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Diligent Media Corporation Ltd.

BSE: 540789 Sector: Media
NSE: DNAMEDIA ISIN Code: INE016M01021
BSE 00:00 | 27 Jan 0.66 -0.03
(-4.35%)
OPEN

0.68

HIGH

0.68

LOW

0.66

NSE 00:00 | 27 Jan 0.70 0.05
(7.69%)
OPEN

0.65

HIGH

0.70

LOW

0.65

OPEN 0.68
PREVIOUS CLOSE 0.69
VOLUME 686
52-Week high 0.78
52-Week low 0.31
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.66
Buy Qty 1044.00
Sell Price 0.71
Sell Qty 1575.00
OPEN 0.68
CLOSE 0.69
VOLUME 686
52-Week high 0.78
52-Week low 0.31
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.66
Buy Qty 1044.00
Sell Price 0.71
Sell Qty 1575.00

Diligent Media Corporation Ltd. (DNAMEDIA) - Director Report

Company director report

To the Members

Your Directors present the 14th Annual Report of your Company together with the AuditedFinancial Statements for the year ended March 31 2019 prepared as per Indian AccountingStandards prescribed under Section 133 of the Companies Act 2013.

FINANCIAL HIGHLIGHTS

The financial performance of your Company for the year ended March 31 2019 issummarized below:

(? in Lakhs)
Particulars 31-3-2019 31-3-2018
Revenue from Operations 11421.55 12403.51
Other Income 373.18 308.55
Total Revenues 11794.73 12712.06
Total Expenses 18684.79 18709.55
Loss before tax (6890.06) (5997.49)
Tax Expenses (1126.67) 3820.02
Net Loss after tax (5763.39) (9817.51)

There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which may have an adverse effect on thefinancial position of the Company. Based on internal financial control framework andcompliance systems established in the Company verified by the statutory and internalauditors and reviews performed by the management and/or the Audit Committee of the Boardyour Board is of the opinion that Company's internal financial controls were adequate andoperating effectively during the financial year 2018-19.

DIVIDEND

In view of the carry forward losses and losses during the year your Board expresstheir inability to recommend any dividend for the year under review.

REVIEW OF OPERATIONS

During the year under review your Company re-worked its business strategy to restrictthe quantum of loss and work towards reducing the same to attain better sustainabilityover next couple of years. As a step towards increasing operational e3ciency your Companystarted focusing both on cost optimization as well as revenue maximization. Your Companyoptimized its Marketing & Sales promotion cost carried out detailed review ofdistribution model to reduce redundancies and optimized sales team which resulted inoverall reduction of approx. 30% in other expenses. Your Company further evaluatedperformance of various editions and based on such review scaled down operations of Delhiedition and suspended publication and distribution of Jaipur edition of DNA Newspaper.Further with a focus to transform itself into a digital player too your company investedin its digital property "dnaindia.com" which has been gaining traction in termsof increase in page views. Based on authority granted by the Shareholders vide Specialresolution passed on September 21 2018 your Company sold its non-core assets comprisingof leasehold land admeasuring 14533.76 Sq. Mtrs. adjacent to the Printing Press at NaviMumbai at a consideration of ? 57.32 Crores. Your Company has been evaluating variousoptions to optimize cost and rework business strategies. Based on the cost optimizationexercise done during the year along with plans for more in near future coupled withstringent focus towards increasing revenue and cash flows your Company is committed toservice its obligations towards all its stakeholders at a much faster pace in times tocome.

CREDIT RATING

During the year under review in February 2019 ICRA Limited revised the Outlook inconnection with Credit rating ‘ICRA (A) (SO) Stable' assigned to Company'sNon-convertible Debenture of principal value of Rs. 250 Crores and ‘ICRA A2+ (SO)'assigned to the Non-Fund based facility of Rs. 20 Crores availed by the Company from YesBank Ltd to ‘Rating watch with negative implications' due to reduced financialflexibility of the Promoters as an after effect of decline in market capitalisation oflisted entities of Essel Group.

CORPORATE GOVERNANCE & POLICIES

Your Company is in strict compliance with the Corporate Governance requirementsmentioned under Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (‘Listing Regulations') and applicable provisions ofCompanies Act 2013. Additionally your company has complied with the requirements ofapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.

A Report on Corporate Governance as stipulated in the Listing Regulations as also aManagement Discussion and Analysis Report forms part of this Annual Report. Certificatefrom the Statutory Auditors of the Company M/s B S Sharma & Co. Chartered

Accountants confirming compliance with the provisions of Corporate Governance asstipulated under the Listing Regulations is annexed to the said Corporate GovernanceReport.

In compliance with the requirements of the Companies Act 2013 and the ListingRegulations your Board had approved various Codes and Policies including Code of Conductfor Directors & Senior Management Policy for determining Material Events Policy forPreservation of Documents and Archival of Records Related Party Transaction PolicyWhistle Blower and Vigil Mechanism Policy and Remuneration Policy. Further in accordancewith SEBI (Prohibition of Insider Trading) Regulations 2015 your Board had approved andimplemented Insider Trading Code and Policy on Fair Disclosure of Unpublished PriceSensitive Information. All these Codes and Policies along with the terms and conditions ofappointment of Independent Directors and brief on Directors Familiarization Programs canbe viewed on Company's website www.dnaindia.com. In line with the amendment to SEBI(Prohibition of Insider Trading) Regulations 2015 Company's Insider Trading Code andPolicy on Fair Disclosure of Unpublished Price Sensitive Information was revised witheffect from April 1 2019.

The Nomination & Remuneration Committee of your Board has fixed criteria fornominating a person on the Board which inter alia include desired size andcomposition of the Board age limit qualification/experience areas of expertise andindependence of individual. In line with this the Committee had also approvedin-principle that the initial term of an Independent Director shall not exceed 3 years.

DIRECTORS & KEY MANAGERIAL PERSONNEL

As at March 31 2019 your Board comprised of 4 (Four) Directors including two (2)Independent Directors one (1) Non-Executive Director and one (1) Executive Director.Independent Directors provide declarations both at the time of appointment and annuallyconfirming that they meet the criteria of independence as prescribed under Companies Act2013 and Listing Regulations. Additionally as per Listing Regulations the IndependentDirectors in the annual confirmation issued in April 2019 had confirmed that there are nocircumstances or situations which exist or may be reasonably anticipated that could impairtheir ability to discharge their duties with an objective independent judgement andwithout any external influence. During FY 18-19 your Board met 6 (six) times details ofwhich are available in the Corporate Governance Report annexed to this report.

During the year under review (i) Mr. Mukund Galgali resigned as Non-ExecutiveNon-Independent Director with effect from August 1 2018;

(ii) Mr. Ashok Venkatramani who was appointed as Non-Executive Non-Independent Directorfrom August 1 2018 resigned with effect from February 25 2019; and

(iii) Mr. Dinesh Kumar Garg was appointed as an Additional Director in the category ofNon-Executive Non-Independent Director with effect from March 30 2019.

Further subsequent to March 31 2019:

a) Mrs. Uma Mandavgane an Independent Director resigned with effect from May 17 2019citing conflict of interest due to impairment provision made by Zee Media Corporation Ltdan entity where she holds the position of Independent Director in connection with itsinvestments in the Preference Shares of the Company; and

b) Mr. Manoj Agarwal and Mrs. Shilpi Asthana were appointed as Additional Directors inthe category of Independent Directors of the Company with effect from May 29 2019. YourBoard places on record their appreciation for contributions of Mr. Mukund Galgali Mr.Ashok Venkatramani and Mrs. Uma Mandavgane during their tenure as Directors of theCompany. Further consequent to resignation of Mr. Ashok Venkatramani Mr. Dinesh KumarGarg was nominated as Non-Executive Chairman of the Board with effect from March 30 2019.As per Section 161 of the Companies Act 2013 Mr. Dinesh Kumar Garg Mr. Manoj Agarwaland Mrs. Shilpi Asthana shall hold the o3ce as Additional Directors of the Company tillensuing Annual General Meeting. Your Company has received notice from Member(s) proposingtheir appointment and requisite proposals seeking your approval for the appointment ofthese Directors shall form part of the Notice of ensuing Annual General Meeting. YourBoard recommends these proposals for approval of Shareholders. As per Section 152 of theCompanies Act 2013 Mr. A V Ramachandran retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has o3ered himself for reappointment. There-appointment of Mr. A V Ramachandran at the ensuing Annual General Meeting as a Directorretiring by rotation would not constitute break in his appointment as Executive Directorof the Company. Your Board recommends his re-appointment.

As at March 31 2019 Mr. A V Ramachandran Executive Director Mr. Dinesh AgarwalChief Financial Officer and Mr. Ankit Shah Company Secretary were nominated as KeyManagerial Personnel in compliance with the requirements of Section 203 of the CompaniesAct 2013. During the year under review Mr. Prathamesh Joshi resigned as CompanySecretary with effect from December 24 2018 and Mr. Ankit Shah was appointed as CompanySecretary with effect from March 30 2019.

BOARD EVALUATION

At a separate meeting of Independent Directors held without the presence of otherDirectors and management the Independent Directors had evaluated performance of the Boardand Board Committees based on various criteria and also performance of ExecutiveDirector. Independent Directors comment on outcome of evaluation process was taken onrecord by the Board and further the Board had in compliance with the requirements ofCompanies Act 2013 evaluated performance of all Independent Directors based on variousparameters including attendance contribution etc. The details of the evaluation processare set out in the Corporate Governance Report annexed to this Report.

BOARD COMMITTEES

In compliance with the requirements of Companies Act 2013 and Listing Regulationsyour Board had constituted Audit Committee Nomination & Remuneration Committee andStakeholders Relationship Committee. Details of constitution of these Committees whichare in accordance with regulatory requirements have been uploaded on the website of theCompany www.dnaindia.com. Further the details of constitution terms of reference numberof meetings of the Board Committees held during Financial year ended on March 31 2019along with the details of attendance of Committee Members therein forms part of theCorporate Governance Report annexed to this report.

AUDITORS

Statutory Audit: M/s. B. S. Sharma & Co. Chartered Accountants holding FirmRegistration No. 128249W were appointed as Statutory Auditors of the Company by theMembers at the 12th Annual General Meeting held on July 20 2017 to hold such o3ce forthe second term of five (5) years until the conclusion of 17th Annual General Meeting tobe held in the year 2022 subject to ratification by the Members at every Annual GeneralMeeting. Pursuant to an amendment to Section 139 of the Companies Act 2013 effective May7 2018 ratification by the Shareholders every year for the appointment of StatutoryAuditors was no longer required and accordingly the Notice of ensuing Annual GeneralMeeting does not include the proposal for seeking Shareholders approval for ratificationof Statutory Auditors appointment. The Company has received certificate of eligibilityfrom M/s. B. S. Sharma & Co. Chartered Accountants in accordance with the provisionsof the Companies Act 2013 read with rules thereunder along with a confirmation that theycontinue to hold valid Peer Review Certificate as required under Listing Regulations. Thereport of the Statutory Auditors to the Members forming part of this Annual report doesnot contain any qualification reservation or adverse remarks. The Auditors' Reporthowever includes an Emphasis of Matters drawing members attention to Note No. 53 to theNotes to financial statment in connection with preparation of financial statment on goingconcern basis inspite of losses and erosion of Networth. During FY 19 the StatutoryAuditors had not reported any matter under Section 143(12) of the Companies Act 2013 andtherefore no disclosures are required pursuant to Section 134(3) (ca) of the CompaniesAct 2013.

Secretarial Audit:

In terms of Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Secretarial Audit for the financialyear ended March 31 2019 was carried out by Mr. Satish K Shah Practicing CompanySecretary (holding ICSI Certificate of Practice No. 3142). Copy of the Secretarial Auditreport inter alia confirming compliance with applicable regulatory requirements bythe Company during the financial year ended March 31 2019 is annexed to this report.Additionally in compliance with the requirements of Listing Regulations as amended witheffect from April 1 2019 the Secretarial Auditor had also provided Annual SecretarialCompliance Report for financial year ended on March 31 2019 and the same was filed withStock Exchanges.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Requisite Information under Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 for the year ended March 31 2019 is annexedto this Report as Annexure A.

PARTICULARS OF EMPLOYEES

Your Company had 362 employees as at March 31 2019. The information required under theprovisions of Section 197 of the Companies Act 2013 read with Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 along with statementshowing names and other particulars of top 10 employees including employees drawingremuneration in excess of the limits prescribed under the said rules is annexed to thisreport as Annexure B.

DISCLOSURES

i. Particulars of loans guarantees and investments: Particulars of loansguarantees and investments made by the Company as required under Section 186(4) of theCompanies Act 2013 are given in Note No. 34 to the Financial Statements.

ii. Transactions with Related Parties: All contracts/ arrangements/transactions enteredby the Company during the financial year 18-19 with related parties were on arm's lengthbasis in the ordinary course of business and in compliance with applicable provisions ofthe Companies Act 2013 and Listing Regulations. During the year under review there havebeen no materially significant transactions of the types prescribed under Section 188(1)with related parties as defined under Section 2(76) of the Companies Act 2013 (Act) andaccordingly the information as prescribed under Section 134(3)(h) of the Act read withRule 8(2) of the Companies (Accounts) Rules 2014 in Form AOC-2 are not provided.

Related party transactions proposed to be entered into by the Company are placed beforethe Audit Committee for its approval and statement of all executed related partytransactions are placed before the Audit Committee for its review on quarterly basis. iii.Internal Financial Controls and their adequacy: Your Company has implemented internalfinancial controls and policies/processes for orderly and e3cient conduct of the businessincluding safeguarding of assets prevention and detection of frauds and errors ensuringaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information. iv. Deposits: Your Company has not accepted any public deposit asprescribed under Chapter V of the Companies Act 2013. v. Annual Return: In accordancewith recent amendment to Section 134 of the Companies Act 2013 Annual Return of theCompany for Financial Year ended March 31 2019 will be available on the website of theCompany www. dnaindia.com. vi. Sexual Harassment: Your Company has zero tolerance towardssexual harassment at workplace and has adopted a Policy on prevention prohibition andredressal of sexual harassment at workplace in line with the requirement of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 (POSHAct) and the Rules thereunder. In accordance with POSH Act your Company has constitutedInternal Complaints Committee. There was no complaint on sexual harassment during the yearunder review. vii. Regulatory Orders: No significant or material orders were passed by anyregulators or courts or tribunals which impact the going concern status and Company'soperations in future.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act 2013 inrelation tothe Annual Financial Statements for the Financial Year 2018-19 your Directors confirmthat:

a) The Financial Statements of the Company comprising of the Balance Sheet as at March31 2019 and the Statement of Profit & Loss for the year ended on that date have beenprepared on a going concern basis;

b) In preparation of the Financial Statements applicable accounting standards havebeen followed and there are no material departures;

c) Accounting policies selected were applied consistently and the judgments andestimates related to the financial statements have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2019 and of the loss of the Company for the year ended on that date; d) Properand sufficient care has been taken for maintenance of adequate accounting records inaccordance with the provisions of the Act to safeguard the assets of the Company and forpreventing and detecting fraud and other irregularities; e) Requisite Internal financialcontrols were laid down and that such financial controls are adequate and operatingeffectively; and f) Proper systems have been devised to ensure compliance with theprovisions of all applicable laws and such systems are adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to place on record its appreciation for thededication and commitment of employees shown at all levels. Your Directors also expresstheir gratitude for the valuable support and co-operation extended by all stakeholdersincluding banks financial institutions customers vendors service providers andregulatory authorities.

For and on behalf of the Board

Dinesh Kumar Garg

Chairman

A V Ramachandran

Executive Director

Place: Mumbai

Date : May 29 2019

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