To the Members
Your directors have pleasure in presenting the fourteenth report on the business andoperations of your Company for the year ended
March 31 2018.
RESULT OF OPERATIONS
The financial performance of your Company on a standalone and consolidated basis forthe year ended March 31 2018 is summarized below:
| || || || || || ||(Rs. in Lacs) |
|Particulars || ||Standalone || || ||Consolidated || |
| ||FY18 ||FY17 ||Growth ||FY18 ||FY17 ||Growth |
|Revenue from Operations ||40819.14 ||38688.17 ||5.5% ||59057.22 ||59661.95 ||-1.0% |
|Other Operating Income ||220.72 ||45.39 ||386.3% ||345.73 ||233.54 ||48.0% |
|Other Income ||115.46 ||87.45 ||32.0% ||292.90 ||169.91 ||72.4% |
|Total Income ||41155.31 ||38821.01 ||6.0% ||59695.86 ||60065.39 ||-0.6% |
|Total Expenses ||28488.08 ||25841.37 ||10.2% ||42403.14 ||41376.47 ||2.5% |
|Earnings before Interest Tax ||12667.24 ||12979.64 ||-2.4% ||17292.72 ||18688.92 ||-7.5% |
|Depreciation and Amortisation || || || || || || |
|(EBITDA) || || || || || || |
|EBITDA Margin ||31.0% ||33.5% || ||29.3% ||31.3% || |
|Depreciation and Amortisation ||6087.41 ||6148.63 ||-1.0% ||7983.28 ||9160.72 ||-12.9% |
|Earnings before Interest and Tax ||6579.82 ||6831.00 ||-3.7% ||9309.44 ||9528.20 ||-2.3% |
|(EBIT) || || || || || || |
|Finance Cost ||607.79 ||802.58 ||-24.3% ||918.08 ||1372.01 ||-33.1% |
|Finance Income ||(3424.07) ||(1662.12) ||106.0% ||(798.35) ||(799.72) ||-0.2% |
|Profit before Tax (PBT) ||9396.11 ||7690.55 ||22.2% ||9189.71 ||8955.91 ||2.6% |
|Profit from ||- ||- || ||648.58 ||677.78 ||-4.3% |
|Profit before tax and after of ||9396.11 ||7690.55 ||22.2% ||9838.29 ||9633.68 ||2.1% |
|profit from associates || || || || || || |
|Tax ||2145.13 ||2253.21 ||-4.8% ||3784.14 ||3621.12 ||4.5% |
|Profit after Tax (PAT) ||7250.99 ||5437.33 ||33.4% ||6054.15 ||6012.57 ||0.7% |
|Other Comprehensive Income ||5.07 ||(41.34) ||-112.3% ||(19.28) ||(162.28) ||-88.1% |
|Total comprehensive income for ||7245.91 ||5395.99 ||34.3% ||6034.86 ||5850.29 ||3.2% |
|the year net of tax || || || || || || |
|Profit for the year attributable to ||- ||- ||- ||6285.65 ||6051.48 ||3.9% |
|equity shareholder || || || || || || |
|Profit for the year attributable to ||- ||- ||- ||(231.50) ||(38.91) ||494.9% |
|Non controlling interests || || || || || || |
|Other comprehensive income ||- ||- ||- ||(20.13) ||(152.06) ||-86.8% |
|attributable to equity shareholder || || || || || || |
|Other comprehensive income ||- ||- ||- ||0.84 ||(10.22) ||-108.3% |
|attributable to Non controlling || || || || || || |
|interests || || || || || || |
|Earnings per share of Rs. 10/- each || || || || || || |
|(for the quarters not annualised): || || || || || || |
|(a) Basic ||26.06 ||19.71 ||6.71 ||22.59 ||21.93 ||2.99 |
|(b) Diluted ||26.01 ||19.70 ||6.70 ||22.55 ||21.93 ||2.83 |
For a detailed analysis of the financial performance please refer to the"Management Discussion and Analysis" Section forming part of the Annual Report.
There are no material changes or commitmentsaffectingthefinancialposition of theCompany betweentheendofthefinancialyear in question and the date of this report.
Based on the Company's performance the directors are pleased to recommend for approvalof the members a dividend of Rs. 12.50 per share for the financial year 2017-18. Thedividend on equity shares if approved by the members would involve a cash outflow of Rs.4272.30 lacs including dividend tax resulting in a payout of 58.88% of the standaloneprofits of the Company.
The paid up equity share capital of the Company as on March 31 2018 was Rs.283508010. During the year under review on December 16 2017; the Company had issuedand allotted 750000 equity shares and 1525000 share warrants each convertible intoone equity share on a preferential basis to the promoters of the Company. The Company hasnot issued any shares with differential voting rights. Also during the year under reviewthe Company has not issued any sweat equity shares. As on date and as on March 31 2018;Mr. Sanjay Gaikwad Managing Director of the Company holds 250000 share warrants eachconvertible into one equity share of the Company. As on date and as on March 31 2018none of other Directors of the Company hold instruments convertible into equity shares ofthe Company except stock options granted under the employee stock options scheme of theCompany.
EMPLOYEE STOCK OPTIONS
The Company operates the UFO Moviez India Limited -
Employee Stock Option Scheme - 2014' (ESOP Scheme 2014) which is compliant with SEBIESOP Regulations. During the year under review the Company has not granted any stockoptions under the said ESOP Scheme 2014. On April 3 2018 the Board of Directors of theCompany on the recommendations of the Compensation Committee of the
Board of Directors granted 208578 employee stock options at an exercise price of Rs.400 per option to the employees of the Company and its subsidiaries.
Further members of the Company through special resolutions passed by way of postalballot have approved repricing and change in exercise period of outstanding 628503employees stock options granted on December 12 2014. The exercise price of 628503employees stock options is repriced from Rs. 600 per option to Rs. 400 per option and theexercise period is extended up to December 11 2020.
Mr. Kapil Agarwal Joint Managing Director and Key Managerial Personnel of the Companyi.e. Mr. Ashish Malushte Chief
Financial Officer; Mr. Rajesh Mishra Chief Executive Operations
Indian Operations and Mr. Sameer Chavan Company Secretary have voluntarilyprovided an undertaking to the
Company that they will not dispose-off the equity shares arising out of conversion ofthe options (which are being repriced) for a period of 2 years from the date of member'sapproval for revision of exercise price.
The details of employee stock options form part of the notes to accounts of thefinancial statements in the Annual Report and also available on the Company's websiteunder the web link: http://www.ufomoviez.com/IR_Finance.aspx.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in the Annual Report.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014 and assuch no amount of principal or interest was outstanding as of the Balance Sheet date.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as"Annexure-1" to this report.
Your Company prepares its financial statements in compliance with the requirements ofIndian Accounting Standards (Ind AS) notified under the Companies (Indian AccountingStandards) Rules 2015 and relevant amendment rules issued thereafter as notified underSection 133 of the Companies Act 2013 the relevant provisions of the Companies Act 2013and guidelines issued by the Securities and Exchange Board of India (SEBI) as applicable.In this financial statements for the year ended March 31 2018 the financial statementsfor the previous year ended March 31 2017 and Balance Sheet as at March 31 2017 havebeen prepared and presented as per Ind AS for like-to-like comparison. The financialstatements have been prepared on a historical cost basis except for certain financialassets and liabilities which have been measured at fair value.
The financial statements are presented in Indian Rupees (INR) and all values arerounded to the nearest lacs except when otherwise indicated. The estimates and judgmentsrelating to the financial statements are made on a prudent basis so as to reflect in atrue and fair manner the form and substance of the underlying transactions and toreasonably present the state of affairs as on March 31 2018 and the profit includingother comprehensive income and cash flow and the changes in equity of the Company for theyear ended March 31 2018. There is no qualification in the standalone or in theconsolidated financial statements by the Statutory Auditors for the year under review.
The consolidated financial statements of the Company and its subsidiaries prepared inaccordance with relevant Indian
Accounting Standards (Ind AS) notified under the Companies (Indian AccountingStandards) Rules 2015 and relevant amendment rules issued thereafter as notified underSection 133 of the Companies Act 2013 form part of the Annual Report.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunals which impact the Company's going concern status and its operations in future.
SCHEME OF ARRANGEMENT
I) Amalgamation of Southern Digital Screenz India Private Limited V. N. FilmsPrivate Limited Edridge Limited and UFO International Limited with the Company:
On July 26 2016 the Board of Directors of the Company had approved the Scheme ofArrangement for the amalgamation of Company's wholly owned subsidiaries including stepdown subsidiaries namely Southern Digital
Screenz India Private Limited (SDS') V. N. Films Private Limited (VNFPL')Edridge Limited (EL') and UFO International Limited (UIL') (together referredto as the merging companies') with the Company subject to all the necessarystatutory / regulatory approvals (the Scheme').
The appointed date for the amalgamation for VNFPL EL and UIL is April 01 2016 and forSDS the appointed date is July 01 2016. The Company had filed the Scheme with the BombayHigh Court on October 4 2016. Pursuant to notification of Section 232 of the CompaniesAct 2013 on December 9 2016 the Company filedthe Scheme with National Company LawTribunal (NCLT) Mumbai Bench on January 20 2017. The Company had final hearing with NCLTMumbai on May 17 2018 where the Scheme was approved. However formal order from the NCLTis still awaited hence effect of the Scheme is not given in these financial results forthe year ended March 31 2018.
II) Composite Scheme of Arrangement and Amalgamation amongst UFO Moviez IndiaLimited and Qube Cinema Technologies Private Limited and Qube Digital Cinema PrivateLimited and Moviebuff Private Limited and PJSA Technosoft Private Limited:
The members of the Company have vide their meeting held on May 21 2018; approved theComposite Scheme of Arrangement and Amalgamation amongst UFO Moviez
India Limited (UFO') and Qube Cinema Technologies Private Limited (QCTPL')and Qube Digital Cinema Private Limited (QDCPL') and Moviebuff Private Limited(MPL') and PJSA Technosoft Private Limited (PJSA') and their respectiveshareholders and creditors (Scheme').
On May 25 2018 the Company has filed the petition with the Hon'ble National CompanyLaw Tribunal Mumbai Bench to obtain its sanction embodied to the aforesaid Scheme. Operationof the Scheme
The said Composite Scheme of Arrangement and Amalgamation will operate simultaneouslyin four stages as under:
all the businesses of QCTPL which are synergic with the Company will be demerged intoQDCPL on a going concern basis leaving behind businesses in QCTPL that are not synergic orhave limited growth potential
amalgamation of MPL which holds various intellectual properties into QDCPL and therebyconsolidating and combining the businesses of QCTPL and MPL in QDCPL and consequentdissolution of MPL without winding up
amalgamation of QDCPL into UFO and consequent dissolution of QDCPL without winding up.
slump sale of the transferred undertaking of UFO into PJSA
Rationale and Key features of the Scheme:
QCTPL and UFO are engaged in similar business. UFO has developed an efficient satellitedelivery mechanism for delivery of content into theatres using
MPEG4 technology. QCTPL on the other hand uses MPEG2 technology and also developedits own DCI compliant servers. The resultant entity will thus have all the complementarytechnologies at its disposal and will be in a position to offer its clients acomprehensive bouquet of services. Additionally based on evaluation of technologies theresultant entity will be able to use best features of these technologies for growth of itsbusiness in a competitive manner.
While QCTPL has a very strong presence in southern regions of India UFO has a highernumber of its screens in northern regions with reasonable presence in southern regions ofIndia. Thus the proposed restructuring will ensure an all India presence for the combinedentity thereby facilitating provision of wholesome offering across the country to itsadvertising clients. This will help in substantial growth of the advertising business forthe resultant Company.
The Scheme will bring about synergy of operations and benefit of scale sinceduplication of administrative efforts and legal and regulatory compliances will beunified.
The Scheme will provide an opportunity to employees and shareholders of QCTPL to becomepart of a listed entity. The resultant entity will be able to provide better and moreefficient and comprehensive services to all the stakeholders of the industry such asexhibitors distributors advertisers etc.
QCTPL has developed certain new software technologies and processes (QCTPLProducts') which are currently in the process of commercialization. UFO in addition toits screen network in India also has a network of screens overseas. QCTPL products haveglobal application and the combined network post amalgamation will allow fastermonetization of QCTPL products not only in India but overseas as well. Post merger ofQDCPL into UFO the business relating to the QCTPL Products i.e. IP business will be hivedoff into PJSA thereby creating pure technology play.
The IP business derives value significantly from the technical expertise and talent ofthe QCTPL promoters.
Further synergies will be derived from such talent acquisitions pursuant to theScheme. Accordingly the continual support of the QCTPL promoters would be required uponimplementation of the Scheme for the technology aspects.
ISSUE AND ALLOTMENT OF EQUITY SHARES AND SHARE WARRANTS ON PREFERENTIAL BASIS
During the year under review the Company on preferential basis had allotted 750000equity shares and aggregate of 1525000 share warrants to certain promoter entities .
Salient features of the Preferential Issue:
The preferential allotment proceeds will be used for general corporate purposes (whichcould include partly funding the Company's acquisition of shares in Qube Digital Cinema
Private Limited) and to fund the long term growth of the Company.
The equity shares and share warrants were allotted at an issue price of Rs. 400.13/-each determined in accordance with the Chapter VII of the SEBI (Issue of Capital andDisclosure
Requirements) Regulations 2009. The Company had allotted 750000 equity shares toValuable Media Limited at an issue price of Rs. 400.13/- each aggregating to Rs. 3000.98Lacs and 250000 share warrants to Mr. Sanjay Gaikwad; 250000 share warrants to Mr.Narendra Hete and 1025000 share warrants to Valuable Media Limited aggregating to Rs.6101.98 Lacs.
The share warrants are exercisable with a period of 18 months from the date of theirallotment i.e. December 16 2017 in one or more tranches.
The Company has received a subscription amount of Rs. 1525.50 Lacs i.e. 25% of theissue price of the share warrants at the time of subscription and remaining 75% of theissue price of the share warrants will be received by the Company at the time ofexercising of the said share warrant. The share warrants will lapse if not exercised witha period of 18 months from their allotment and subscription amount received by the Companywill be forfeited.
MANAGEMENT'S DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34(2) of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("TheListing Regulations") the Management Discussion and Analysis is set out in the AnnualReport.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
As at March 31 2018 your Company had 7 direct subsidiaries 9 step-down subsidiariesand 5 associates.
During the year under review the Company has made an investment of Rs. 1 Lac in PJSATechnosoft Private Limited (PJSA) by purchasing 10000 (representing 100% of equity sharecapital of PJSA) equity shares from existing shareholders of PJSA. Post this acquisitionPJSA became a wholly owned subsidiary of the Company.
During the year under review the Board of Directors reviewed the affairs of thesubsidiaries. The consolidated financial statements of the Company and all itssubsidiaries have been prepared in accordance with Section 129(3) of the Companies Act2013 and form part of the Annual Report. Further a statement containing the salientfeatures of the financial statements of the subsidiaries of the Company in the prescribedformat AOC- 1 is attached to the financial statements. The statement also provides thedetails of performance and financial position of each of the subsidiaries associates andjoint ventures.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the Company'swebsite under the web link: http://www.ufomoviez.com/IR_Finance.aspx. Thesedocuments are also available for inspection during business hours at the Company'sregistered office in Mumbai India.
The Corporate Governance Report for the financial year ended March 31 2018 forms partof the Annual Report.
Your Company recognizes and embraces the benefits of having a diverse Board thatpossesses a balance of skills experience expertise and diversity of perspectivesappropriate to the requirements of the businesses of the Company. The Company seesincreasing diversity at the Board level as an essential element in maintaining competitiveadvantage. A truly diverse Board will include and make good use of the differences in theskills regional and industry experience and background among directors. Thesedifferences are considered in determining the optimum composition of the Board. The Boardhas adopted a Board Diversity Policy which sets out its approach in this regard.
The Board Diversity Policy is available on the Company's website under the web link:http://www.ufomoviez.com/IR_ Corporate_Governance.aspx
NUMBER OF MEETINGS OF THE BOARD
The Board met 9 times during the financial year the details of which are given in theCorporate Governance Report that forms part of the Annual Report. The intervening gapbetween any two consecutive board meetings was within the period prescribed by theCompanies Act 2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The current policy is to have an optimum combination of executive and non-executivedirectors with an independent non- executive chairman to maintain the independence of theBoard and to separate the functions of governance and management in the Company.
As on March 31 2018 the Board consisted of eight members two of whom are executivedirectors and six are non-executive directors. Out of the 6 non-executive directors 3 areindependent directors. The Board periodically evaluates the need for change in itscomposition and size.
The policy of the Company on directors' appointment and remuneration including thecriteria for determining the qualifications the positive attributes independence andother matters provided under Sub-section (3) of Section 178 of the Companies Act 2013adopted by the Board is appended as "Annexure-2" to this report. Theremuneration paid to the directors is as per the terms laid out in the Nomination andRemuneration Policy of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and under the Listing Regulations.
Regulation 4(2)(f) of the Listing Regulations mandates that the Board shall monitor andreview the Board evaluation framework.
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation of independentdirectors shall be done by the entire Board of Directors excluding the director beingevaluated.
The performance evaluation of all the individual directors the Board as a whole andthat of its committees was conducted based on the criteria and framework adopted by theBoard. The Board approved the evaluation results as recommended by the Chairman of theNomination and Remuneration Committee.
TRAINING OF INDEPENDENT DIRECTORS
The Company familiarizes its Directors including independent directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company etc. through variousprogrammes. These include orientation programme upon induction of new Directors as wellas other initiatives to update the Directors on a continuing basis.
The familiarization programme for Independent Directors is disclosed on the Company'swebsite under the web link: http:// www.ufomoviez.com/IR_Corporate_Governance.aspx TheManaging Director and the Joint Managing Director also have one-on-one discussion with theDirectors on a regular basis. In addition the Senior Management of the Company interactsregularly with the Directors both individually and collectively. The above initiativeshelp the Directors to understand and keep themselves updated about the Company itsbusiness and the regulatory framework in which the Company operates and equip themselvesto effectively fulfill their role as Directors of the Company.
Further at the time of appointment of an independent director the Company issues aformal letter of appointment outlining his/ her role function duties andresponsibilities as a director. The terms and conditions of their appointment areavailable on the Company's website under the web link: http://www.ufomoviez.com/IR_Corporate_Governance.aspx
There were no fresh appointments of Directors during the year under review.
RETIREMENT AND RE-APPOINTMENTS
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. Varun Laul retires by rotation atthe forthcoming Annual General Meeting. However Mr. Laul has expressed his unwillingnessto get re-appointed as a Director of the Company due to some other commitments.
The Companies Act 2013 provides for the appointment of independent directors.Sub-section (10) of Section 149 of the Companies Act 2013 provides that independentdirectors shall hold office for a term of up to fiv e consecutive years on the Board of aCompany and shall be eligible for re-appointment on passing a special resolution by theshareholders of the Company. Accordingly all the independent directors were appointed bythe shareholders at the general meeting as required under Section 149(10) for a period ofthree years with effect from November 20 2014.
Further according to Sub-section (11) of Section 149 no independent director shall beeligible for appointment for more than two consecutive terms of five years. Sub-section(13) states that the provisions of retirement by rotation as defined in Sub-sections (6)and (7) of Section 152 of the Companies Act 2013 shall not apply to such independentdirectors.
During the year under review Mr. Sanjeev Aga Ms. Lynn de Souza and Mr. S. Madhavanwere re-appointed as Independent Directors of the Company w.e.f. November 20 2017 for thesecond term of five years.
The Board of Directors of the Company upon the recommendation of the Nomination andRemuneration Committee and subject to approval of the members of the Company havere-appointed Mr. Sanjay Gaikwad as Managing Director and Mr. Kapil Agarwal as JointManaging Director of the Company for a further period of 5 years from the expiry of theirpresent term of office. The notice of the 14th Annual General Meeting of theCompany contains the resolutions for re-appointment of Mr. Sanjay Gaikwad as ManagingDirector and Mr. Kapil Agarwal as Joint Managing Director of the Company for a term offive years.
During the year under review none of the directors resigned from the Board of theCompany.
INDEPENDENT DIRECTORS' MEETING
The Independent Directors met on May 17 2017 July 11 2017 and June 14 2018 interalia to (a) review the performance of the Non-Independent Directors and the Board ofDirectors as a whole;
(b) review the performance of the Chairman of the Company taking into account theviews of Executive Directors and
(c) assess the quality content and timeliness of the flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform its duties.
INTERNAL FINANCIAL CONTROLS
Your Company has laid an Internal Control Framework which is commensurate with thesize scale and complexity of its operations. This framework ensures the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. Controls have been identified along with risks andmitigation processes covering major areas across all business and functions. Internalcontrols were reviewed by Internal Auditors and based on the evaluation it was concludedthat the Company's internal financial controls are adequate and were operating effectivelyas of March 31 2018.
Strengthening of controls is a continuous and evolving process in the Company. Basedupon observations findings and recommendations of the internal auditors process ownersdevelop preventive and corrective actions which are then deployed across the organization.
COMPOSITION OF AUDIT AND RISK MANAGEMENT COMMITTEE
The Audit and Risk Management Committee of the Company as on March 31 2018 comprisedof three Independent Directors
Mr. Sanjeev Aga Mr. S. Madhavan and Ms. Lynn de Souza and one Non ExecutiveNon-Independent Director Mr. Varun Laul. Mr. Sanjeev Aga is the Chairman of theCommittee.
All members of the Audit and Risk Management Committee possess requisite experience andknowledge of accounting and financial management. For further details on the Audit and
Risk Management Committee please refer to the Corporate Governance Report forming partof the Annual Report.
WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. Thedetails of the Whistle blower policy are available on the Company's website under weblink: http://www.ufomoviez.com/IR_Corporate_Governance.aspx. No complaint has beenreceived during the year under review. For further details on the Whistle blower policyplease refer to the Corporate Governance Report forming part of the Annual Report.
The Company has developed and implemented Risk Management plans in accordance with theprovisions of the Companies Act 2013 and the Listing Regulations. The Risk Managementplans defines the risk management approach of the Company and includes a periodic reviewof such risks and also the documentation mitigating measures and reporting mechanism ofsuch risks.
DIRECTORS' RESPONSIBILITY STATEMENTAS REQUIRED UNDER SECTION 134(3) (C) OF THECOMPANIES ACT 2013
Based upon the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the Internal Statutoryand Secretarial Auditors and the reviews performed by the Management and the relevantBoard Committees including the
Audit Committee the Board is of the opinion that the Company's internal financialcontrols were adequate and operating effectively during the financial year 2017-18.
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013the Board of Directors to the best of their knowledge and ability confirm that: (a) thefinancial statements for the financial year ended March 31 2018 have been prepared on agoing concern basis in accordance with relevant Indian Accounting Standards (Ind
AS) and there are no material departures from the same;
(b) the accounting policies selected were applied consistently and the judgments andestimates related to financial statements have been made on a reasonable and prudent basisso as to reflect in a true and fair manner the form and substance of the underlyingtransactions and to reasonably present the state of affairs as on March 31 2018 and theprofit including other comprehensive income and cash and the changes in equity of theCompany for that period; (c) proper and sufficientcare has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (d) internal financial controls to be followed by the Company havebeen laid down and that such internal financial controls are adequate and are operatingeffectively; and
(e) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted a CSR Committee headed by Mr. Sanjay Gaikwad as Chairman withMs. Lynn de Souza and Mr. Kapil Agarwal as Members. The Committee is responsible forformulating and monitoring the CSR policy of the Company. The Company has adopted a CSRpolicy in compliance with the provisions of the Companies Act 2013.
The average net profit of the Company computed as per Section 198 of the CompaniesAct 2013 during the three immediately preceding financial years was Rs. 6797.78 lacs.It was hence required to spend a minimum of Rs. 135.96 lacs on CSR activities during thefinancial year 2017-18 being 2% of the average net profits of the three immediatelypreceding financial
The Company has contributed an amount of Rs. 218.19 lacs towards CSR activities againstits obligation of Rs. 135.96 lacs for the financial year 2017-18.
The annual report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as "Annexure-3" forming part ofthis Report.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Sub-section (3) (m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are enclosed as"Annexure-4" to this report.
Your Company is publishing only the statutory disclosures of the Annual Report in theprint version. Additional information is available on the Company's websitewww.ufomoviez.com. Electronic copies of the Annual Report 2017-18 and Notice of the 14thAnnual General Meeting are sent to all members whose email addresses are registered withthe Company / Depository Participant(s). For members who have not registered their emailaddresses physical copies of the Annual Report 2017-18 and the Notice of the 14thAnnual General Meeting are sent in the permitted mode. Members requiring physical copiescan send a request to the Company.
AUDITORS Statutory Auditors
As per the provisions of Section 139 of the Companies Act 2013 no listed Company canappoint or re-appoint an audit firm as an auditor for more than two years. The second termof M/s. S.R. Batliboi & Associates LLP Chartered Accountants as Statutory Auditorsof the Company will expire on the conclusion of the ensuing 14th Annual GeneralMeeting scheduled to be held on August 9 2018. Accordingly the Board of Directors of theCompany at their meeting held on May 29 2018 subject to the approval of members of theCompany have approved the appointment of M/s. B S R & Co. LLP Chartered Accountantsas the Statutory Auditors of the Company to hold office from the conclusion of this 14thAnnual General Meeting untill the conclusion of 19th Annual General Meeting fora consecutive term of five years. In this regard the Company has received a certificatefrom M/s. B S R & Co. LLP Chartered Accountants to the effect that if they areappointed as statutory auditors of the Company for the financial year 2018-19 it would bein accordance with the provisions of Section 141 of the Companies Act 2013.
Mr. Dharmesh Zaveri of M/s. D.M. Zaveri & Co. Practising Company Secretaries wasappointed to conduct the secretarial audit of the Company for the financial year 2017-18as required under Section 204 of the Companies Act 2013 and Rules thereunder. Thesecretarial audit report for financial year 2017-18 forms part of the Annual Report as"Annexure-5" to this report. There are no qualifications or adverse observationsby the Secretarial Auditor of the Company for the year under review.
The Company has complied with the applicable Secretarial Standards i.e. SS-1 and SS-2relating to Meetings of the Board of Directors' and General Meetings'respectively.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format is appended as "Annexure-6" to thisreport.
Your Directors believe that the key to success of any Company are its employees. YourCompany has a team of able and experienced professionals whose dedicated efforts andenthusiasm has been an integral part of your Company's growth.
Your Directors would like to place on record their deep appreciation of theircontinuous effort and contribution to the Company.
Particulars of employees
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 disclosingthe ratio of the remuneration of each director to the median employee's remuneration andsuch other details is appended as "Annexure-7" to this report.
A statement containing the names of every employee employed throughout the financialyear 2017-18 and in receipt of remuneration for the said financial year which in theaggregate was not less than Rs. 102 lacs and employed for a part of the financial year2017-18 was in receipt of remuneration for any part of the said financial year at a ratewhich in the aggregate was not less than Rs. 8.5 lacs per month and top 10 employeesterms of five consecutive in terms of remuneration under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed as"Annexure-7" to this report.
Policy on prevention prohibition and redressal of sexual harassment at workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment at the workplace in line with the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules there under. The Policy aims to provide protection to employees at theworkplace and prevent and redress complaints of sexual harassment and for mattersconnected or incidental thereto with the objective of providing a safe workingenvironment where employees feel secure. The Company has also constituted an InternalComplaints Committee to inquire into complaints of sexual harassment and recommendappropriate action. The Company has not received any complaint of sexual harassment duringthe financial year 2017-18.
Statements in this Report and the Management Discussion & Analysis describing theCompany's objectives projections estimates expectations or forecasts may beforward-looking within the meaning of applicable securities laws and regulations. Actualresults may differ materially from those expressed or implied in the statement. Importantfactors that could influence the Company's operations include economic conditionsaffecting demand/supply and price conditions in the domestic and overseas markets in whichthe Company operates changes in government regulations tax laws economic developmentswithin the country and other incidental factors.
Your directors thank all customers vendors investors bankers and all other businesspartners for their excellent support during the year. They wish to place on recordappreciation of the strong commitment and contribution made by employees of the Company atall levels.
Your directors also take this opportunity to place on record their appreciation forcontinued co-operation and unstinted support received from the film producersdistributors exhibitors and advertisers who have contributed to the success of theCompany. You directors thank the Central Government various State Governments and otherGovernment agencies and bodies for their support and look forward to their continuedsupport in the future.
| ||For and on behalf of the Board of Directors || |
| ||Sanjay Gaikwad ||Kapil Agarwal |
| ||Managing Director ||Joint Managing Director |
| ||DIN: 01001173 ||DIN: 00024378 |
|Place: Mumbai || || |
|Date: June 14 2018 || || |