Your Directors are pleased to present their report together with the Audited FinancialStatements (Standalone & Consolidated) for the financial year ended on March 31 2020.
Your Company's performance during the financial year ended on March 31 2020 alongwith previous year's figures is summarized below:
(Rs. in Lac)
| ||Standalone ||Consolidated |
|Particulars || || || || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Total Revenue ||226.43 ||228.66 ||6116.78 ||7102.26 |
|Earnings before interest tax depreciation and amortization (EBITDA) from continuing operations ||59.70 ||(49.43) ||379.62 ||488.03 |
|Add: Exceptional items ||(800.00) ||0.41 ||(2000.00) ||34.09 |
|Less: Depreciation ||- ||0.51 ||1261.35 ||1054.85 |
|Less: Finance Cost ||173.20 ||143.53 ||1075.32 ||896.88 |
|Profit/(Loss) before tax from continuing operations ||(913.50) ||(193.06) ||(3957.05) ||(1429.61) |
|Less: Tax Expense || || || || |
| Current Tax ||- ||- ||1.50 ||- |
| Adjustment of current tax related to earlier period ||- ||- ||2.56 ||- |
| Deferred tax charges / (credit) ||- ||- ||- ||- |
|Total tax expense ||- ||- ||4.06 ||- |
|Profit/ (Loss) for the year ||(913.50) ||(193.06) ||(3961.11) ||(1429.61) |
|Add: Other Comprehensive Income (net of tax) ||1.63 ||3.02 ||(22.95) ||0.64 |
|Total Comprehensive Income for the year (net of tax) ||(911.87) ||(190.04) ||(3984.07) ||(1428.97) |
|Opening balance in Retained Earnings ||(12548.89) ||(12358.85) ||(13892.52) ||(12968.77) |
|Add: Profit/ (Loss) for the year ||(913.48) ||(193.06) ||(2110.38) ||(840.99) |
|Less: Items of other Comprehensive Income recognized directly in Retained Earnings || || || || |
| Re-measurements of post-employment benefit obligation (net of tax) ||1.63 ||3.02 ||(11.01) ||0.33 |
|Add: Adjustment of any accumulated surplus ||- ||- ||- ||(83.09) |
|Total Retained Earnings ||(13460.76) ||(12548.89) ||(16013.91) ||(13892.52) |
Due to inadequacy of profits no dividend is recommended by the Board of Directors forthe financial year ended on March 31 2020.
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. Delhi Mumbai Chennai Kolkata Bengaluru Pune andAhmedabad. NRL operates under frequency 94.3 MHz in all the cities except Ahmedabad whereit operates under the frequency 95 MHz. A detailed analysis and insight into the financialperformance and operations of your Company and NRL for the year under review and futureoutlook is appearing in Management Discussion and Analysis which forms part of thisAnnual Report.
Your Company has a robust risk management framework to identify evaluate and mitigatebusiness risks. The key enterprise risks along with mitigation measures undertaken by theManagement are also reviewed periodically by the Audit Committee. A detailed statementindicating development and implementation of a risk management policy for the Companyincluding identification of various elements of risk is appearing in the ManagementDiscussion and Analysis.
As on March 31 2020 the Company had following subsidiary companies:
(a) Ne xt Radio Limited; and
(b) Syngience Broadcast Ahmedabad Limited (wholly owned subsidiary of Next RadioLimited)
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 March 312020 are available for inspection at Company's website viz. www.nextmediaworks.com.
A report on the performance and financial position of both the subsidiary companies inprescribed Form AOC-1 is annexed to the Consolidated Financial Statements and hence notreproduced here. The Policy for determining Material Subsidiary(ies)' is availableon the Company's website viz. www.nextmediaworks.com.
The contribution of subsidiary companies to the overall performance of your Company isoutlined in Note No. 36C of the Consolidated Financial Statements for the financial yearended March 31 2020.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
On the recommendation of Nomination & Remuneration Committee the Board ofDirectors accorded its approval to the following after considering integrity expertiseand experience of the Directors:
a) Appointment of Mr. Ajay Relan (DIN: 00002632) and Ms. Suchitra Rajendra (DIN:07962214) as Non-executive Independent Directors w.e.f. April 18 2019 for a period offive consecutive years for a term upto March 31 2024 which was approved by the Membersat the Annual General Meeting (AGM') held on September 12 2019;
b) Appointment of Mr. Praveen Someshwar (DIN: 01802656) and Mr. Dinesh Mittal (DIN:00105769) as Non-executive Non-Independent Directors w.e.f. April 18 2019 which wasapproved by the Members at the AGM held on September 12 2019;
c) Appointment of Mr. Harshad Jain (DIN: 08191390) as Additional Director w.e.f. April18 2019 and Chief Executive Officer (designated as Managing Director under the CompaniesAct 2013) (KMP) w.e.f. April 22 2019 for a period of three years which was approved bythe Members at the AGM held on September 12 2019; and
d) Appointment of Mr. Sameer Singh (DIN: 08138465) as Non-executive IndependentDirector w.e.f. January 13 2020 for a period of five consecutive years for a term uptoMarch 31 2024 subject to the approval of members.
Further following Directors tendered their esignation r from the Board of Directorsw.e.f. April 18 2019
i) Mr. Tarique Ansari (DIN: 00101820);
ii) Mr. Chetan Desai (DIN: 03595319);
iii) Mr. Adille Sumariwalla (DIN: 00045855);
iv) Mr. I. Venkat (DIN: 00089679);
v) Mr. Sunil Dalal (DIN: 00021019);
vi) Mr. Rajbir Singh Bhandal (DIN: 01962971); and
vii) Ms. Monisha Shah (DIN: 00542228)
Mr. Dilip Cherian (DIN: 00322763) ceased to be Director of Company upon completion ofhis term on January 22 2020. On his request the Board did not consider hisre-appointment for second term.
The Board places on record its sincere appreciation for valuable contribution made byabove-named Directors during their respective tenure on the Board of Directors of theCompany.
The Board commends the appointment of Mr. Sameer Singh as Non-executive IndependentDirector for approval of Members at the ensuing AGM.
In accordance with the provisions of the Companies Act 2013 Mr. Praveen Someshwar(DIN: 01802656) retires by rotation at ensuing AGM and being eligible offers himself forre-appointment. The Board commends re-appointment of Mr. Praveen Someshwar for approvalof the Members at the ensuing AGM.
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") along with declaration of compliance with Rules 6(1) and 6(2) of theCompanies (Appointment and Qualification of Directors) Rules 2014 with respect to theirregistration on the databank of Independent Directors maintained by Indian Institute ofCorporate Affairs. 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/re-appointed at the ensuing AGM along with theirshareholding in the Company as stipulated under Secretarial Standard-2 and Regulation 36of the SEBI Listing Regulations is provided in the Notice of the ensuing AGM.
Key Managerial Personnel (KMP)
During the year under review following KMPs stepped down from their respective office:
a) Mr. Tarique Ansari as Chairman and Managing Director w.e.f. April 18 2019;
b) Mr. Ismail Dabhoya as Chief Financial Officer w.e.f. April 18 2019; and
c) Mr. Gaurav Sharma as Company Secretary and Compliance Officer w.e.f. March 15 2020.
The Board places on record its sincere appreciation for the dedicated efforts put in bythem during their tenure.
On the recommendation of the Nomination & Remuneration Committee the Board ofDirectors accorded its approval to the appointment of;
a) Mr. Harshad Jain as Chief Executive Officer (designated as Managing Director underthe Companies Act 2013) (KMP u/s 203 of the Companies Act 2013) w.e.f. April 222019;
b) Mr. Abhishek Kapoor as Chief Financial Officer w.e.f. April 22 2019; and
c) Ms. Diksha Singh as Company Secretary & Compliance Officer w.e.f. March 162020.
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 and Directors.
The Nomination & Remuneration Committee framed questionnaires for evaluation ofperformance of the Board as a whole Board Committees (viz. Audit Committee Stakeholders'Relationship Committee and Nomination & Remuneration Committee); Directors and theChairperson on various criteria outlined in the 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 amongst othermatters. Similarly the Board as a whole was evaluated on parameters which included itscomposition 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.
M/s. Walker Chandiok & Co. LLP Chartered Accountants ( WCC') tenderedresignation as Statutory Auditor of the Company vide their letter dated July 5 2019.
To fill the casual vacancy caused by resignation of WCC on the recommendation of AuditCommittee the Board of Directors on July 11 2019 appointed B S R and AssociatesChartered Accountants [Firm Registration No. 128901W] ("BSR") as StatutoryAuditor of the Company to hold office as such upto the conclusion of AGM held onSeptember 12 2019. In accordance with the provisions of Section 139 and other applicableprovisions of the Companies Act 2013 the members of the Company at their AGM held onSeptember 12 2019 appointed BSR as Statutory Auditor of the Company to hold office fromthe conclusion of the said AGM till the conclusion of AGM to be held in the calendar year2024.
The Auditors' Report on Annual Financial Statements (Standalone & Consolidated) forthe financial year ended on March 31 2020 is an unmodified report i.e. it does notcontain 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 ended on March 31 2020. The Secretarial Audit Report is annexed herewith as "Annexure- A". Your Directors have to state the following in relation to the observationsin the Secretarial Audit Report -
(i) In view of the new requirement to provide details of Significant Beneficial Ownerin the quarterly shareholding pattern filed with stock exchanges there was a delay ofseven days in submission of the shareholding pattern for the quarter ended on June 302019. The slight delay in filing was attributable to certain internal constraints. TheCompany has promptly paid the penalty levied by NSE and BSE in this regard.
(ii) Chairperson of Audit Committee could not attend the Annual General Meeting of theCompany held on September 12 2019 due to certain limitations at his end to travel toMumbai.
The Secretarial Audit of material unlisted subsidiary viz. Next Radio Limitedas required under Regulation 24A of SEBI Listing Regulations was conducted for FY-20 andthere is no qualification reservation or adverse remark in the said report.
During the year under review Statutory Auditor and Secretarial Auditor have notreported any instance of fraud to the Audit Committee pursuant to Section 143(12) of theCompanies Act 2013 and rules made thereunder therefore there is no disclosure underSection 134(3)(ca) of the Companies Act 2013.
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 nos. 31 & 31A ofthe Standalone Annual Financial Statements which set 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. in the preparation of the annual accounts for the financial year ended on March 312020 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 March 31 2020; and of the loss ofthe Company for the year ended on March 31 2020;
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 COMPANIES ACT 2013
Borrowing and Debt Servicing:
During the year under review your Company has met all its obligations towardsrepayment of principal and interest on loans availed.
Particulars of loans given investments made guarantees /securities given:
Details of investments made and loans/ guarantees/securities given as applicable aregiven in Note no. 34 to the Annual Standalone Financial Statements.
Yearly calendar of board meetings is prepared and circulated in advance to theDirectors. During the financial year ended on March 31 2020 the Board met seven times onApril 18 2019 May 27 2019 July 16 2019 August 23 2019 October 31 2019January 13 2020 and March 12 2020. For further details of these meetings Membersmay please refer Report on Corporate Governance' which forms part of the AnnualReport.
Committees of the Board:
At present four standing committees of the Board of Directors are in place viz. AuditCommittee Nomination & Remuneration Committee Stakeholders' Relationship Committeeand Banking & Finance Committee. During the year under review recommendations of theaforesaid Committees were accepted by the Board. Risk Management Committee was dissolvedby the Board of Directors at its meeting held on April 18 2019. For further details ofthe committees of the Board Members may please refer Report on CorporateGovernance' which forms part of the Annual Report.
Remuneration Policy of the Company on appointment and remuneration of Directors KMPs& Senior Management as prescribed under Section 178(3) of the Companies Act 2013 andSEBI Listing Regulations is available on the Company's website viz.www.nextmediaworks.com. The Remuneration Policy includes inter-alia the criteria forappointment of Directors KMPs Senior Management Personnel and other covered employeestheir remuneration structure and disclosure(s) in relation thereto. The said policy hasbeen revised by the Board of Directors on June 23 2020.
The Vigil Mechanism as envisaged in the Companies Act 2013 & rules madethereunder and the SEBI Listing Regulations is addressed in the Company's"Whistle Blower Policy". In terms of the Policy directors/ employees/stakeholders of the Company may report concerns about unethical behavior actual orsuspected fraud or any violation of the Company's Code of Conduct and any incident of leakor suspected leak of Unpublished Price Sensitive Information (UPSI). The Policy providesfor adequate safeguards against victimization of the Whistle Blower. The said policy isavailable on the Company's website viz. www.nextmediaworks.com.
Particulars of employees and related disclosures:
In accordance with the provisions of Section 197(12) of the Companies Act 2013 readwith Rule 5(2) & (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 details of employees remuneration are set out in the "Annexure- B" to this Report.
In terms of the provisions of Section 136(1) of the Companies Act 2013 the Board'sReport is being sent to the Members without this annexure. Members interested in obtainingsuch information may write to the Company Secretary.
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 - C"
Extract of Annual Return: Extract of the Annual Return for the financial year endedon March 31 2020 in Form MGT-9 is annexed herewith as "Annexure - D"and is also available on the Company's website viz. www.nextmediaworks.com. The AnnualReturn will be hosted on Company's website after certification by CompanySecretary-in-Practice and filing thereof with Registrar of Companies.
Corporate Governance: The report on Corporate Governance in terms of SEBI ListingRegulations forms part of the Annual Report. The certificate issued by CompanySecretary-in-Practice confirming the compliance of conditions of corporate governance isannexed herewith as "Annexure - E".
Conservation of energy technology absorption and foreign exchange earnings &outgo: Nil
Applicable provisions of Secretarial Standards i.e. SS-1 and SS-2 relating toMeetings of the Board of Directors' and General Meetings' respectively havebeen duly followed by the Company.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
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 asapplicable. No complaint was reported during the year under review.
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.
During the year under review HT Media Limited (HTML) made an open offer under SEBI(Substantial Acquisition of Shares and Takeovers) Regulations 2011 to the publicshareholders of the Company to acquire 17392157 equity shares constituting 26% of thepaid-up share capital of the Company. In terms of of the said offer 9486823 equityshares constituting 14.18% of paid-up share capital of the Company were tendered by thepublic shareholders. Thereafter HTML acquired 24628563 equity shares (i.e 36.82% ofpaid-up share capital) from the existing promoters of the Company taking HTML'sshareholding to 51% of paid-up share capital in the Company. HTML's obligation of makingpayment to the public shareholders of Company was completed on April 15 2019.
No material changes/commitments of the Company have occurred after the end of thefinancial year 2019-20 and till the date of this report which affect the financialposition of your Company.
During the period under review Company received a show-cause notice fromInvestor Education and Protection Fund ("IEPF") Authority on December 19 2019for non-transfer of eligible shares although the unclaimed dividend in respect ofthese eligible shares was duly transferred to IEPF in the year 2009. Upon receipt of theshow cause notice the Company promptly transferred the eligible shares to IEPF Authorityin due compliance of the relevant provisions of the Act and rules made thereunder. In thereply to the show-cause notice it was submitted that the delay in non-transferof eligible shares to IEPF was merely on account of different reading of the relevantrules at Company's end.
No significant or material orders were passed by 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 conduct 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 Directors place on record their sincere appreciation for the co-operation andsupport extended by Ministry of Information & Broadcasting and all listenersadvertisers stakeholders including various government authorities shareholdersinvestors banks etc. Your Directors also place on record their deep appreciation of thecommitted services of the executives and employees of the Company.
For and on behalf of the Board
| ||(Harshad Jain) ||(Praveen Someshwar) |
|Date: June 23 2020 ||Chief Executive Officer ||Director |
|Place: New Delhi ||DIN: 08191390 ||DIN: 01802656 |