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H T Media Ltd.

BSE: 532662 Sector: Media
NSE: HTMEDIA ISIN Code: INE501G01024
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VOLUME 30086
52-Week high 44.56
52-Week low 13.85
P/E
Mkt Cap.(Rs cr) 390
Buy Price 16.00
Buy Qty 200.00
Sell Price 17.25
Sell Qty 100.00
OPEN 17.00
CLOSE 16.81
VOLUME 30086
52-Week high 44.56
52-Week low 13.85
P/E
Mkt Cap.(Rs cr) 390
Buy Price 16.00
Buy Qty 200.00
Sell Price 17.25
Sell Qty 100.00

H T Media Ltd. (HTMEDIA) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their Report together with the Audited FinancialStatements (Standalone and Consolidated) for the financial year ended on MarcRs. 31 2019.

FINANCIAL RESULTS (STANDALONE)

Your Company’s performance during the financial year ended on MarcRs. 31 2019along with previous year’s figures is summarized below: (Rs. in Lacs)

Particulars 2018-19 2017-18
Total Income 144683 159559
Earnings before interest tax depreciation and amortization (EBITDA) 12123 42695
from continuing operations
Add: Exceptional Item (11211) (1405)
Less: Depreciation 8269 9642
Less: Finance cost 9844 6960
Profit/(Loss) before tax from continuing operations (17201) 24688
Less: Tax Expense
• Current tax 426 2944
• Deferred tax charge/(credit) (3733) 628
Total tax expense (3307) 3572
Profit for the year from continuing operations (13894) 21116
Profit/(Loss) before tax from discontinued operations - 394
Tax charge including deferred tax pertaining to discontinued operations - 136
Profit/(Loss) from discontinued operations after tax - 258
Profit/(Loss) for the period (13894) 21374
Add: Other Comprehensive Income (net of tax)
a) Items that will not be reclassified to profit or loss (29) 108
b) Items that will be reclassified to profit or loss (982) (52)
Total Comprehensive Income for the year (net of tax) (14905) 21430
Opening balance in Retained Earnings 133283 112779
Add: Profit/ (Loss) for the year (13894) 21374
Less: Items of other Comprehensive Income recognized directly in Retained Earnings
• Re-measurements of post-employment benefit obligation (net of tax) 29 (108)
Less : Amounts reclassified from FVTOCI 5493
Less: Dividend paid 931 931
Less: Tax on Dividend 57 56
Add: Adjustment of accumulated surplus of HT Media Employee Welfare Trust 9 9
Total Retained Earnings 112888 133283

DIVIDEND

Your Directors are pleased to recommend a dividend of H0.40 per Equity Share of RS. 2/-i.e. @ 20% (previous year – H0.40 per Equity Share of H2/- i.e. @ 20%) for thefinancial year ended on MarcRs. 31 2019 and seek your approval for the same. In view ofabsence of profit in FY 19 dividend is recommended out of the accumulated profits earnedin previous years in terms of Section 123 of the Companies Act 2013 read with theCompanies (Declaration and Payment of Dividend) Rules 2014.

The proposed equity dividend pay-out (including Corporate Dividend Distribution Tax)would entail an outflow of H11.22 Crores (previous year H9.87 Crores).

The Dividend Distribution Policy framed pursuant to the provisions of Regulation 43A ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations") is appearing as"Annexure-A" and is also available on the Company’s website viz.www.htmedia.in.

COMPANY PERFORMANCE AND FUTURE OUTLOOK

A detailed analysis and insight into the financial performance and operations of yourCompany for the year under review and future outlook is appearing in ManagementDiscussion and Analysis which forms part of the Annual Report.

SCHEME OF ARRANGEMENT

Entertainment & Digital Innovation Business

With a view to create a separate entity to support the 'Entertainment & DigitalInnovation Business' of the Company and to capitalize the growth opportunities in afocussed manner the Board of Directors approved a Scheme of Arrangement u/s 230 to 232read with Section 66 and other applicable provisions of the Companies Act 2013 betweenthe Company and Digicontent Limited and their respective shareholders and creditors("Scheme") which inter-alia envisaged demerger of ‘Entertainment& Digital Innovation Business’ (Demerged Undertaking) of the Company andtransfer and vesting thereof to and in Digicontent Limited on a 'going concern' basis.

The Scheme was sanctioned by Hon’ble National Company Law Tribunal(‘NCLT’) New Delhi Bench on MarcRs. 7 2019 and has become effective from theAppointed Date i.e. MarcRs. 31 2018 (close of business hours). Accordingly in terms ofthe Scheme the eligible shareholders of the Company have been allotted equity shares ofDigicontent Limited in the ratio of 4:1. Digicontent Limited has filed the application forlisting of its equity shares on NSE and BSE.

Consequent upon effectiveness of the scheme and allotment of Equity Shares DigicontentLimited and its subsidiary HT Digital Streams Limited have ceased to be subsidiaries ofthe Company w.e.f April 5 2019.

ACQUISITION OF MAJORITY STAKE IN NEXT MEDIAWORKS LIMITED AND NEXT RADIO LIMITED

With a view to consolidate the FM Radio business of the Company; HT Music andEntertainment Company Limited (Wholly owned subsidiary); Next Mediaworks Limited(NMW); and Next Radio Limited (NRL) (subsidiary of NMW) a Composite Scheme of Arrangementunder the Companies Act 2013 (Scheme) was approved by the Board of Directors on August 82018. Keeping in view the wider interest of all stakeholders and after considering all therelevant factors the Board decided to withdraw from the Scheme on December 20 2018.

Thereafter the Board decided to acquire majority equity stake in NMW (i.e 51%) by wayof a combination of Open Offer to the public shareholders of NMW and direct acquisition ofNMW’s shares from the existing promoters of NMW. The Board also approved acquisitionof 48.6% stake in NRL.

Upon conclusion of the above acquisition of majority equity stake in NMW on April 152019 NMW NRL and Syngience Broadcast Ahmedabad Ltd. have become subsidiaries of yourCompany.

NRL operates FM Radio stations under the brand name "Radio One" in DelhiMumbai Chennai Kolkata Bengaluru Pune and Ahmedabad.

RISK MANAGEMENT

Your Company has a robust risk management framework to identify evaluate and mitigatebusiness risks. The Company has constituted a Risk Management Committee of Directors whichreviews the identified risks and appropriateness of management’s response tosignificant risks. A detailed statement indicating development and implementation of arisk management policy for the Company including identification of various elements ofrisk is appearing in the Management Discussion and Analysis.

EMPLOYEE STOCK OPTION SCHEME

The information required to be disclosed pursuant to the provisions of the Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 readwith SEBI’s circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16 2015 ("SEBIESOP Regulations") is available on the Company’s website viz.www.htmedia.in. The ‘HTML Employee Stock Option Scheme’ and ‘HTML EmployeeStock Option Scheme – 2009’ are in compliance with SEBI ESOP Regulations.Further in accordance with SEBI ESOP Regulations voting rights on the shares of theCompany held by HT Media Employee Welfare Trust were not exercised during the year underreview.

SUBSIDIARY COMPANIES

During the year under review in terms of the Order of Hon'ble NCLT New Delhi Benchthe issued subscribed and paid-up capital of India Education Services Private Limited(IESPL) (subsidiary company) was reduced to 20 Lac fully paid-up equity shares of facevalue of H10/- each aggregating to H2 Crore by cancellation of 11.64 Crore fully paid-upequity shares of face value of H10/- each.

HT Digital Information Private Limited (wholly-owned subsidiary company) (HT Digital)could not commence any business activity since its incorporation. In view of the same anapplication was made to Registrar of Companies N.C.T of Delhi & Haryana (RoC) forstriking off the name of HT Digital from its register of companies. Accordingly RoCstruck off the name of HT Digital from its register of companies and HT Digital standsdissolved w.e.f. August 9 2018.

During the year under review HT Global Education (wholly-owned subsidiary company)surrendered the license to carry out non-profit activities under Section 8 of theCompanies Act 2013 and thus its name was changed to "HT Global Education PrivateLimited" w.e.f January 22 2019.

The Scheme of Arrangement under Sections 230 to 232 and other applicable provisions ofthe Companies Act 2013 between two subsidiary companies viz. India EducationServices Private Limited (IESPL) and Hindustan Media Ventures Limited (HMVL) and theirrespective shareholders for demerger of Business-to-Consumer business (B2C) of IESPL andtransfer and vesting thereof to HMVL on a ‘going concern’ basis has receivedrequisite approvals and is pending for sanction by New Delhi and Kolkata bench of Hon'bleNCLT.

The Board of Directors of HT Music and Entertainment Company Limited (wholly-ownedsubsidiary company) (HT Music) at its meeting held on April 4 2019 approved the draftapplication for reduction of share capital of HT Music from RS. 334 Crore to H34 Crore.Upon approval by the shareholders of HT Music an application for reduction of capital hasbeen filed before the Hon’ble National Company Law Tribunal Mumbai Bench.

In terms of the applicable provisions of Section 136 of the Companies Act 2013 theFinancial Statements of subsidiary companies for the financial year ended on MarcRs. 312019 are available for inspection by the Members of the Company at the registered officeof the Company during business hours. The same are also available on the Companies websiteviz. www.htmedia.in.

A report on the performance and financial position of each of the subsidiary companiesin the prescribed Form AOC-1 is annexed to the Consolidated Financial Statements andhence not reproduced here. The ‘Policy for determining MaterialSubsidiary(ies)’ is available on the Company’s website viz.www.htmedia.in.

The contribution of the subsidiary companies to the overall performance of your Companyis outlined in Note No.53 of the Consolidated Financial Statements for the financial yearended MarcRs. 31 2019.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

During the year under review on recommendation of the Nomination & RemunerationCommittee the Board of Directors accorded its approval to the appointment of Shri PraveenSomeshwar (DIN: 01802656) as Managing Director & Chief Executive Officer for a periodof 5 (five) years w.e.f. August 1 2018 which was approved by the Members at the AnnualGeneral Meeting (AGM) held on September 25 2018. Shri Dinesh Mittal resigned asWhole-time Director w.e.f. August 8 2018. However continues to hold the office of GroupGeneral Counsel & Company Secretary (KMP) of the Company.

Shri K.N. Memani (DIN: 00020696) ceased to be Director of the Company upon completionof his term on MarcRs. 31 2019. On his request the Board did not consider hisre-appointment for second term.

Further on the recommendation of Nomination & Remuneration Committee the Board ofDirectors accorded its approval to the following:

(a) Re-appointment of Shri Ajay Relan (DIN: 00002632) as Non-executive IndependentDirector w.e.f. April 1 2019 for a second term of 5 consecutive years upto MarcRs. 312024 which was approved by the Members by way of Postal Ballot for which results weredeclared on MarcRs. 28 2019.

(b) Appointment of Smt. Sindhushree Khullar (DIN: 01493839) as Additional Director tohold office till the date of ensuing AGM and as Non-executive (Woman) Independent Directorw.e.f. May 10 2019 for a term of 5 consecutive years upto MarcRs. 31 2024 subject toapproval of Members.

The Board commends the appointment of Smt. Sindhushree Khullar as Non-executive (Woman)Independent Director for approval of Members at the ensuing AGM.

In accordance with the provisions of the Companies Act 2013 Shri Priyavrat Bhartiaretires by rotation at the ensuing AGM and being eligible has offered himself forre-appointment. Your Directors commend re-appointment of Shri Priyavrat Bhartia forapproval of the Members at the ensuing AGM.

All the Independent Directors of the Company have confirmed that they meet the criteriaof independence as prescribed under both the Companies Act 2013 and SEBI ListingRegulations. The Independent Directors have also confirmed that they have complied withthe ‘Code of Conduct’ of the Company.

Brief resume nature of expertise details of directorship held in other companies ofthe Directors proposed to be appointed / re-appointed at the ensuing AGM alongwith their shareholding in the Company as stipulated under Secretarial Standard-2 andRegulation 36 of the SEBI Listing Regulations is provided in the Notice of the ensuingAGM.

Key Managerial Personnel

Shri Rajiv Verma stepped down as Chief Executive Officer of the Company w.e.f. June 302018. (closing business hours). The Board places on record its sincere appreciation forthe dedicated efforts put in by him during his tenure.

Further on the recommendation of Nomination and Remuneration Committee the Board ofDirectors designated Shri Praveen Someshwar as Key Managerial Personnel w.e.f. August 12018.

PERFORMANCE EVALUATION

In line with the requirements under the Companies Act 2013 and the SEBI ListingRegulations the Board undertook a formal annual evaluation of its own performance andthat of its Committees & Directors.

The Nomination and Remuneration Committee framed questionnaires for evaluation ofperformance of the Board as a whole Board Committees (viz. Audit Committee StakeholdersRelationship Committee Corporate Social Responsibility Committee and Nomination andRemuneration Committee); Directors and the Chairperson on various criteria outlined inthe ‘Guidance Note on Board Evaluation’ issued by SEBI on January 5 2017.

The Directors were evaluated on various parameters such as value addition todiscussions level of preparedness willingness to appreciate the views of fellowdirectors commitment to processes which include risk management compliance and controlcommitment to all stakeholders (shareholders employees vendors customers etc.)familiarization with relevant aspects of company’s business / activities amongstother matters. Similarly the Board as a whole was evaluated on parameters which includedits composition strategic direction focus on governance risk management and financialcontrols.

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

Statutory Auditor

Price Waterhouse & Co Chartered Accountants LLP (PwC) [Firm Registration No.304026E/E-300009] were appointed as Statutory Auditor of the Company for a term of 5consecutive years at the Annual General Meeting held on September 25 2017.

The Auditors' Report of PwC on Annual Financial Statements (Standalone andConsolidated) for the financial year ended on MarcRs. 31 2019 is an unmodifiedopinion i.e. it does not contain any qualification reservation or adverse remark.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors had appointed Shri N.C. Khanna CompanySecretary-in-Practice (C.P. No. 5143) as Secretarial Auditor to conduct the SecretarialAudit for the financial year ended MarcRs. 31 2019 and the same is annexed herewith as"Annexure - B". The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

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 Companies Act 2013 and rules made thereunder therefore no detail is required to bedisclosed under Section 134(3)(ca) of the Companies Act 2013.

Cost Auditor

In terms of the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 and on the recommendation of the AuditCommittee the Board of Directors had appointed K.G. Goyal & Associates CostAccountants (Firm Registration No. 000024) as Cost Auditor to carry out cost audit ofrecords maintained by the Company for its FM Radio business in relation to the financialyear ended MarcRs. 31 2019.

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 theAudit Committee for review and/or approval. During the year the Company did not enterinto any contract /arrangement / transaction with related party which could be consideredmaterial in accordance with the Company’s ‘Policy on Materiality of and dealingwith Related Party Transactions’ and accordingly the disclosure of related partytransactions in Form AOC-2 is not applicable. The aforesaid Policy is available on theCompany’s website viz. www.htmedia.in.

Reference of the Members is invited to Note nos. 36 and 36A of the Standalone FinancialStatements which sets out the related party disclosures as per Ind AS-24.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

As a responsible corporate citizen your Company is committed to undertake sociallyuseful programmes for welfare and sustainable development of the community at large. TheCorporate Social Responsibility (CSR) Committee of Directors is in place in terms ofSection 135 of the Companies Act 2013 the composition of which is provided in the AnnualReport on Corporate Governance which forms part of this Annual Report. The CSR Committeehas formulated and recommended to the Board a CSR Policy outlining CSRprojects/activities to be undertaken by the Company during the year under review. The CSRPolicy is available on the Company’s website viz. www.htmedia.in.

The Annual Report on CSR for FY 19 is annexed herewith as "Annexure - C".

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act 2013 your Directors state that:

i. in the preparation of the annual accounts for the financial year ended on MarcRs.31 2019 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 andfair view of the state of affairs of the Company as on MarcRs. 31 2019; and of the lossof the Company for the year ended on MarcRs. 31 2019;

iii. proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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; and

vi. systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

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.

Particulars of loans given investments made guarantees /securities given: Thedetails of investments made and loans/ guarantees/securities given as applicableare given in the note no. 49 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 on MarcRs. 31 2019 the Boardmet eight times on May 2 2018 May 24 2018 June 6 2018 July 18 2018 August8 2018 October 27 2018 December 20 2018 and January 16 2019. For further details ofthese meetings Members may please refer Report on Corporate Governance which forms partof this Annual Report.

Committees of the Board: At present seven standing committees of the Board ofDirectors are in place viz. Audit Committee Nomination & Remuneration Committee CSRCommittee Banking & Finance Committee Investment Committee Stakeholders'Relationship Committee and Risk Management Committee. During the year under reviewrecommendations of the aforesaid committees were accepted by the Board.

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 Companies Act 2013 and the SEBI Listing Regulationsis available on the Company’s website viz. www.htmedia.in. The RemunerationPolicy includes inter-alia the criteria for appointment of Directors KMPsSenior Management Personnel and other employees their remuneration structure anddisclosures in relation thereto. In view of amendment in SEBI Listing Regulations(effective from April 1 2019) the role of Nomination and Remuneration Committee (NRC)shall include recommendation to the Board all remuneration in whatever form payable toSenior Management. Accordingly upon recommendation of NRC the Board of Directors haveapproved revision of Remuneration Policy to incorporate the aforesaid amendment.

Vigil Mechanism: The Vigil Mechanism as envisaged in the Companies Act 2013 &rules made thereunder and the SEBI Listing Regulations is addressed in the Company’s"Whistle Blower Policy". In terms of the Policydirectors/employees/stakeholders of the Company may report concerns about unethicalbehaviour actual or suspected fraud or any violation of the Company’s Code ofConduct. The Policy provides for adequate safeguards against victimization of the WhistleBlower. The Policy is available on the Company’s website viz. www.htmedia.in.

Particulars of employees and related disclosures: In accordance with the provisionsof Section 197(12) of the Companies Act 2013 read with Rule 5(2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 details ofemployees remuneration are set out in the "Annexure - D" to this Report.In terms of the provisions of the first proviso to Section 136(1) of the Companies Act2013 the Board’s Report is being sent to the Members without this annexure. Howeverthe same is available for inspection by the Members at the Registered Office of theCompany during business hours for a period of 21 days before the ensuing AGM. Membersinterested in obtaining a copy of the said Annexure may write to the Company Secretary atthe Registered Office of the Company.

Disclosures under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as "Annexure - E".

Extract of Annual Return: Extract of the Annual Return for the financial year endedon MarcRs. 31 2019 in Form MGT-9 is annexed herewith as "Annexure - F "and the same is also placed on the website of the Company viz. www.htmedia.in

Corporate Governance: The report on Corporate Governance in terms of the SEBIListing Regulations forms part of this Annual Report. The certificate issued by CompanySecretary-in-Practice is annexed herewith as "Annexure – G ".

Conservation of energy technology absorption and foreign exchange earnings &outgo: The information on conservation of energy technology absorption and foreignexchange earnings & outgo is annexed herewith as "Annexure – H".

SECRETARIAL STANDARDS

Your Directors state that the Secretarial Standards (i.e. SS-1 and SS-2) relating to'Meetings of the Board of Directors' and 'General Meetings' have been duly followed bythe Company.

GENERAL

Your Directors state that during the year under review no disclosure is required inrespect of the following matters as there were no transactions/events in relationthereto:

1. Details relating to deposits covered under Chapter V of the Companies Act 2013.

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 of the Company. There was no change in the share capital of the Company duringthe year under review.

The Company has not transferred any amount to the General Reserve during the year underreview.

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the ‘going concern’ status and Company’s operations in future.

Your Company has in place adequate internal financial controls with reference to thefinancial statements. The internal control system is supplemented by an extensive programof internal audits and their reviews by the management. The in-house internal auditfunction supported by professional external audit firms conducts comprehensive riskfocused audits and evaluate the effectiveness of the internal control structure acrosslocations and functions on a regular basis. In addition to internal audit activitiesCompany has also developed an internal financial control framework to periodically reviewthe effectiveness of controls laid down across all critical processes. The Company hasinstituted an online compliance management tool with a centralized repository to cater toits statutory compliance requirements.

Your Company adheres to a strict policy to ensure the 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 complaints received regarding sexual harassment. TheCompany’s policy in this regard is available on the employee intranet portal. TheCompany conducts regular classroom training sessions for employees and members of InternalCommittee and has also rolled-out an online module for employees to increase awareness.Five complaints were reported during the year under review and were adequately dealt withby IC.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the co-operation extendedby all stakeholders including Ministry of Information & Broadcasting and othergovernment authorities shareholders investors readers advertisers browserslisteners customers banks vendors and suppliers. Your Directors also place on recordtheir deep appreciation of the committed services of the executives and employees of theCompany.

For and on behalf of the Board
(Shobhana Bhartia)
Date: May 10 2019 Chairperson & Editorial Director
Place: New Delhi DIN: 00020648