Your Directors are pleased to present their Fourth Report together with the AuditedFinancial Statements (Standalone & Consolidated) for the financial year endedon March 31 2021.
Your Company's performance during the financial year ended on March 31 2021 alongwith previous year's figures is summarized below: (H in Lac)
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Total Income ||288 ||1771 ||25385 ||26087 |
|Earnings before interest tax depreciation and amortization (EBITDA) from continuing operations ||(511) ||85 ||3125 ||2579 |
|Add: Exceptional Item ||- ||- ||- ||- |
|Less: Depreciation and amortization expense ||9 ||20 ||5215 ||5290 |
|Less: Finance cost ||1114 ||1006 ||1213 ||1241 |
|Profit/(Loss) before tax from continuing operations ||(1634) ||(941) ||(3303) ||(3952) |
|Less: Tax expense || || || || |
| Current tax ||- ||- ||- ||- |
| Deferred tax charge/(credit) ||- ||133 ||1056 ||(650) |
|Total tax expense ||- ||133 ||1056 ||(650) |
|Profit/(Loss) for the year from continuing operations ||(1634) ||(1074) ||(4359) ||(3302) |
|Profit/(Loss) for the period ||(1634) ||(1074) ||(4359) ||(3302) |
|Add: Other Comprehensive Income (net of tax) || || || || |
|a) Items that will not to be reclassified to profit or loss ||28 ||(3) ||(77) ||(107) |
|b) Items that will be reclassified to profit or loss ||- ||- ||- ||- |
|Total Comprehensive Income for the year (net of tax) ||(1606) ||(1077) ||(4436) ||(3409) |
|Opening balance in Retained Earnings ||(1671) ||(594) ||(5026) ||(1617) |
|Add: Profit/(Loss) for the year ||(1634) ||(1074) ||(4359) ||(3302) |
|Less: Items of other Comprehensive Income recognized directly in Retained Earnings || || || || |
| Re-measurements of post-employment benefit obligation (net of tax) ||28 ||(3) ||(77) ||(107) |
|Total Retained Earnings ||(3277) ||(1671) ||(9462) ||(5026) |
In view of loss incurred by the Company during financial year ended on March 31 2021no dividend is recommended by the Directors.
COMPANY PERFORMANCE AND FUTURE OUTLOOK
A detailed analysis and insight into the financial performance & operations of yourCompany for the year under review and future outlook is appearing under the ManagementDiscussion and Analysis section which forms part of the Annual Report.
Your Company has a robust risk management framework to identify evaluate and mitigatebusiness risks. A detailed statement indicating development and implementation of a riskmanagement policy of the Company including identification of various elements of risk isappearing under the Management Discussion and Analysis section.
SCHEME OF ARRANGEMENT
On the recommendation/approval of Committee of Independent Directors and AuditCommittee the Board of Directors at its meeting held on February 11 2021 approved aComposite Scheme of Amalgamation under Sections 230 to 232 and other applicable provisionsof the Companies Act 2013 ( the Act') and the Rules framed thereunder between theCompany ("DCL") Next Mediaworks Limited ("NMW") and HT MobileSolutions Limited ("HTMS") (hereinafter collectively referred to as"Transferor Companies") and ("HTML"/"Transferee Company")and their respective shareholders and creditors (the Scheme') which is subject torequisite approvals. The Scheme envisages amalgamation of Transferor Companies with theTransferee Company. Accordingly upon the Scheme becoming effective the Company shallstand dissolved without winding up and the equity shareholders of the Company will beentitled to shares of the Transferee Company as per the fair equity share exchange ratioenshrined in the Scheme.
Among other benefits the Scheme will result in consolidation of businesses ofTransferor Companies under the Transferee Company whereby the Transferee Company will beable to provide an increased capability to offer a wider portfolio of products andservices to effectively address the change in consumer preferences and market dynamics.The combined abilitytointegrateinnovatecustomizeandbundletheofferings and services ofthe Transferee and Transferor Companies under a single platform and creation of asynergized go to market strategy will result in building a sustainable business.
The Scheme has been filed with both NSE and BSE for their no-objection and the sameis awaited.
HT Digital Streams Limited (HTDSL) is a material wholly-owned subsidiary of theCompany. Your Company did not have any associate or joint venture company in terms ofSection 2(6) of the Act during the year under review.
In terms of the applicable provisions of Section 136 of the Act Financial Statementsof HTDSL for the financial year ended on March 31 2021 are available for inspection atCompany's website at https://www.digicontent.co.in/wp-content/uploads/2021/08/HTDSL_Financial-Statement_31.03.2021. pdf.
A report on the performance and financial position of HTDSL in the prescribed FormAOC-1 is annexed to the Consolidated Financial Statements of the Company and hence notreproduced here. The Policy for determining Material Subsidiary(ies)' is availableon the Company's website at https://www.digicontent.co.in/wp-content/uploads/2019/07/Policy-for-detrmining-Material-Subsidiary.pdf#toolbar=0.
The contribution of HTDSL to the overall performance of your Company is outlined inNote no. 34 of the Consolidated Financial Statements of the Company for the financial yearended March 31 2021.
The Company's equity shares are compulsorily tradeable in electronic form. As of March31 2021 99.99% of the Company's total paid-up capital representing 58186241 equityshares is in dematerialized form. In view of the benefits offered by the depositorysystem members holding shares in physical mode are advised in their own interest toavail demat facility.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors on the recommendation of Nomination & RemunerationCommittee and after considering expertise experience and integrity of the proposedappointees accorded its approval to the following:
1. appointment of Mr. Ajay Relan (DIN: 00002632) and Mr. Vivek Mehra (DIN: 00101328)and Ms. Suchitra Rajendra (DIN: 07962214) as Non-executive Independent Directors (notliable to retire by rotation) w.e.f. April 18 2019 to hold office for 5 (five)consecutive years for a term up to March 31 2024 which was approved by the members intheir third Annual General Meeting (AGM) held on August 25 2020; and
2. appointment of Mr. Dinesh Mittal (DIN: 00105769) as Non-Executive Director w.e.f.March 12 2020 which was approved by the members in their third AGM held on August 252020.
In accordance with the applicable provisions of the Act Mr. Priyavrat Bhartia(DIN:00020603) Director liable to retire by rotation at the ensuing AGM being eligiblehas offered himself for re-appointment. Your Directors commend re-appointment of Mr.Priyavrat Bhartia as Director for approval of the members at the ensuing AGM.
Brief resume nature of expertise details of directorship(s) held in other companiesetc. of Mr. Priyavrat Bhartia who is proposed to be appointed/ re-appointed as Director atthe ensuing AGM along with his shareholding in the Company as required under SecretarialStandard-2 (General Meetings) and Regulation 36 of SEBI Listing Regulations is outlinedin the Notice of the ensuing AGM.
The Independent Directors of the Company have confirmed the following:
a) they meet the criteria of independence as prescribed under both the Act and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as SEBI Listing Regulations');
b) they have registered themselves on the data bank of Independent Directors maintainedby Indian Institute of Corporate Affairs;
All the Directors have confirmed adherence to the Company's Code of Conduct'.
Key Managerial Personnel
During the year under review following changes in the Key Managerial Personnel havetaken place:
a) Mr. Abhesh Verma resigned from the position of Chief Executive Officer (CEO) w.e.f.June 30 2020. Further on the recommendation of Nomination & Remuneration Committeethe Board of Directors appointed Mr. Puneet Jain as CEO w.e.f. July 15 2020.
b) Mr. Anup Sharma resigned from the position of Chief Financial Officer (CFO) w.e.f.November 26 2020. Further on the recommendation of Nomination & RemunerationCommittee and Audit Committee the Board of Directors appointed Mr. Ajay S. Nair as CFOw.e.f. January 14 2021.
In line with the requirements under the Act and SEBI Listing Regulations the Board ofDirectors undertook a formal annual evaluation of its own performance and that of itscommittees Chairperson & directors.
Nomination & Remuneration Committee approved questionnaires for evaluation ofperformance of the Board as a whole Board Committees (viz. Audit CommitteeStakeholders' Relationship Committee and Nomination & Remuneration Committee)Directors and the Chairperson on various criteria outlined in the Guidance Note onBoard Evaluation' issued by SEBI on January 5 2017.
The Directors were evaluated on parameters such as value addition to discussionslevel of preparedness willingness to appreciate the views of fellow directors commitmentto processes which include risk management compliance and control commitment to allstakeholders (shareholders employees vendors customers etc.) familiarization withrelevant aspects of company's business / activities amongst other matters. Similarly theBoard as a whole was evaluated on parameters which included its composition strategicdirection focus on governance risk management and financial controls.
A summary report of the feedback of Directors on the questionnaire(s) was considered bythe Nomination & Remuneration Committee and the Board of Directors. The Board wouldendeavour to use the outcome of the evaluation process constructively to improve its owneffectiveness and deliver superior performance.
AUDIT & AUDITORS
During the year under review the members of the Company at the AGM held on August 252020 approved the appointment of B S R and Associates Chartered Accountants("BSR") [Firm Registration No. 128901W] as Statutory Auditor to hold office fora term of 5 (five) consecutive years from the conclusion of the said AGM till theconclusion of AGM to be held in the calendar year 2025.
The reports of BSR on Annual Financial Statements (Standalone and Consolidated) for thefinancial year ended on March 31 2021 is a modified opinion.
Qualification of Statutory auditor in the Auditor's Report:
The Statutory Auditor has issued a modified opinion on the Standalone and ConsolidatedAnnual Financial Statements for FY-21 in relation to the Company's classification as aCore Investment Company pursuant to Master Direction- Core
Investment Companies (Reserve Bank) Directions 2016 as amended issued by the ReserveBank of India.
Management comments on above:
Further to the Company's representations to Reserve Bank of India (RBI) on the abovematter during FY-21 the Company received a communication from RBI stating that based onexamination of the financials of the Company it appears that the Company qualifies to bea Non-Banking Financial Company and therefore is required either - (a) to merge withanother NBFC or Non-Financial Company or (b) windup the business of NBFC or (c) apply forcertificate of registration as NBFC.
In response to the above communication of RBI the Company submitted a detailedrepresentation to RBI reiterating the Company's belief that on the basis of the latestaudited Financial Statements as on March 31 2020 the Company does not fulfill the incomecriteria of the Principal Business Criteria and therefore is not a NBFC. Acordingly theCompany is of the view that there is no need to register itself as a SystematicallyImportant-Core Investment Company.
The Company is already in the midst of a process of its merger with HT Media Limited afellow subsidiary (which is a Non-Financial Company) thereby fulfilling one of the threeoptions given by RBI mentioned above. For further details please refer note nos. 37 and40 to standalone and consolidated financial statements respectively.
Pursuant to the provisions of Section 204 of the Act and rules made thereunder theBoard of Directors appointed RMG & Associates Company Secretaries ("RMG")(Firm Reg. No. P2001DE16100) as Secretarial Auditor to conduct the Secretarial Auditfor the financial year ended March 31 2021 and their report is annexed herewith as "Annexure- A". The Secretarial Audit Report does not contain any qualificationreservation adverse remark or disclaimer.
Further Secretarial Audit of the material unlisted subsidiary viz. HT Digital StreamsLimited for FY-21 as required under Regulation 24A of SEBI Listing Regulations has beenconducted by Mr. N.C. Khanna Practicing Company Secretary. The said secretarial auditreport does not contain any qualification reservation adverse remark or disclaimer andis annexed herewith as "Annexure -B".
During the year under review the Statutory Auditor and the Secretarial Auditor havenot reported any instance of fraud to the Audit Committee pursuant to Section 143(12) ofthe
Act and rules made thereunder. Therefore no disclosure is required under Section134(3)(ca) of the Act.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered into by the Company with relatedparties during the year under review were in ordinary course of business of the Companyand on arms' length terms. The related party transactions were placed before the AuditCommittee for review and/or approval. During the year the Company did not enter into anycontract/ arrangement/transaction with related party which could be consideredmaterial' in accordance with the Company's Policy on Materiality of anddealing with Related Party Transactions' (available on Company's website athttps://www.digicontent.co.in/wp-content/uploads/2020/04/ RPT-Policy.pdf) and thereforethe disclosure of related party transactions in Form AOC-2 is not applicable.
Reference of Members is invited to note nos. 30 and 30A of the Standalone FinancialStatements which set out the related party disclosures as per IND AS-24.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act your Directors state that:
(i) in the preparation of the annual accounts for the financial year ended on March 312021 the applicable accounting standards have been followed and there are no materialdepartures.
(ii) such accounting policies have been selected and applied consistently and judgmentsand estimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on March 31 2021 and of the loss of theCompany for the year ended on March 31 2021;
(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern' basis;
(v) proper internal financial controls were in place and that such internal financialcontrols were adequate and operating effectively. Also refer para (vi) below forcompliance with applicable laws and regulations; and
(vi) systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively. Further asexplained in Note no. 37 to Standalone Financial Statements and Note no. 40 toConsolidated Financial Statements a matter is under discussion with RBI regarding whetherthe Company technically meets the Principal Business Criteria' so as to beclassified as a NBFC and also a Systemically Important Core Investment Company (SI-CIC).In the above connection the Company has made a detailed representation to RBI wherein ithas been submitted that the Company need not be registered as a NBFC and SI-CICconsidering the income tests criteria and the proposed scheme of arrangement foramalgamation of the Company with HT Media Limited (fellow subsidiary company) which hasalready been filed with the stock exchanges for their no objection.
DISCLOSURES UNDER THE COMPANIES ACT 2013
Borrowings and Debt Servicing: During the year under review your Company has metall its obligations towards repayment of principal and interest on loans availed if any.
Particulars of loans given investments made guarantees / securities given: Thedetails of investments made and loans/ guarantees/securities given as applicable aregiven in note nos. 5 6A 6B and 36 to the Standalone Financial Statements.
Board Meetings: A yearly calendar of board meetings is prepared and circulated inadvance to the Directors. During the financial year ended March 31 2021 the Board metseven times on May 6 2020 July 1 2020 July 21 2020 October 20 2020 January 142021 February 11 2021 and March 22 2021. For further details regarding these meetingsMembers may please refer the Report on Corporate Governance which forms part of the AnnualReport.
Committees of the Board: At present four standing committees of the Board ofDirectors are in place viz. Audit Committee Nomination & RemunerationCommittee Banking & Finance Committee and Stakeholders' Relationship Committeewhich have been constituted in accordance with the applicable provisions of the Act andSEBI Listing Regulations. During the year under review recommendations of thesecommittees were accepted by the Board of Directors.
Remuneration Policy: The Remuneration Policy of the Company on appointment andremuneration of Directors Key Managerial Personnel & Senior Management as prescribedunder Section 178(3) of the Act and SEBI Listing Regulations is available on theCompany's website at https://www.digicontent.co.in/wp-content/uploads/2019/08/Remuneration-Policy.pdf. The Remuneration Policy includes inter-alia the criteriafor appointment of Directors KMPs Senior Management Personnel and other employees theirremuneration structure recommendation to the Board all remuneration in whatever formpayable to Senior Management and disclosures in relation thereto. Further there was nochange in the Remuneration Policy during the year under review.
Vigil Mechanism: The Vigil Mechanism as envisaged in the Act & rules madethereunder and SEBI Listing Regulations is addressed in the Company's "WhistleBlower Policy". In terms of the Policy directors/employees/stakeholders of theCompany may report concerns about unethical behaviour actual or suspected fraud or anyviolation of the Company's Code of Conduct. The Policy provides for adequate safeguardsagainst victimization of the Whistle Blower. The Policy is available on the Company'swebsite at https://www. digicontent.co.in/wp-content/uploads/2021/02/Whistle_Blower_Policy_DCL.pdf.
Particulars of employees and related disclosures: In accordance with the provisionsof Section 197(12) of the Act read with Rule 5(2) & (3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 details of employees remunerationare set out in the "Annexure - C" to this Report. In terms of theprovisions of Section 136(1) of the Act the Board's Report is being sent to the Memberswithout this annexure. Any Member interested in obtaining such information may write tothe Company Secretary at the Registered Office of the Company.
Disclosures under Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as"Annexure - D".
Annual Return: In terms of Section 92(3) read with Section 134(3)(a) of theCompanies Act 2013 the Annual Return (Form MGT-7) for FY-20 and FY-21 are available onthe website of the Company at https://www.digicontent.co.in/wp-content/uploads/2021/08/DCL_Annual-return_31-03-2020.pdf and https://www.digicontent.co.in/wp-content/uploads/2021/08/DCL_Annual-Return-MGT-7_2021.pdf.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:
The Company is in the business of Entertainment and Digital Innovation which does notinvolve any manufacturing process. Accordingly most of the information required underSection 134(3)(m) of the Act are not applicable. Nevertheless the information asapplicable is outlined as under:
Conservation of Energy
Though the operations of the Company are not energy intensive steps have been taken toconserve energy wherever possible. There is a constant endeavor to optimize utilizationof available resources and also conserve energy at various location(s). Some of theinitiatives include:
Replacement of conventional lighting system with LED lighting
Installation of star rated energy efficient air conditioners
Use of energy efficient electronic devices to curtail energy consumption asmuch as possible
Technology Adoption Adaption & Innovation
During the year the Company has not invested in any specific technology apart from thenormal end user devices. Also the Company takes adequate measures at the time ofdisposing off the device(s) at the end of life of the particular asset.
Foreign Exchange Earnings and Outgo
Foreign Exchange earned and outgo in terms of actual inflows during the year: Nil
INFORMATION ON MATERIAL CHANGES AND COMMITMENTS
No material changes/commitments have occurred after the end of financial year 2020-21and till the date of this report which may affect the financial position of your Company.
Your Directors state that the Secretarial Standards (i.e. SS-1 and SS-2) relating toMeetings of the Board of Directors' and General Meetings' have been followedby the Company.
The report on Corporate Governance in terms of SEBI Listing Regulations formspart of this Annual Report. The certificate issued by Company Secretary-in-Practice isannexed herewith as "Annexure E".
Your Directors state that during the year under review no disclosure is required inrespect of following matters as there were no transactions/events in relation thereto:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
There was no change in the share capital of the Company during the year under review.
During the year under review the provisions relating to Corporate SocialResponsibility (CSR) enshrined under Section 135 of the Act were not applicable on theCompany.
The Company does not have any Employee Stock Option Scheme.
The Company has not transferred any amount to the General Reserve during the year underreview.
No significant or material order was passed by any Regulator Court or Tribunal whichimpact the going concern' status and Company's operations in future.
During the year under review there was no change in the nature of business of theCompany.
The Company is not required to maintain cost records as per Section 148(1) of the Act.
There were no proceeding initiated/ pending against your Company under the Insolvencyand Bankruptcy Code 2016.
There was no instance of onetime settlement with any Bank or Financial Institution.
Your Company has in place internal financial controls with reference to the financialstatements. The internal control system is supplemented by an extensive program ofinternal audits and their review by the management. The in-house internal audit functionsupported by professional external audit firms conduct comprehensive risk focused auditsand evaluates the effectiveness of the internal control structure across locations andfunctions on a regular basis. In addition to internal audit activities Company has alsodeveloped an internal financial control framework to periodically review the effectivenessof controls laid down across all critical processes. The Company has set-up anonline compliance management tool with a centralized repository to cater to the statutorycompliance requirements.
PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
Your Company adheres to a strict policy to ensure safety of women employees atworkplace. The Company is fully compliant with the provisions of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and has constitutedan Internal Committee (IC) to redress any complaints regarding sexual harassment. TheCompany's policy in this regard is available on the employee's intranet.
The Company conducts regular classroom training sessions for employees and members ofIC and has also rolled-out an online module for employees to increase awareness. Nocomplaint was reported to IC during the year under review.
Your Directors place on record their sincere appreciation for the co-operation extendedby all stakeholders including government authorities shareholders investors customersbanks vendors and suppliers. Your Directors also place on record their deep appreciationof the committed services of the executives and employees of the Company.
| ||For and on behalf of the Board |
| ||Priyavrat Bhartia |
|Date: June 15 2021 ||Chairman |
|Place: New Delhi ||DIN:00020603 |