Your Directors take pleasure in submitting their 13 Annual Report on the business andoperations of your Company together with the Audited Financial
Accounts for the financial year ended March 31 2018.
1. FINANCIAL RESULTS
(Rs. in Lakhs)
|Particulars ||Current year ||Previous year |
| ||2017-2018 ||2016-2017 |
|Total Income ||47871 ||41953 |
|Total expenditure ||37248 ||32337 |
|Profit Before Taxation ||10623 ||9616 |
|Tax Expenses ||3674 ||3421 |
|Profit After Taxation ||6949 ||6194 |
|Other Comprehensive Income ||41 ||(21) |
|Total comprehensive income for the year ||6990 ||6174 |
|Less: Appropriations || || |
|General Reserve ||- ||- |
|Final Dividend^ (including Dividend Distribution Tax) ||458 ||458 |
|Balance carried to the Balance Sheet ||30689 ||24198 |
*Final dividend for the year 2017 Rs.1.40 per equity share of Rs. 10 each.
**Final dividend for the year 2016 Rs. 1.40 per equity share of Rs. 10 each.
The Company has adopted Ind AS with effect from April 01 2017. Financialstatements for the year ended and as at March 31 2017 re-stated to conform to Ind AS.Note 27 to the standalone financial statement provide further explanation on thetransition to Ind AS.
2. OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE
During the year under review the Standalone Revenue from Operations & Other Incomeincreased to Rs.47871 Lakhs as against Rs.41953 Lakhs in the previous year and theConsolidated Revenue from Operations & Other Income increased to Rs. 49036 Lakhs ascompared to Rs. 42853 Lakhs in the previous year.
Your Company had a standalone growth with a Net Profit after tax of Rs. 6949 Lakhs ascompared to the Net Profit after tax of Rs. 6194 Lakhs in the previous financial year anda consolidated growth with a Net Profit after tax of Rs. 7153 Lakhs as compared to theNet Profit after tax of Rs. 6185 Lakhs in the previous financial year.
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.
3. SUBSIDIARIES AND ASSOCIATE COMPANIES
The Company has 5 subsidiaries and 1 associate company as on March 31 2018. There hasbeen no change in the nature of business of the subsidiaries / associate during the yearunder review.
Pursuant to Section 129(3) of the Act a statement in Form AOC- 1 containing thesalient features of the financial positions of the subsidiaries / associate company formspart of this Report.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are available Company's websitewww.shemarooent.com under Investors section.
During the year ended March 31 2018 the Company does not have any material subsidiarycompanies as defined in the SEBI Listing Regulations. The Policy for determining MaterialSubsidiaries of the Company is available on the Company website at www.shemarooent.comunder Investors section.
4. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report is presented in a separate section whichforms part of this Report.
Your Directors recommend payment of Rs.1.55 per fully paid-up equity shares of Rs. 10each (i.e. 15.50% of the paid-up equity share capital of Company) as final dividend forthe financial year 2017-18 for approval of shareholders at the ensuing AGM.
The final dividend on equity shares if approved by the shareholders would involve acash outflow on account of Rs.507.92 Lakhs including dividend distribution tax.
6. TRANSFER TO RESERVE
The Company proposes to retain the entire amount of Rs. 6990 Lakhs in the profit andloss account.
7. PUBLIC DEPOSITS
During the Financial Year under review your Company has not accepted any depositswithin the meaning of Section 73 of the Act read with Companies (Acceptance of Deposits)Rules 2014.
8. ANNUAL RETURN
Pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies(Management and administration) Rules 2014 the extract of Annual Return in Form MGT 9 isenclosed as Annexure A' to the Board's Report.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Particulars of loans guarantees given and investments made during the year as requiredunder Section 186 of the Act and Schedule V of the SEBI Listing Regulations are providedin Notes 5a & 8c of the Standalone Financial Statements.
10. CREDIT RATING
CARE continued to reaffirm their rating of CARE A; Stable and IND A/Stable respectively for Long Term Bank Facilities of Rs. 159.95 crore.
11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS / COURTS
During the year under review there were no significant or material orders passed byRegulators / Courts / Tribunals against the Company impacting its going concern status andoperations in future.
12. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Act the Board of Directors tothe best of their knowledge and ability confirm that:
1. in the preparation of the Annual Accounts for the year ended March 31 2018 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;
2. the Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a fair viewof the state of affairs of the Company at the year ended March 31 2018 and of the profitof the Company for that period;
3. proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;
4. the Annual Accounts for the year ended March 31 2018 have
been prepared on a going concern basis;
5. proper internal financial controls to be followed by the Company has been laid downand that such internal controls are adequate and were operating effectively; and
6. proper systems to ensure compliance with the provisions of all applicable laws hasbeen devised and that such systems were adequate and operating effectively.
13. BAORD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review on the recommendation of the Nomination and RemunerationCommittee the Board of Directors of the Company at its meeting held on March 20 2018appointed Mr. Hiren Gada a Whole Time Director & CFO as Chief Executive Officer (CEO)and re-designated as CEO & CFO of the Company with effect from March 202018.
Mr. Buddhichand Maroo (DIN: 00169319) Director on the Board is liable to retire byrotation at the 13th Annual General Meeting (AGM) and being eligible has offered himselffor reappointment. His re-appointment is being placed for your approval at the AGM. YourDirectors recommend his reappointment as the Non-Executive Director of your Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI Listing Regulations.
b. Key Managerial Personnel
The Key Managerial Personnel of the Company as on date are:
|i. Mr. Raman Maroo ||Managing Director |
|ii. Mr. Atul Maru ||Jt. Managing Director |
|iii. Mr. Hiren Gada ||CEO & CFO |
|iv. Mr. Dipesh Gosar ||Company Secretary & Compliance Officer |
|v. Ms. Smita Maroo ||Sr. VP - Animation |
| ||Kids Digital L&M |
|vi. Ms. Kranti Gada ||Chief Operating Officer |
|vii. Ms. Mansi Maroo ||Co-producer - Film |
|viii.Mr. Vinod Karani ||EVP - Broadcast Syndication & Acquisition |
|ix. Mr. Hemant Karani ||Sr. VP - Studio |
|x. Mr. Ketan Maru ||Sr. VP - Film Production |
|xi. Mr. Bipin Dharod ||Sr. VP - Physical Sales & Distribution |
c. Meetings of Board of Directors:
During the year under review the Board met 6 times. The details of the Board meetingsand the attendance of the Directors are provided in the Corporate Governance Report whichforms part of this report.
d. Audit Committee
The Audit Committee comprises of five members. The Chairman of the Committee is anIndependent Director. The Committee met five times during the year. The details pertainingto composition of the Audit Committee and terms of reference are included in the CorporateGovernance Report which forms part of this Report.
e. Performance Evaluation of the Board
As per the provision of the Act and Regulation 17 of the SEBI Listing Regulations theBoard has carried out an annual performance evaluation of its own performance and that ofits Committees as well as performance of the Directors individually was carried outinternally. The performance evaluation of the Chairman was carried out by the IndependentDirectors at a separate meeting of the Independent Directors.
Feedback was sought by way of a structured questionnaire based on criteria approved bythe Nomination and Remuneration Committee for evaluation of performance of BoardCommittees of Board and Individual Directors. The outcome of the evaluation was sharedwith the Nomination and Remuneration Committee Board and the Directors expressed theirsatisfaction with the evaluation process.
f. Familiarisation Programme of Independent Directors
The Company undertook familiarization programme for familiarizing Director's with theCompany's operations and other relevant information which would enable them to take wellinformed decisions discharge the responsibilities and functions conferred on them.Details of familiarization programme imparted are placed on Company's website atwww.shemarooent.com under Investors section.
g. Policy on Appointment and Remuneration
In accordance with the provisions of the Act and the SEBI Listing Regulations theCompany has formulated a Policy on Nomination & Remuneration of Directors and SeniorManagement Employees on the recommendation of Nomination & Remuneration Committee. Themain objective of the said policy is to identify person for appointing on the Board and atsenior management level of the Company level and composition of remuneration isreasonable and sufficient to attract retain and motivate. The details of the Policy aregiven in the Corporate Governance Report.
14. AUDITORS AND AUDITORS REPORT
a. Statutory Auditors
M/s. M. K. Dandeker & Co. Chartered Accountants (ICAI
Firm Registration No. 000679S) were appointed as Statutory Auditors for a term of 5years at the 11 Annual General Meeting of the Company held on 26 September 2016 subjectto ratification of their appointment at every subsequent Annual General Meeting.
M/s. M. K. Dandeker & Co have expressed their willingness to continue as theStatutory Auditors of the Company and has furnished a certificate of their eligibility andconsent under Section 141 of the Act and the rules framed there under. In terms of theSEBI Listing Regulations the Auditors have confirmed that they hold a valid certificateissued by the Peer Review Board of the ICAI.
A resolution seeking ratification of their appointment forms part of the noticeconvening the 13 Annual General Meeting and the same is recommended for your considerationand approval.
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report. Further Statutory Auditors have notreported any incident of fraud to the Audit Committee of the Company in the year underreview.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act read with rules framed thereunderthe Company has appointed M/s. Manish Ghia & Associates Practicing Company Secretaryto undertake the Secretarial Audit of the Company. The Secretarial Audit Report is givenas an annexure to this report.
There are no qualifications or reservations or adverse remarks in the Report issued bythem for the financial year 2017-18 which may call for any explanation from the Board ofDirectors.
15. RELATED PARTY CONTRACTS OR ARRANGEMENTS
All Related Party Transactions executed in financial year 2017-18 were on arms' lengthbasis and in the ordinary course of business. All related party transactions are placedbefore the Audit Committee for their prior approval and the details of the related partytransactions undertaken during a particular quarter are placed at the meeting of the AuditCommittee held in the succeeding quarter.
During the year there were no related party transactions which were materiallysignificant and that could have a potential conflict with the interests of the Company atlarge. Accordingly there are no transactions that are required to be reported in Form AOC2. All related party transactions are mentioned in the notes to the accounts.
The policy on Related Party Transactions as approved by the Board is placed on thecompany's website at www.shemarooent.com under Investors section.
16. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
The disclosure with respect to remuneration as required under Section 197(12) of theAct read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is appended as Annexure B' to the Board's Report.
The information as per Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report. However as per Section136(1) of the Act the Annual Report and Financial Statements are being sent to theshareholders of the Company excluding the aforesaid information. The said information isavailable for inspection by shareholders at the Registered Office of the Company duringworking hours for a period of 21 days before the ensuing Annual General Meeting and shallbe made available to any shareholder on request.
17. INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK
The Company's Internal Control System are commensurate with nature of its businesssize scale and complexity of its operations. Internal auditing of the Company involvesthe utilisation of a systematic methodology for analysing business processes ororganisational problems and recommending solutions to add value and improve the processes.The audit approach verifies compliance with the regulatory operational and system relatedprocedures and controls. It includes control processes both on manual and IT applicationsincluding the ERP application wherein the transactions are approved and recorded. Suchcontrols have been assessed during the year under review taking into consideration theessential components of internal controls.
The Company has also appointed M/s Gawande & Associates Chartered AccountantsInternal Auditors of the Company. It formulates the audit plan scope functioning andmethodology which are reviewed every year in a manner that they cover all areas ofoperations. The Audit Committee periodically deliberates on the operations of the Companywith the Members of the Management. Reports of the internal auditors are regularlyreviewed by the management and corrective action is initiated to strengthen the controlsand enhance the effectiveness of the existing systems. Significant audit observations andfollow up actions thereon are reported to the Audit Committee.
18. RISK MANAGEMENT
The Company has in place a Risk Management Policy pursuant to the provisions ofSection 134 of the Act and Regulation 17 of the SEBI Listing Regulations. The Company hasa robust organisational structure for managing and reporting on risks.
The Senior management periodically reviews the risk management framework to keepupdated and address emerging challenges. Risk assessment and management procedures andstatus are discussed at the meetings of the Audit Committee and the Board of Directors ofthe Company.
In terms of Regulation 21 of the SEBI Listing Regulations the Constitution of RiskManagement Committee was not applicable during the financial year 2017-2018.
19. WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Vigil Mechanism as envisaged in the Act and the SEBI Listing
Regulations is implemented through the Company's Whistle
Blower Policy provides formal vigil mechanism to the Directors and employees to reporttheir concerns about unethical behaviour actual / suspected fraud or wrongful conductwithin the Company. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee.
The details of the Whistle Blower Policy are available on the website of the Company atwww.shemarooent.com under Investors section.
20. TRANSFER OF UNCLAIMED DIVIDEND / SHARE APPLICATION
MONEY DUE FOR REFUND TO IEPF
Pursuant to applicable provisions of Section 124 and 125 of the Act read with theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 all unpaid or unclaimed dividends are required to be transferred by theCompany to the Investor Education and Protection Fund (IEPF) established by the CentralGovernment after completion of seven years. Further according to the Rules the sharesin respect of which dividend has not been paid or claimed by the Members for sevenconsecutive years or more shall also be transferred to the demat account created by theIEPF Authority.
Shareholders who have not claimed their dividend warrants or share application moneydue for refund are requested to immediately send their request for issue of duplicatewarrants.
The details of unclaimed dividend / application money as on March
31 2018 are as follows:
|Particular ||Date of declaration ||Due date for transfer to IEPF |
|1. Unclaimed Final Dividend for FY 2016-2017 ||27.09.2017 ||02.11.2024 |
|2. Unclaimed Final Dividend for FY 2015-2016 ||26.09.2016 ||01.11.2023 |
|3. Unclaimed Final Dividend for FY 2014-2015 ||21.09.2015 ||28.10.2022 |
|4. Unclaimed Application Money ||27.09.2014 ||27.09.2021 |
The Company has placed on its website www.shemarooent.com the information on dividendsand application money which remain unclaimed with the Company. The information is alsoavailable on the website of the Ministry of Corporate Affairs i.e. www.mca.gov.in.
21. CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements as stipulated underSEBI Listing Regulations. The Report on Corporate Governance alongwith Certificate fromthe Auditors of the Company confirming compliance with the conditions of CorporateGovernance as stipulated under the SEBI Listing Regulations is annexed and forms part ofthis Report.
22. CONSERVATION OF ENERGY AND TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
The information relating to the Conservation of Energy and Technology Absorptionrequired under Rule 8(3)(A) and 8(3)(B) of Companies (Accounts) Rules 2014 are notapplicable to the Company due to the very nature of the industry in which it operates.However we endeavour to support the environment by adopting environment friendly practicesin our office premises.
In view of the nature of activities which are being carried on by the Company theinformation in connection with technology absorption is Nil.
The particulars regarding foreign exchange earnings and outgo during the year are givenin Note 28.2 of the Standalone Financial Statements forming part of this Report.
23. HUMAN RESOURCES
At Shemaroo we consider our employees as the most valuable resource and ensurestrategic alignment of Human Resource practices to business priorities and objectives. TheCompany takes pride in the commitment competence and dedication of its employees in allareas of the business. Attracting developing and retaining the right talent will continueto be a key strategic imperative and the organization continues its undivided attentiontowards that.
Your Company has well laid down objective and transparent processes for RecruitmentSelection Performance Management and Talent Management. To maintain its competitive edgein a highly dynamic industry it recognizes the importance of having a work force which isconsumer-focused performance-driven and future-capable. The Company is committed tonurturing enhancing and retaining its top talent through superior learning andorganizational development.
The total employee strength at the end of financial year 2017-18 is
24. SEXUAL HARASSMENT
The Company has in place policy for the prevention of sexual harassment at workplace inline with the requirements of the Women at Workplace (Prevention Prohibition &Redressal) Act 2013 and Rules made thereunder. Internal Complaints Committee (ICC) hasbeen set up to redress complaints received regarding sexual harassment. During the yearunder review no complaints were received in regards to sexual harassment.
25. CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The role of the committee is toreview the CSR Policy indicate activities to be undertaken by the Company towards CSR andformulate a transparent monitoring mechanism to ensure implementation of projects andactivities undertaken by the Company towards CSR.
A brief outline of the CSR Policy of the Company the CSR initiatives undertaken duringthe financial year 2017-18 together with progress thereon and the report on CSR activitiesas required by the Companies (Corporate Social Responsibility Policy) Rules 2014 are setout in Annexure C' to the Report.
The CSR policy is available on our website at www.shemarooent.com under Investorssection.
26. CAUTIONARY STATEMENT
Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis describing the Company's objectives projections estimates andexpectations may constitute forward looking statements' within the meaning ofapplicable laws and regulations. Although the expectations are based on reasonableassumptions the actual results might differ substantially or materially from thoseexpressed or implied. Important developments that could affect the Company's operationsincludes but not limited to changes in exchange rate fluctuations tax laws litigationlabour relations interest costs political and economic environment.
Your Directors take this opportunity to express their sincere appreciation for thesupport and co-operation extended by the shareholders customers bankers financialinstitutions government authorities and other business associates.
The Board of Directors also gratefully acknowledges for the exemplary contribution madeby the employees of the Company at all levels. Their dedicated efforts and enthusiasm havebeen pivotal to your Company's growth. The Board of Directors would also like to thank allstakeholders for the continued confidence and trust placed by them with the Company. Welook forward to continued support of all these partners in progress.
For and on behalf of the Board of Directors
|sd/- ||sd/- |
|Raman Maroo ||Atul Maru |
|Managing Director ||Jt. Managing Director |
|DIN: 00169152 ||DIN: 00169264 |
|Mumbai || |
|May 15 2018 || |