Your Directors are pleased to present their Report together with the Audited FinancialStatements (Standalone and Consolidated) for the financial year ended on March 31 2019.
Your Company's performance during the financial year ended on March 31 2019 alongwith previous year's figures is summarized below:
(` in Lacs)
| || |
|Particulars ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Total Revenue ||228.66 ||188.32 ||7102.26 ||7776.65 |
|Earnings before interest tax depreciation and amortization (EBITDA) from continuing operations ||(49.43) ||(15.52) ||488.03 ||1355.18 |
|Add: Exceptional items ||0.41 ||- ||34.09 ||- |
|Less: Depreciation ||0.51 ||1.43 ||1054.85 ||1101.68 |
|Less: Finance Cost ||143.53 ||112.38 ||896.88 ||1019.32 |
|Profit/(Loss) before tax from continuing operations ||(193.06) ||(129.33) ||(1429.61) ||(765.82) |
|Less: Tax Expense || || || || |
|Current Tax ||- ||- ||- ||- |
|Adjustment of current tax related to earlier period ||- ||1.84 ||- ||1.84 |
|Deferred tax charges / (credit) ||- ||- ||- ||- |
|Total tax expense ||- ||1.84 ||- ||1.84 |
|Profit for the year ||(193.06) ||(131.17) ||(1429.61) ||(767.66) |
|Add: Other Comprehensive Income (net of Tax) ||3.02 ||2.85 ||0.64 ||17.80 |
|Total Comprehensive Income for the year (net of tax) ||(190.04) ||(128.32) ||(1428.97) ||(749.86) |
|Opening balance in Retained Earnings ||(12358.87) ||(12230.55) ||(12968.77) ||(12482.29) |
|Add: Profit/ (Loss) for the year ||(193.06) ||(131.17) ||(840.99) ||(497.01) |
|Less: Items of other Comprehensive Income recognized directly in Retained Earnings ||- ||- ||- ||- |
|Re-measurements of post-employment benefit obligation (net of tax) ||3.02 ||2.85 ||0.33 ||(10.53) |
|Less: Dividend Paid ||- ||- ||- ||- |
|Less: Tax on Dividend ||- ||- ||- ||- |
|Add: Adjustment of any accumulated surplus ||- ||- ||(83.09) ||- |
|Total Retained Earnings ||(12548.91) ||(12358.87) ||(13892.52) ||(12968.77) |
In view of the loss incurred by the Company during the year under review yourDirectors do not recommend any dividend for the financial year ended March 31 2019.
COMPANY PERFORMANCE AND FUTURE OUTLOOK
Your Company is the holding Company of Next Radio Limited ("NRL"). NRL isengaged in the business of FM radio broadcasting. It was among the first private playersto venture into private FM broadcasting and has established "Radio One" in top 7cities of the country viz. (i) Delhi (ii) Mumbai (iii) Chennai (iv) Kolkata (v)Bangalore (vi) Pune and (vii) Ahmedabad. NRL operates under frequency 94.3 MHz in allthe cities except for Ahmedabad where it operates under the frequency 95 MHz.
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 this Annual Report.
SCHEME OF ARRANGEMENT
During the year under review the Board of Directors at its meeting held on August 82018 accorded approval to a draft Scheme of Arrangement and Amalgamation amongst HT MediaLimited Next Radio Limited HT Music and Entertainment Company Limited and NextMediaworks Limited ("Scheme"). Thereafter the Company filed the said Schemewith National Stock Exchange of India Ltd ("NSE") and BSE Limited("BSE") on August 20 2018 for their approval. Thereafter keeping in view theinterest of all stakeholders and after considering all the relevant factors the Boardafter due deliberations decided to withdraw from the Scheme.
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 for the Company including identification of various elements of riskis appearing in the Management Discussion and Analysis.
The Company's equity shares are compulsorily tradable in electronic form. As ofMarch 31 2019 99.99% of the Company's total paid-up capital representing 66891019equity shares 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 to availdemat facility.
As on March 31 2019 the Company had following subsidiary companies:
(a) Next Radio Limited;
(b) Syngience Broadcast Ahmedabad Limited (Wholly owned subsidiary of Next RadioLimited)
During the year under review the investments made by the Company in One Audio Limited(49994 shares) Next Outdoor Limited (3494200 shares) and Digital One Private Limited(9999 shares) were transferred to Inquilab Offset Printers Limited. In terms of theapplicable provisions of Section 136 of the Companies Act 2013 the Financial Statementsof subsidiary companies for the financial year ended on March 31 2019 are available forinspection by the Members of the Company at the registered office of the Company duringbusiness hours. The same are also available on the Company's website viz. www.nextmediaworks.com.
A report on the performance and financial position of each of the subsidiary company inthe prescribed Form AOC-1 is annexed to the Consolidated Financial Statements and hencenot reproduced here. The Policy for determining Material Subsidiary(ies)' isavailable on the Company's website viz. www.nextmediaworks.com.
The contribution of the subsidiary companies to the overall performance of your Companyis outlined in Note No. 48A of the Consolidated Financial Statements for the financialyear ended March 31 2019.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
During the year under review on the recommendation of Nomination & RemunerationCommittee the Board of Directors accorded its approval to the following:
a) Appointment of Shri Chetan Desai (DIN: 03595319) as Non-Executive andNon-Independent Director w.e.f. May 08 2018.
b) Appointment of Shri Ajay Relan (DIN: 00002632) as Non-Executive and IndependentDirector w.e.f. April 18 2019 for a period of five consecutive years for a term uptoMarch 31 2024 subject to the approval of members.
c) Appointment of Ms. Suchitra Rajendra (DIN: 07962214) as Non-Executive andIndependent Director w.e.f. April 18 2019 for a period of five consecutive yearsfor a term upto March 31 2024 subject to the approval of members.
d) Appointment of Shri Praveen Someshwar (DIN: 01802656) as Additional Director(Non-Executive and Non-Independent) w.e.f. April 18 2019 to hold office upto thedate of ensuing AGM of the Company.
e) Appointment of Shri Dinesh Mittal (DIN: 00105769) as Additional Director(Non-Executive and Non-Independent) w.e.f. April 18 2019 to hold office upto the date ofensuing AGM of the Company.
f) Appointment of Shri Harshad Jain (DIN: 08191390) as Additional Director w.e.f.April 18 2019 and Chief Executive Officer (Designated as Managing Director under theCompanies Act 2013) (KMP) w.e.f. April 22 2019 for a period of three years subject toapproval of the members at their ensuing AGM of the Company.
Further following Directors of the Company have tendered resignation from the Boardof Directors of the Company w.e.f. April 18 2019 (close of business hours):
a) Shri Tarique Ansari (DIN: 00101820)
b) Shri Chetan Desai (DIN: 03595319)
c) Shri Adille Sumariwalla (DIN: 00045855)
d) Shri I. Venkat (DIN: 00089679)
e) Shri Sunil Dalal (DIN: 00021019)
f) Shri Rajbir Singh Bhandal (DIN: 01962971)
g) Ms. Monisha Shah (DIN: 00542228)
the Board places on record its deep appreciation for valuable contribution madeby aforesaid directors during their respective tenures on the Board of Directors of theCompany.
the Board commends for approval of Members at the ensuing AGM the appointment/re-appointment of:
(1) Shri Ajay Relan as Non-executive Independent Director;
(2) Ms. Suchitra Rajendra as Non-executive Independent Director;
(3) Shri Praveen Someshwar as Non-Executive Director;
(4) Shri Dinesh Mittal as Non-Executive Director; and
(5) Shri Harshad Jain as Chief Executive Officer (Designated as Managing Director underthe Companies Act 2013). In view of change in composition of Board of Directorsconsequent upon appointment of new directors and resignation of then directors (except Mr.Dilip Cherian) on April 18 2019 there is no director liable to retire by rotation atthe ensuing AGM in terms of Section 152 of the Companies Act 2013.
All the Independent Directors of the Company have confirmed that they meet criteria ofindependence as prescribed under both the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations"). The Independent Directors have also confirmed that they have compliedwith the Code of Conduct' of the Company.
Brief resume nature of expertise details of directorship held in other companies ofthe Directors proposed to be appointed at the ensuing AGM along with their shareholdingin the Company as required under Secretarial Standard-2 and Regulation 36 of the SEBIListing Regulations is provided in the Notice of the ensuing AGM.
Key Managerial Personnel (KMP)
Shri Tarique Ansari Chairman and Managing Director and Shri Ismail Dabhoya ChiefFinancial Officer stepped down from their respective positions in the Company w.e.f.April 18 2019 (close of business hours). The Board places on record sincere appreciationfor the dedicated efforts put in by them during their respective tenures.
Further on the recommendation of Nomination and Remuneration Committee the Board ofDirectors have appointed Shri Harshad Jain Chief Executive Officer (Designated asManaging Director under the Companies Act 2013) and Shri Abhishek Kapoor as ChiefFinancial Officer (KMP u/s 203 of the Companies Act 2013) w.e.f. April 18 2019.
Details regarding process followed for performance evaluation of the Board itsCommittees individual Directors and the Chairperson for the financial year ended March31 2019 are provided in Report on Corporate Governance.'
In compliance of applicable provisions of the Companies Act 2013 with respect tomandatory rotation of Statutory Auditors the Members of the Company at their 37thAGM held on September 20 2018 have appointed M/s Walker Chandiok & Co. LLPChartered Accountants (WCC') as Statutory Auditors of the Company to hold officefor a term of 5 (five) consecutive years.
The Auditors' Report of WCC on Annual Financial Statements (Standalone andConsolidated) for the financial year ended on March 31 2019 is an unmodified report i.e.it does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors had appointed M/s. GHV & Co. Practicing CompanySecretaries as Secretarial Auditor to conduct the Secretarial Audit for the financialyear 2018-19. The Secretarial Audit Report is annexed herewith as "Annexure -A".
The Secretarial Audit Report contains an observation. In relation to the saidobservation of Secretarial Auditor in the Secretarial Audit Report your Directors have tostate that necessary steps are being taken to file the requisite forms with the Registrarof Companies.
During the year under review the Statutory Auditors 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.
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 approval. During the year the Company did not enter into anycontract / arrangement /transaction with related party which could be considered materialin accordance with the Company's Policy on Materiality of and dealing with RelatedParty Transactions' and accordingly the disclosure of related party transactions in FormAOC-2 is not applicable. The aforesaid Policy is available on the Company's website viz.www.nextmediaworks.com. Reference of the Members is invited to Note no. 33A of theStandalone Annual Financial Statements which sets out the related party disclosures asper Ind AS-24.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 your Directors state that: i. inthe preparation of the annual accounts for the financial year ended on March 31 2019 theapplicable Accounting Standards have been followed and there are no material departures;ii. such accounting policies have been selected and applied consistently and judgments andestimates 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 2019; and of the lossof the Company for the year ended on March 31 2019; iii. proper and sufficient care hasbeen taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; iv. the annual accounts have beenprepared on a going concern' basis; v. proper internal financial controls were inplace and that such internal financial controls 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
Borrowing 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: The detailsof investments made and loans/ guarantees/securities given as applicable are given inthe notes to the Annual Standalone Financial Statements.
Board Meetings: During the financial year ended on March 31 2019 the Board metsix times on May 8 2018 July 18 2018 August 08 2018 November 01 2018December 20 2018 and February 04 2019. For further details of these meetings Membersmay please refer Report on Corporate Governance' which forms part of this AnnualReport.
Committees of the Board: At present four standing committees of the Board ofDirectors are in place viz. Audit Committee Nomination & Remuneration CommitteeBanking & Finance Committee and Stakeholders' Relationship Committee. During the yearunder review recommendations of the Committees were accepted by the Board. Members maykindly note that Risk Managment Committee has been dissolved by the Board of Directors atits meeting held on April 18 2019. For further details of the committees of the BoardMembers may please refer Report on Corporate Governance' which forms part of thisAnnual Report.
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 SEBI Listing Regulations is availableon the Company's website viz. www.nextmediaworks.com. The Remuneration Policy includesinter-alia the criteria for appointment of Directors KMPs and senior managementpersonnel their remuneration structure and disclosures in relation thereto.
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"Vigil Mechanism / Whistle Blower Policy". In terms of the Policy directors/employees/ stakeholders of the Company may report concerns about unethical behaviouractual or suspected fraud or any violation of the Company's Code of Conduct. The Policyprovides for adequate safeguards against victimization of the Whistle Blower. The Policyis available on the Company's website viz. www.nextmediaworks.com.
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 2014details of employees remuneration are set out in the "Annexure - B" tothis Report. In terms of the provisions of the first proviso to Section 136(1) of theCompanies Act 2013 the Board's Report is being sent to the Members without thisannexure. However the same is available for inspection by the Members at the RegisteredOffice of the Company during business hours for a period of 21 days before the ensuingAGM. Members interested in obtaining a copy of the said Annexure may write to the CompanySecretary at the Registered Office of the Company. Disclosure under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as "Annexure - C"Extract of Annual Return: An Extract of the Annual Return for the financial year endedon March 31 2019 in Form MGT-9 is annexed herewith as "Annexure - D".The same is also available on the Company's website viz. www.nextmediaworks.com.
Corporate Governance: The report on Corporate Governance in terms of SEBI ListingRegulations forms part of this Annual Report. The certificate issued by Company Secretaryin Practice confirming the compliance of conditions of corporate governance is annexedherewith as "Annexure - E".
Conservation of energy technology absorption and foreign exchange earnings &outgo: Nil
Prevention of sexual harrasment mechanism: During the year under review theCompany has not received any complaint from the employees related to sexual harassment.The Company has in place policy on prevention of sexual harassment which is available onthe Company's website viz. www.nextmediaworks.com.
Further your Company has complied with provisions relating to constitution of InternalComplaints Committee under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Employee Stock Option Plan: The information required to be disclosed pursuant tothe provisions of the SEBI (Share Based Employee Benefits) Regulations 2014 read withSEBI's circular no. CIR/CFD/POLICYCELL/2/2015 dated June 16 2015 (SEBI ESOPRegulations') is available on the Company's website viz. www.nextmediaworks.com. Furtherduring the year under review voting rights on the shares of the Company held by ESOPTrust were not exercised in compliance with SEBI ESOP Regulations.
Your Directors state that applicable provisions of Secretarial Standards i.e. SS-1 andSS-2 relating to Meetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
Your Directors state that no disclosure is required in respect of the following mattersas there were no transactions/events in relation thereto during the year under review:
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 during the year under review.
The Company has not transferred any amount to the General Reserve during the year underreview.
The provisions of Section 148 of the Companies Act 2013 are not applicable on theCompany. Hence there is no requirement to maintain cost records as specified by theCentral Government under the aforesaid section.
HT Media Limited (HTML) had made an open offer under SEBI (Substantial Acquisition ofShares and Takeovers) Regulations 2011 to the public shareholders of the Company toacquire 17392157 shares comprising of 26% of the Total Share Capital of the Company).However only 9486823 shares comprising of 14.18% of the Total Share Capital of theCompany were tendered by the public shareholders. Thereafter HTML acquired 24628563Equity Shares (36.82% of Voting Share Capital) from the existing promoters of the Companythereby holding 51% of Total Share Capital in the Company. The obligations of HTML ofmaking payment to the public shareholders of Company got completed on April 152019. Save and except to the above no material changes/ commitments have occurred afterthe end of the financial year 2019 and till the date of this report. No significant ormaterial orders were passed by the Regulators or Courts or Tribunals which impact thegoing 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 with an extensiveprogram of internal audits and their reviews by the management. The in-house internalaudit function supported by professional external audit firms conduct comprehensive riskfocused audits across locations and functions to maintain a proper system of control. TheAudit Committee of the Board oversees the adequacy and effectiveness of the internalcontrol environment through regular reviews of the audit findings.
Your Directors place on record their sincere appreciation for the co-operation extendedby all stakeholders including government authorities shareholders investors banksetc. Your Directors also place on record their deep appreciation of the committed servicesof the executives and employees of the Company.
| || ||For and on behalf of the Board |
| ||(Praveen Someshwar) ||(Harshad Jain) |
|Date: May 27 2019 ||Director ||Chief Executive Officer |
|Place: New Delhi ||DIN: 01802656 ||DIN: 08191390 |