the Company regarding compliance of conditions of CorporateGovernance as stipulated under Listing Regulations. A Certificate from the MD and CFO ofthe Company in terms of Listing Regulations inter alia confirming the correctness of thefinancial statements and cash flow statements adequacy of the internal control measuresand reporting of matters to the Audit Committee is also annexed.
RELATED PARTY TRANSACTIONS
There were no materially significant related party transactions with the Company'sPromoters Directors Management or their relatives which could have had a potentialconflict with the interests of the Company.
DETAILS OF SUBSIDIARIES. JOINT VENTURES AND ASSOCIATE COMPANIES MIENT Hospitality LLC
MIENT Hospitality LLC is Company's Wholly Owned Subsidiary and was established onDecember 19 2016 with the object of carrying the business of acquiring & runninghotels and related businesses. The brief operational performance of the WOS is as givenbelow:
(Amount in Rs.)
There were no operations in the Company during the year.
The contribution of the said subsidiary has been accordingly taken for the purpose ofconsolidation.
KIRKSVILLE HOSPITALITY. INC
During the year under review the Company's Wholly Owned Subsidiary MIENTHospitality LLC acquired 100% stake in Kirksville Hospitality INC in USA byvirtue of which Kirksville Hospitality Inc becomes step down subsidiary of the Company.
The brief operational performance of the WOS is as given below:
The contribution of the said subsidiary has been accordingly taken for the purpose ofconsolidation.
Subsequently due to non-fulfillment of certain clauses by seller under acquisitionagreement Kirksville Hospitality INC USA ceased to be a Wholly Owned Subsidiary Companyof the Company's wholly owned subsidiary MIENT Hospitality LLC USA w.e.f February 122018.
J&K Hotels LLC
During the year under review the Company's Wholly Owned Subsidiary also acquired 20%stake in J&K Hotels LLC an Indiana Limited Company in USA.
Subsequently due to non-fullfillment of certain clauses by seller under acquisitionagreement J&K Hotels LLC USA ceased to be associate Company of the Company's whollyowned subsidiary MIENT Hospitality LLC USA w.e.f July 13 2018.
Hence Kirksville Hospitality INC USA ceased to be a Subsidiary Company of theCompany's wholly owned subsidiary MIENT Hospitality LLC USA during the financial year2017-2018 and J&K Hotels LLC an Indiana Limited Company in USA also ceased tobe associate Company of the Company's wholly owned subsidiary MIENT Hospitality LLC USA .
The Company does not have any associate Company or joint ventures as on March 31 2018.
Pursuant to the provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of your Company's Subsidiary in Form AOC-1 isattached to the Financial Statements of your Company as Annexure - VI
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
3. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
4. No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year and date of report.
5. No change in the nature of business of the Company.
Maintenance of cost recordsas specified by the Central Government under sub-section (1)of section 148 of the Companies Act 2013 is not applicable to the Company.
The Company has complied with all the applicable provisions of the secretarialstandards as applicable to the Company.
Your Directors further state that during the year under review there were no casesfiled/registered pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the company has complied with provisions relatingto the constitution of Internal Complaints Committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Directors place on record their appreciation of the continued patronage extendedto the Company by bankers dealers customers suppliers employees and shareholders. Thetrust reposed in your Company by its esteemed customers helped stabilized growth duringthe year review.
Your Company also acknowledges the support and guidance received from its Bankersother government agencies during the year under review and look forward to continuingsupport.