The Board of Directors are pleased to present the 15th Annual Report and theCompany's Audited Financial Statements for the financial year ended March 31 2020.
The financial performance of the Company (Standalone and Consolidated) for the yearended March 31 2020 is summarised below:
( Rs in crore)
|Particulars ||Standalone || || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations ||1149.64 ||1079.21 ||5174.94 ||4942.70 |
|Profit/(Loss) Before Interest Depreciation and Amortisation ||159.88 ||106.61 ||824.17 ||384.72 |
|Expense and Exceptional Items || || || || |
|Less: Interest ||64.84 ||52.31 ||141.55 ||100.62 |
|Depreciation and Amortisation Expense ||58.16 ||42.26 ||165.64 ||132.46 |
|Exceptional Items ||10.68 ||- ||15.26 ||- |
|Profit/(Loss) Before Tax ||26.20 ||12.04 ||501.72 ||151.64 |
|Less: Tax Expenses* ||4.44 ||(73.01) ||85.01 ||(58.76) |
|(* includes current tax deferred tax short/excess provision of tax || || || || |
|relating to earlier years) || || || || |
|Profit/(Loss) for the Year ||21.76 ||85.05 ||416.71 ||210.40 |
|Add: Other Comprehensive Income ||(6.96) ||(8.66) ||(7.53) ||(9.12) |
|Total Comprehensive Income for the Year ||14.80 ||76.39 ||409.18 ||201.28 |
|Less: Total Comprehensive Income Attributable to Non- || || ||173.79 ||43.31 |
|Controlling Interest || || || || |
|Total Comprehensive Income Attributable to Owners of the || || ||235.39 ||157.97 |
|Company || || || || |
|Less: Appropriation (Transfer to General Reserve) ||- ||- ||- ||- |
|Earnings Per Share (Basic) (in ``) ||0.13 ||0.50 ||1.41 ||0.97 |
Results of operations and the State of Company's affairs The Highlights of theCompany's Performance (Standalone)
During the year under review on standalone basis the Company recorded an operatingturnover of Rs 1149.64 crore (previous year ` 1079.21 crore). Profit before Tax was Rs26.20 crore (previous year ` 12.04 crore).
Financial Performance Review and Analysis (Consolidated)
The consolidated revenue from operations was Rs 5174.94 crore (previous year Rs4942.70 crore) and Profit before Tax on consolidated basis was Rs 501.72 crore (previousyear ` 151.64 crore).
A weak macro-environment and regulatory change in channel distribution draggedadvertiser spending especially on entertainment. However the dip in ad-revenue wasoffset by a growth in TV subscription revenue and acceleration in Digital syndication.Profitability improved led by broad-based cost controls improved ratings for flagshipchannels and operating leverage from non-ad revenue streams.
In view of the accumulated losses the Company does not propose to transfer any amountto the reserves.
In view of the accumulated losses the Board of Directors has not recommended anydividend for the year under review.
The Dividend Distribution Policy of the Company is annexed as Annexure I to this Reportand the same is put up on the Company's website and can be accessed athttp://nw18.com/reports/ reportstv18/Notices%20Events/Other%20Notices/Dividend%20Distribution%20Policy.pdf.
The Company has discontinued accepting fresh fixed deposits or renewing any depositsw.e.f. April 1 2014. The Company has repaid all fixed deposits and interest thereon.However as on March 31 2020 deposits and interest thereon aggregating to ` 61lakh remained unclaimed.
Material changes from the end of the financial year till the date of this Report
The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causingsignificant disturbance and slowdown of economic activity. The COVID-19 pandemic is amajor blackswan event which has dragged the economy and the advertising environment as aresult. The Company has evaluated impact of this pandemic on its business operations andbased on its review and current indicators of future economic conditions there is nosignificant impact on its financial statements. However the severity of the pandemic andpace of its containment remain a key monitorable. The Company remains confident that itsportfolio of genre-defining brands shall weather this storm and emerge even stronger.
Scheme of Amalgamation and Arrangement
During the year under review the Board of Directors of the Company on recommendationof the Audit Committee approved composite Scheme of Amalgamation and Arrangement betweenthe Company Den Networks Limited (DEN) Hathway Cable and Datacom Limited (Hathway)Network18 Media & Investments Limited (Network18) Media18 Distribution ServicesLimited (Media18) Web18 Digital Services Limited (Web18) and Digital18 Media Limited(Digital18) and their respective shareholders and creditors with appointed date February1 2020 under the applicable provisions of the Companies Act 2013 ("the Act").
The Schemeinter-alia provides for amalgamation of the Company Den and Hathwayinto Network18 and transfer of the cable broadband and digital businesses by Network18 toit's 3 (three) separate wholly owned subsidiaries namely Media18 Web18 and Digital18respectively.
The said Scheme is inter-alia subject to approval from shareholders andcreditors of the companies which are party to the Scheme approval of the BSE Limited theNational Stock Exchange of India Limited the Securities and Exchange Board of India theCentral Government the Hon'ble National Company Law Tribunal the Department ofTelecommunication and any other appropriate authorities as may be required.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.
The Company has obtained credit rating for its Borrowing Programme viz.Long-term/Short-term Fund based/Non-fund based Facility limits and Commercial PaperProgramme from CARE Ratings Limited ICRA Limited and India Ratings & Research PrivateLimited. The details of Credit Ratings are disclosed in the Corporate Governance Reportwhich forms part of the Annual Report.
Consolidated Financial Statement
In accordance with the provisions of the Act the Listing Regulations read withlnd AS 110-Consolidated Financial Statements lnd AS 28-lnvestments in Associates and lndAS 31-lnterests in Joint Ventures the audited Consolidated Financial Statement forms partof the Annual Report.
Subsidiaries/Joint Ventures/Associate Companies
The development in business operations/performance of the major subsidiaries/ JointVentures / Associate Companies forms part of the Management Discussion and AnalysisReport.
A statement providing details of performance and salient features of financialstatements of subsidiary companies/joint ventures/ associate companies as per Section129(3) of the Act is provided as Annexure to the Consolidated Financial Statement andtherefore not repeated to avoid duplication.
The audited Financial Statement including the Consolidated Financial Statement of theCompany and all other documents required to be attached thereto are put up on theCompany's website and can be accessed at http://nw18.com/annualReport#scrollHere.The Financial Statement of the subsidiaries of the Company are also put up on theCompany's website and can be accessed at http://nw18.com/ finance-subsidiary.
The Company has formulated a Policy for Determining Material Subsidiaries and the sameis available on the website of the Company and can be accessed at http://nw18.com/reports/reportstv18/Policies/TV18-PolicyforDeterminingMaterialSubsidia ries.pdf.
The Company has followed applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto "Meetings of the Board of Directors" and "General Meetings"respectively.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134 of the Act with respect to Directors'Responsibility Statement it is hereby confirmed that: I. in the preparation of the annualaccounts for the financial year ended March 31 2020 the applicable Accounting Standardsread with the requirements set out under Schedule III to the Act have been followed andthere are no material departures from the same; II. the Directors have selected suchaccounting policies and applied them consistently and made judgements and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 312020 and of the profit of the Company for the year ended onthat date; III. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;IV. the Directors have prepared the annual accounts of the Company for the financial yearended March 31 2020 on a going concern basis'; V. the Directors have laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and were operating effectively; and VI. the Directors have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India ("SEBI").
The Corporate Governance Report of the Company in pursuance of the Listing Regulationsforms part of the Annual Report. The requisite Certificate from a Practicing CompanySecretary confirming compliance with the conditions of Corporate Governance is attached tothe Corporate Governance Report.
Business Responsibility Report
The Business Responsibility Report as stipulated under the Listing Regulationsdescribing initiatives taken by the Company from an environmental social and governanceperspective is attached as part of the Annual Report. This report inter-aliacontains initiatives w.r.t. stakeholder relationship customer relationshipsustainability health and safety.
Contracts or Arrangements with Related Parties
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in its ordinary course of business and on an arm's lengthbasis. Further the transactions with related parties were in compliance with applicableprovisions of the Act and the Listing Regulations. Omnibus approval was obtained for thetransactions which were foreseen and repetitive in nature. A statement of all relatedparty transactions was presented before the Audit Committee on a quarterly basis.
During the year the Company had not entered into any contract/ arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions or which is required tobe reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014.
The Policy on Materiality of Related Party Transactions and on Dealing with RelatedParty Transactions is put up on the Company's website and can be accessed athttp://nw18.com/ reports/reportstv18/Policies/TV18-PolicyonMaterialityofRPTanddealingwithRPTtransactions.pdf.
The details of the transactions with Related Parties are provided in Note No. 38 to theStandalone Financial statement.
Corporate Social Responsibility
The Corporate Social Responsibility ("CSR") Committee's prime responsibilityis to assist the Board in discharging its social responsibilities by way of formulatingand monitoring implementation of the objectives set out in the Corporate SocialResponsibility Policy' ("CSR Policy"). The CSR Policy of the Company interalia covers CSR vision and objective and also provides for governanceimplementation monitoring and reporting framework. There has been no change in the policyduring the year.
The CSR policy of the Company can be accessed at http://nw18.com/reports/reportstv18/Policies/Corporate%20Social% 20Responsibility%20Policy_1.pdf.
In terms of Company's CSR objectives and policy the focus areas of engagementare as under:
Addressing identified needs of the unprivileged through initiatives directedtowards improving livelihood alleviating poverty promoting education empowermentthrough vocational skills and promoting health and well-being
Preserve protect and promote art culture and heritage
Ensuring environmental sustainability ecological balance and protection offlora and fauna
Training to promote rural sports nationally recognised sports Paralympicssports and Olympic sports
The Company would also undertake other need based initiatives in compliance withSchedule VII to the Act.
During the year under review the Company has spent Rs 2 crore in the areas ofPromoting Education which is more than the prescribed CSR expenditure of 2% of the averagenet profit of last three financial years. The Annual Report on CSR activities asstipulated under the Companies (Corporate Social Responsibility Policy) Rules 2014 isannexed herewith and marked as Annexure II to this Report.
The Company has an elaborate Risk Management Framework which is designed to enablerisks to be identified assessed and mitigated appropriately. The Board of Directors ofthe Company has constituted Risk Management Committee which has inter-aliabeen entrusted with the responsibility of Overseeing implementation/ Monitoring of RiskManagement Plan and Policy; and continually obtaining reasonable assurance from managementthat all known and emerging risks have been identified and mitigated or managed.
Further details on Risk Management activities are covered in Management Discussion andAnalysis section which forms part of the Annual Report.
Internal Financial Controls
The Company has adequate systems of internal financial controls to safeguard andprotect the Company from loss unauthorised use or disposition of its assets. All thetransactions are properly authorised recorded and reported to the Management. The Companyis following the applicable Accounting Standards for properly maintaining the books ofaccounts and reporting financial statements.
The internal financial controls have been embedded in the business processes. Assuranceon the effectiveness of internal financial controls is obtained through managementreviews continuous monitoring by functional leaders as well as testing of the internalfinancial control systems by the Internal Auditors during the course of their audits.
The Audit Committee reviews adequacy and effectiveness of Company's Internal Controlsand monitors the implementation of audit recommendations.
Directors and Key Management Personnel
In accordance with the provisions of the Act and the Articles of Association of theCompany Ms. Jyoti Deshpande Director retires by rotation at ensuing Annual GeneralMeeting of the Company. The Nomination and Remuneration Committee and Board of Directorshave recommended her re-appointment.
The terms of office of Mr. Dhruv Subodh Kaji and Mr. Rajiv Krishan Luthra asIndependent Directors will expire on October 11 2020. The Board of Directors based onthe performance evaluation and as per the recommendations of Nomination and RemunerationCommittee has recommended their reappointments as Independent Directors of the Companyfor a second term of 5 (five) consecutive years on the expiry of their current term ofoffice. The Board considers that given their background experience and contributionmade by them during their tenure the continued association of Mr. Dhruv Subodh Kaji andMr. Rajiv Krishan Luthra would be beneficial to the Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that: (i) they meet the criteria of independence as prescribed under the Actand Listing Regulations; (ii) they have registered their names in the IndependentDirectors' Databank; and (iii) they have complied with the Code for Independent Directorsprescribed in Schedule IV to the Act.
During the year Mr. Deepak Gupta ceased to be Company Secretary and Compliance officerof the Company w.e.f. January 31 2020 and Mr. Ratnesh Rukhariyar was appointed as theCompany Secretary and Compliance officer of the Company w.e.f. February 1 2020.
Save and except aforementioned there was no other change in Directors and KeyManagerial Personnel of the Company.
The Company has in place a Policy for Selection of Directors and DeterminingDirectors' Independence' and Remuneration Policy for Directors Key ManagerialPersonnel and Other Employees'. These policies are put up on the Company's website and canbe accessed athttp://nw18.com/reports/reportstv18/Policies/TV18PolicyonSelectionofDirectors&DeterminingIndependence.pdfandhttp://nw18.com/reports/reportstv18/Policies/TV18RemunerationPolicyforDirectorsKMPsandotheremployees.pdf.
The Policy for Selection of Directors and Determining Directors' Independence sets outguiding principles for Nomination and Remuneration Committee for identifying persons whoare qualified to become directors and determining directors' independence if the personis intended to be appointed as independent director. There has been no change in thispolicy during the year under review.
The Remuneration Policy for Directors Key Managerial Personnel and Other Employeessets out guiding principles for Nomination and Remuneration Committee for recommending tothe Board the remuneration of Directors Key Managerial Personnel and other employees.There has been no change in the policy during the year under review.
The Company has a policy for performance evaluation of the Board Committees and otherindividual Directors (including Independent Directors) which includes criteria forperformance evaluation of Non-Executive and Executive Directors.
In accordance with the manner specified by the Nomination and Remuneration Committeethe Board carried out performance evaluation of the Board its Committees and IndividualDirectors. The Independent Directors separately carried out evaluation of ChairpersonNon-Indpendent Directors and Board as a whole. The performance of each Committee wasevaluated by the Board based on views received from respective Committee Members. Thereport on performance evaluation of the Individual Directors was reviewed by theChairperson of the Board and feedback was given to Directors.
Auditors & Auditors' Reports Statutory Auditor
S.R. Batliboi & Associates LLP Chartered Accountants (ICAI Firm Regn. No.101049W/E300004) were appointed as Statutory Auditors of the Company for a term of 5(_ve) consecutive years at the Annual General Meeting held on September 25 2017. TheCompany has received confirmation from them to the effect that they are not disqualifiedfrom continuing as Auditors of the Company.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
In accordance with the provisions of Section 148(1) of the Act read with the Companies(Cost Records and Audit) Rules 2014 the Company has maintained cost accounts andrecords. The Board had appointed M/s Pramod Chauhan & Associates Cost Accountants asthe Cost Auditor of the Company for conducting the audit of the cost records of theCompany for the financial year 2019-20. Further they have been appointed as the CostAuditor by the Board for the financial year 2020-21.
The Board had appointed M/s Chandrasekaran Associates Company Secretaries to conductthe Secretarial Audit for the financial year 2019-20. The Secretarial Audit Report for thefinancial year ended March 31 2020 is annexed with this Report and marked as AnnexureIII to this Report. The Secretarial Audit Report does not contain any qualificationreservation adverse remark or disclaimer.
(i) Meetings of the Board
During the financial year ended on March 31 2020 5 (Five) Board meetings were held.Further details of the meetings of the Board and its Committees are given in theCorporate Governance Report forming part of the Annual Report.
(ii) Audit Committee
The Audit Committee of the Company comprises Mr. Adil Zainulbhai (Chairman) Mr. DhruvSubodh Kaji Mr. Rajiv Krishan Luthra and Mr. P.M.S. Prasad. During the year all therecommendations made by the Audit Committee were accepted by the Board.
(iii) Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Company comprises Mr. AdilZainulbhai (Chairman) Mr. Dhruv Subodh Kaji and Mr. P.M.S. Prasad.
(iv) Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company comprises Mr. Dhruv SubodhKaji (Chairman) Mr. Adil Zainulbhai Mr. Rajiv Krishan Luthra and Mr. P.M.S. Prasad.
(v) Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee of the Company comprises Mr. Dhruv Subodh Kaji(Chairman) Mr. P.M.S. Prasad and Mr. Rahul Joshi.
(vi) Vigil Mechanism
The Company promotes ethical behaviour in all its business activities. Towards thisthe Company has adopted a Policy on Vigil Mechanism and Whistle Blower. The Company hasconstituted an Ethics & Compliance Task Force to process and investigate the protecteddisclosures made under the Policy. The confidentiality of those reporting violations ismaintained and they are not subjected to any discriminatory practice or victimisation. TheAudit Committee oversees the Vigil Mechanism. The Policy on Vigil Mechanism and WhistleBlower is available on the Company's website and can be accessed athttp://nw18.com/reports/reportstv18/Policies/Policy%20on%20Whistle%20Blower%20Policy-Vigil%20 Machanism.pdf.
(vii) Prevention of Sexual Harassment at Workplace
The Company has complied with the provisions relating to the constitution of InternalComplaints Committee as specified under Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The other disclosures under this Actare given in the Business Responsibility Report which forms part of the Annual Report.
(viii) Particulars of Loans Given Investments Made Guarantees Given and SecuritiesProvided
Particulars of loans given Investments made Guarantees given and Securities providedby the Company along with the purpose for which the loan or guarantee or security isproposed to be utilised by the recipient are provided in the Standalone FinancialStatement. Please refer Note nos. 6 14 38 and 43 to the Standalone Financial Statement.
(ix) Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
Pursuant to Section 134(3)(m) of the Act read with Rule 8(3) of the Companies(Accounts) Rules 2014 relevant disclosures are given below:
a) Conservation of Energy
The Company is not an energy intensive unit hence alternate source of energy may notbe feasible. However regular efforts are made to conserve the energy. The Companyevaluates the possibilities and various alternatives to reduce energy consumption.Further use of low energy consuming LED lightings is being encouraged.
b) Technology Absorption
The Company is conscious of implementation of latest technologies in key working areas.Technology is ever-changing and employees of the Company are made aware of the latestworking techniques and technologies through workshops group e-mails and discussionsessions for optimum utilisation of available resources and to improve operationalefficiency. The Company is not engaged in manufacturing activities. Therefore certaindisclosures on technology absorption and conservation of energy etc. are not applicable.
During the year there has been no expenditure on Research and Development.
c) Foreign Exchange Earnings and Outgo
During the year under review the Company earned ` 33.72 crore of foreignexchange and used Rs 70.34 crore of foreign exchange both on actual basis.
(x) Annual Return
As required under Section 134(3)(a) of the Act Annual Return is put up on the websiteof the Company and can be accessed at http://nw18.com/reports/reportstv18/Notices%20Events/TV18MGT7March2019.pdf. Extract of the Annual Return in form MGT-9 for theFinancial Year 2019-20 can be accessed at http://nw18.com/reports/reportstv18/Notices%20Events/TV18_Extract_of_Annual_ Return_2019-20.pdf.
(xi) Particulars of Employees and Related Information
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names of the top ten employees in terms of remuneration drawn andnames and other particulars of the employees drawing remuneration in excess of the limitsset out in the said rules forms part of this Report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 also form part of this report.
Having regard to the provisions of the second proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to theMembers of the Company. Any Member interested in obtaining such information may write tothe Company Secretary to e-mail id firstname.lastname@example.org.
During the year under review:
1. The Company had not issued any equity shares with differential rights as to dividendor voting or otherwise.
2. The Company had not issued any shares (including sweat equity shares) to directorsor employees of the Company under any scheme. Voting rights on the shares issued toemployees in earlier years under Employees' Stock Option Scheme of the Company are eitherexercised by them directly or through their appointed proxy.
3. The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.
4. No significant and/or material order was passed by any Regulator/ Court/Tribunalwhich impacts the going concern status of the Company or its future operations.
5. No fraud has been reported by Auditors to the Audit Committee or the Board.
6. There is no Corporate Insolvency Resolution Process initiated under theInsolvency and Bankruptcy Code 2016.
7. There has been no change in the nature of business of the Company.
The Board of Directors wish to place on record its appreciation for the faith reposedin the Company and continuous support extended by all the employees members customersinvestors government and regulatory authorities bankers and various stakeholders.
For and on behalf of the Board of Directors
|Date: April 23 2020 ||Adil Zainulbhai |
|Place: Mumbai ||Chairman |