You are here » Home » Companies » Company Overview » Zee Entertainment Enterprises Ltd

Zee Entertainment Enterprises Ltd.

BSE: 505537 Sector: Media
NSE: ZEEL ISIN Code: INE256A01028
BSE 00:00 | 03 Dec 350.00 7.85
(2.29%)
OPEN

347.00

HIGH

356.00

LOW

345.30

NSE 00:00 | 03 Dec 349.55 7.40
(2.16%)
OPEN

348.00

HIGH

356.00

LOW

345.50

OPEN 347.00
PREVIOUS CLOSE 342.15
VOLUME 1956009
52-Week high 362.85
52-Week low 166.80
P/E 21.65
Mkt Cap.(Rs cr) 33,618
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 347.00
CLOSE 342.15
VOLUME 1956009
52-Week high 362.85
52-Week low 166.80
P/E 21.65
Mkt Cap.(Rs cr) 33,618
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Zee Entertainment Enterprises Ltd. (ZEEL) - Director Report

Company director report

TO THE MEMBERS

Your Directors are pleased to present the Thirty-Eighth Annual Report of your Company'sbusiness and operations along with the Audited Financial Statements (‘AnnualAccounts') for the financial year ended March 31 2020.

1. FINANCIAL RESULTS

The Financial Performance of your Company for the financial year ended March 31 2020is summarized below: (Rs. MILLIONS)

Particulars Standalone Year Ended Consolidated Year Ended
31.03.2020 31.03.2019 31.03.2020 31.03.2019
Revenue from Operations 72190 68579 81299 79339
Other Income 2278 1894 2836 2515
Total Income 74468 70473 84135 81854
Total Expenses 59596 44299 71705 57315
Share of Associates / Joint Ventures - - (24) 24
Exceptional Items (2843) (218) (2843) (218)
Profit Before Tax 12029 25956 9563 24345
Provision for Taxation (net) 4549 9406 4317 8673
Profit after Tax 7480 16550 5246 15672

There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which affect the financial position ofZee Entertainment Enterprises Limited ("the Company" or "ZEE"). Basedon the internal financial control framework and compliance systems established in theCompany the work performed by Statutory Internal Secretarial Auditors and reviewsperformed by the management and/or the Audit Committee of the Board your Board ofDirectors (‘Board') is of the opinion that the Company's internal financial controlsare adequate and working effectively during the Financial Year 2019-20.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of the Companies Act 2013 ("Act") andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") the consolidated audited financialstatement forms part of the Annual Report.

2. COVID-19

The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causingsignificant disturbance and slowdown of economic activity. In many countries businessesare being forced to cease or limit their operations for long or indefinite periods oftime. Measures taken to contain the spread of the virus including travel bansquarantines social distancing and closures of non-essential services have triggeredsignificant worldwide resulting in an economic slowdown.

As a pioneer in the realm of entertainment in India your Company embraced &optimally utilized technology solutions amidst lockdown in order to create and offerfresh content for its consumers. The Company demonstrated its ability & potential tostay ahead of the industry with a sharp focus on keeping its viewers entertained and wellinformed across key consumer touchpoints.

The Company leveraged technology and implemented various solutions across its keyfunctions swiftly and collaboratively creating the bedrock for creative innovation incontent offering. The Company adapted to change by enabling innovations through remoteproduction of content over mobile & professional cameras by using video & audioproduction technologies to support broadcast digital & social platforms.

At ZEE the health and safety of all employees has always been the top priority. Inline with the guidelines issued by the Government the Company implemented key measuresacross every touchpoint to safeguard its Human Capital. ZEE has always been agile inadapting to change which made the transition to

‘Work from Home' operations swift and smooth ensuring minimal disruption to theviewers and maintaining business continuity with innovations like edit from homesolutions. All meetings across business verticals and functions were conducted seamlesslywith optimal utilization of digital solutions like Microsoft Teams. We ensured that theemployees had access to all critical business applications with undisrupted support whileworking from home with zero compromise on data and content security.

Strong proactive steps were taken in transforming the workspace keeping disruptions tobusinesses social distancing norms at the fore. All the necessary safety and hygieneprotocols were followed for the critical verticals functioning from office includingalternate seating arrangements implementing a clean desk policy and temperature screeningat all entry points. Frequent sanitization of all surfaces was maintained and handsanitizers were placed at all strategic locations within the office premises. We also setup a 24hour emergency helpline with doctors and counsellors to address all medical queriesand the emotional well-being of our employees. Keeping our Human Capital at the fore keysteps were taken to provide logistical support to employees across locations by partneringwith a nationwide ambulance service. ZEE continues to take critical steps in ensuring thesafety of its people and everyone working in the close ecosystem.

3. DIVIDEND

Equity Shares: Your Directors recommend payment of Dividend of Rs. 0.30 per equityshare of Rs. 1/- each and such Equity Dividend upon declaration by the Members of theCompany at the ensuing Annual General Meeting (‘AGM') shall be payable on theoutstanding Equity Share Capital of the Company as at the Record Date of September 112020. The expected outflow on account of equity dividend based on current Paid-up EquityShare Capital of the Company would aggregate to Rs. 288 Million.

Pursuant to Finance Act 2020 dividend income will be taxable in the hands of theshareholders w.e.f. April 1 2020 and the Company is required to deduct tax at source(TDS) from dividend paid to the Members at prescribed rates as per the Income-tax Act1961.

In accordance with the provision of Regulation 43A of the Listing Regulations and anyamendments thereto your Company has formulated a Dividend Distribution Policy. The policyis available on the Company's website at www. zeeentertainment.com.

Preference Shares: In accordance with the terms of Listed 6% Cumulative RedeemableNon-Convertible Preference Shares issued as Bonus Shares in 2014 (Bonus PreferenceShares) the Company had remitted an aggregate Preference Dividend of Rs. 708.91 Millioncomprising of:

Pro-rata Preference Dividend of Rs. 0.11148 on the redemption value of Rs. 2 per BonusPreference Share for the period from April 1 2019 till the Redemption date of March 52020; and

Preference Dividend of Rs. 0.24 per share for FY 2019-20 on the Bonus Preference Sharesof Rs. 4 per share post redemption.

Transfer to Reserves

The closing balance of the retained earnings of the Company for Financial Year 2019-20after all appropriation and adjustments was Rs. 75290 Million.

4. BUSINESS OVERVIEW

During the year under review your Company delivered another strong operatingperformance despite the challenges posed by the uncertain macro environment. Theadvertising revenue was impacted by the slowing economic growth which led to a weakconsumer demand. It was further impacted due to conversion of two Free-to-Air (FTA)channels to pay in March'19. Subscription revenue on the other hand saw a significant jumpdue to the implementation of NTO (New Tariff Order) and increase in ZEE5 subscription astructural change to the distribution landscape and would be beneficial for the industryin long-term. ZEE5 released over 80 shows and original movies on the platform last yearand firmly established itself as the biggest publisher of digital original content inIndia. During the year your Company released 14 movies and received a fair share ofsuccess. Zee Music Company continued to expand its music library through acquisition ofmusic titles across languages.

As per the FICCI-EY report the Indian Media and Entertainment (M&E) industryregistered a growth of 9% in Current Year 19 reaching Rs. 1822 billion. As per thereport M&E industry is expected to grow at a CAGR of 10% to reach Rs. 2416 billionby 2022. As this report was published before COVID-19 outbreak in India the growthestimates for Current Year 20 will see a downward revision.

In the Domestic Broadcast Business your Company exited the year on a strongnote reclaiming the leadership position in the entertainment segment it had lost duringthe year due to the merger of two of its peers. Your Company also launched 4 regionalchannels which will help in strengthening its position in the regional markets.

In the Hindi General Entertainment segment Zee TV lost its leadership duringthe year. However the channel maintained its leadership in weekday prime time. &TVredefined its strategy and is now focused on the viewers from the states of the Hindiheartland.

In the Hindi movie segment your Company's portfolio of movie channels furtherstrengthened its #1 position driven by a strong movie catalogue.

In the Regional markets channel in Kannada market further strengthened its

#1 position during the year. Despite the loss of share in the second half your Companycontinued to maintain leadership in the Marathi and Bengali markets.

In the other regional markets the channels continued to focus on improving theirviewership shares.

In the International Broadcast Business your Company continued to expand thereach of its channels across geographies with new distribution partnerships.

Company's content in 18 languages including 7 foreign languages is available in morethan 170 countries.

ZEE5 your Company's OTT platform witnessed significant growth across all userparameters. The platform had 63.1mn and 6.0mn global MAUs and DAUs respectively inMarch'20 with an average watch-time of 136 minutes per viewer during the month. Duringthe year the platform entered into multiple partnerships with key players across thedigital eco-system to make its content available to a wider audience. The Company alsocompleted the commercial launch of ZEE5 in key international markets of Europe UK andCanada.

Zee Studios the movie production and distribution business was the #3 moviestudio in the country in terms of box-office collections. During FY20 the studio released14 movies across 5 languages Hindi Marathi Tamil Punjabi and Haryanvi.

Zee Music Company your Company's music publishing arm continued to expand itsmusic catalogue across languages and maintained its position as the #2 most subscribedmusic channel on YouTube.

Zee Live the live entertainment business launched ‘Supermoon' which is thefirst entertainment IP spanning comedy music and other entertainment genres. Zee livealso organised other events like ‘Arth' and ‘Zee Educare' during the year.

5. CHANGES IN CAPITAL STRUCTURE

During the year under review your Company had:

Redeemed 20% of Nominal value of Bonus Preference Shares on the 6th anniversary of itsissuance as per the terms of the issue resulting in outflow Rs. 4033.88 Million towardsthe said redemption at the rate of of Rs. 2 per Preference Share consequent to which theface value of Preference Share was changed to Rs. 4/- each. As required under Section 55of the Act an amount equivalent to such Redemption value was credited to CapitalRedemption Reserve Account of the Company. Further pursuant to the revenue.NTObroughtprovisions of the Income-tax Act 1961 the said redemption amount was treated as Dividendpay-out and accordingly was subjected to payment of Dividend Distribution Tax by theCompany;

Issued and allotted 16735 Equity Shares of Rs. 1 each upon exercise of stock optionsgranted under Company's ESOP Scheme.

Consequent to the above redemption/issuance of securities the Paid-up Share Capital ofthe Company as at March 31 2020 stood at Rs. 9028252483/- comprising of 960483235Equity shares of Rs. 1/- each and 2016942312 Bonus Preference Shares of Rs. 4/- each.Subsequent to closure of the financial year your Company had issued and allotted 21240Equity Shares upon exercise of stock options granted under the ESOP Scheme.

During the year under review the Company's Promoters had divested their stake asunder:

- In September 2019 Promoters had completed the 1st tranche of Company's stake sale toInvesco Oppenheimer Developing Markets Fund comprising sale of 11% stake in the Company.

- In November 2019 Promoters had completed the 2nd tranche of Company's stake sale toOFI Global China Fund LLC and / or its sale of 16.5% stake in the Company and in theinterim sold 5.93% stake in the market.

Promoters' shareholding in the Company was 4.77% as at March 31 2020.

6. CREDIT RATING

During the year under review Brickwork Ratings India Private Limited has revised therating assigned to the Company as the issuer of the Bonus Preference Shares listed at theStock Exchanges to ‘BWR AA+' denoting Credit Watch with Negative Implications.Further upon dilution in the stake of the promoters and promoter group during the yearthe rating was revised to ‘BWR AA'.

7. SUBSIDIARIES ASSOCIATES & JOINT VENTURES

As at March 31 2020 your Company had 28 (twenty eight) subsidiaries comprising of 8(eight) domestic subsidiaries and 20 (twenty) overseas direct and step-down subsidiariesone Associate and one Joint Venture Company.

During the year under review:

- Your Company had bought the balance 26% stake in Zee Network Distribution Limited(ZNDL) (erstwhile Zee-Turner Limited) from Turner International Private Limited makingZNDL a wholly owned subsidiary on August 9 2019;

- On March 31 2020 Evee Multimedia Inc. the overseas subsidiary of Essel VisionProductions Limited (EVPL) a wholly owned subsidiary of the Company was dissolved andwound up.

Apart from the above there was no change in number of Subsidiary/Associate/ JointVenture of the Company either by way of acquisition or divestment or otherwise during theyear under review.

Subsequent to the close of the financial year Zee TV USA Inc the overseas subsidiaryof Zee Multimedia Worldwide (Mauritius) Limited (ZMWL) a wholly owned subsidiary of theCompany was dissolved and wound up effective May 1 2020.

In line with amendments of threshold for determining Material Subsidiary as stated inRegulation 16(1)(c) of Listing Regulations ATL Media Limited a wholly owned overseassubsidiary remains a Material Subsidiary of the Company.

The policy for determining material subsidiaries of the Company is available on thewebsite of the Company www.zeeentertainment.com.

In compliance with Section 129 of the Act a statement containing requisite detailsincluding financial highlights of the operation of all subsidiaries/associate/jointventure in Form AOC-1 is annexed to this report as Annexure A.

In accordance with Section 136 of the Act the Audited Financial Statements includingthe Consolidated Financial Statements and related information of the Company and AuditedAccounts of each of subsidiary(ies) are available on the website of the Companywww.zeeentertainment.com.

8. EMPLOYEE STOCK OPTION SCHEME

An aggregate of 28220 Stock Options issued by the Company in pursuance of ZEE ESOPScheme 2009 to Mr. Punit Misra CEO - Domestic Broadcast Business were outstanding as atMarch 31 2019. During FY 2020 24700 Stock Options were granted to Mr. Punit Misra andthe said Options shall vest with him in 3 tranches and shall be convertible intoequivalent number of Equity Shares in accordance with the terms of Scheme upon payment ofExercise Price of Rs. 1/- per share by the Option Grantee. Upon exercise of vested Stockoptions by Mr. Punit Misra 16735 Equity Shares were issued and allotted to himduring FY 19-20 and 36185 unvested Stock Options were outstanding as at March 31 2020.

Requisite disclosures as required under Regulation 14 of Securities Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 is annexed to this report asAnnexure B. The Statutory Auditors of the Company M/s Deloitte Haskins & Sells LLPChartered Accountants have certified that the Company's Employee Stock Option Scheme hasbeen implemented in accordance with Securities Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 and the resolution passed by the shareholders.

The said disclosure on Company's ESOP Scheme will also be available on the Company'swebsite www.zeeentertainment.com as part of the Annual Report.

Subsequent to closure of the financial year 21240 Equity Shares were issued andallotted to Mr. Punit Misra upon exercise of options vested in April 2020.

9. CORPORATE SOCIAL RESPONSIBLITY

During the year under review out of total CSR budget of Rs. 880.90 Million (includingunutilized CSR amount of Rs. 394.8 Million carried forward from last year) the Companyhad contributed an aggregate of Rs. 0.72 Million towards various CSR Projects detailed inthe Annual Report on CSR annexed to this report. As at March 31 2020 an amount of Rs.880.18 Million remained unutilized from out of CSR budget due to non-availability ofsuitable CSR Projects.

The unutilized CSR funds have been carried forward for funding suitable CSR projects infuture.

Subsequent to the close of the Financial year i.e. from April 1 2020 to June 30 2020the Company has contributed an amount of Rs. 13.99 Crore through various programmes tocombat the global Pandemic caused by COVID-19.

Annual report on Corporate Social Responsibility activities initiated by the Companyduring the year under review in compliance with the requirements of Act is annexed tothis report as Annexure C.

10. CORPORATE GOVERNANCE AND POLICIES

In order to maximize shareholders value on a sustained basis your Company has beenconstantly reassessing and bench marking itself with well-established Corporate Governancepractices besides strictly complying with the requirements of Listing Regulationsapplicable provisions of the Act and applicable Secretarial Standards issued by theInstitute of Company Secretaries of India (‘ICSI').

In terms of Schedule V of Listing Regulations a detailed report on CorporateGovernance along with Compliance Certificate issued Auditors of the Company is attachedand forms an integral part of this Report. Management Discussion and Analysis Report andBusiness Responsibility Report as per Listing Regulations are presented in separatesections forming part of this Annual Report. The said Business Responsibility Report willalso be available on the Company's website www.zeeentertainment.com as part of the AnnualReport.

In compliance with the requirements of Act and the Listing Regulations your Board hadapproved various Policies including Code of Conduct for Directors and Senior ManagementMaterial Subsidiary Policy Document Preservation Policy Material Events Determinationand Disclosure Policy Fair Disclosure Policy Corporate Social Responsibility PolicyWhistle Blower and Vigil Mechanism Policy Policy on Dealing with Materiality of RelatedParty Transaction Policy Remuneration Policy Insider Trading Code and DividendDistribution Policy. These policies & codes along with the Directors FamiliarizationProgram and Terms and Conditions for appointment of Independent Directors have beenuploaded on Company's website www.zeeentertainment.com.

In compliance with the requirements of Section 178 of the Act the Nomination &Remuneration Committee of your Board had fixed various criteria for nominating a person onthe Board which inter alia includes the requirement of desired size and compositionof the Board age limits qualification / experience areas of expertise and independenceof individual. The Committee had also approved in-principle that the initial term of anIndependent Director shall not exceed 3 years.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Company has a balanced Board with combination of Executive and Non-ExecutiveDirectors. The Board currently comprises of 8 (eight) Directors including 1 (one)Executive Director 2 (two) Non-Executive Directors and 5 (five) Independent Directorsincluding one Independent Woman Director.

During the year under review:

1. Mr. Subodh Kumar resigned as Non-Executive Director on November 22 2019.

2. Ms. Neharika Vohra resigned as an Independent Director with effect from November 222019 citing certain instances including need for strengthening internal controls relatingto Film Acquisition etc. during FY 2018-19 as provided in her resignation letter datedNovember 22 2019. 3. Mr. Sunil Sharma resigned as Independent Director w.e.f. November24 2019 due to sale of shares by the Promoter Group citing desire of the newinstitutional investors to recast the Board in consequence of the above sale of shares.

4. Mr. R Gopalan Mr. Surender Singh and Ms. Aparajita Jain were appointed asAdditional Directors in the category of Independent Director with effect from November 252019. However Mr. Surender Singh resigned due to some unavoidable personal reasons andMs. Aparajita Jain resigned due to her professional engagements and frequent travel witheffect March 20 2020. 5. Mr. Piyush Pandey was appointed as an Additional Director in thecategory of Independent Director with effect from March 24 2020.

The Independent Directors who have resigned during the year have confirmed that therewere no other material reasons other than those provided in their resignation letter(s).

Subsequent to March 31 2020 Ms. Alicia Yi was appointed as an Additional Director inthe category of Independent Director with effect from April 24 2020.

Appropriate intimation to Ministry of Information and Broadcasting (MIB) have been madewith respect to changes in Directors during the year.

Your Board places on record its appreciation for contributions of Mr. Subodh Kumar Ms.Neharika Vohra Mr. Sunil Sharma Mr. Surender Singh and Ms. Aparajita Jain as Directors.

As per Section 161 of the Act Mr. R Gopalan Mr. Piyush Pandey and Ms. Alicia Yi shallhold office as Directors of the Company till ensuing AGM. Your Company has received noticefrom Member(s) proposing their appointment and requisite proposals seeking your approvalfor the appointment of these Directors forms part of the Notice of ensuing AGM. Your Boardrecommends these proposals for approval of the Shareholders.

In terms of Section 149 of the Act Mr. Manish Chokhani Mr. Adesh Kumar Gupta Mr. RGopalan Mr. Piyush Pandey and Mrs. Alicia Yi are the Independent Directors of theCompany.

In terms of Regulation 25(8) of the Listing Regulations they have confirmed that theyare not aware of any circumstances or situation which exists or may be reasonablyanticipated that could impair or impact their ability to discharge their duties. Based onthe declarations received from the Independent Directors the Board has confirmed thatthey meet the criteria of independence as mentioned under Regulation 16(1)(b) of theListing Regulations and that they are independent of the management.

A declaration on compliance with Rule 6(3) of the Companies (Appointment andQualification of Directors) Rules 2014 along with a declaration as provided in theNotification dated October 22 2019 issued by the Ministry of Corporate Affairs (MCA)regarding the requirement relating to enrollment in the Data Bank for IndependentDirectors has been received from all the Independent Directors along with declarationmade under Section 149(6) of the Act.

During FY 2019-20 your Board met 9 (nine) times details of the date of the meetingsand attendance of Directors at such meetings are available in Corporate Governance Reportannexed to this report.

Mr. Ashok Kurien Non-Executive Director is liable to retire by rotation at the ensuingAGM and being eligible has offered himself for re-appointment. Your Board recommends hisre-appointment.

During the year under review Mr. M Lakshminarayanan resigned as Chief ComplianceOfficer & November 25 2019 and the resultant vacancy was filled of Mr. Ashish Agarwalas Chief Compliance Officer & Company Secretary with effect from November 26 2019.Accordingly the Key Managerial Personnel of the Company as at March 31 2020 comprised ofMr. Punit Goenka Managing Director & Chief Executive and Mr. Ashish Agarwal ChiefCompliance Officer & Company Secretary.

12. PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and Listing Regulations the evaluation of annualperformance of the Directors / Board / Board Committees was carried out for the financialyear 2019-20. The details of the evaluation process are set out in the CorporateGovernance Report annexed to this Report. Performance evaluation of Independent Directorswas also undertaken by the from entire Board excluding the Independent Director beingevaluated.

13. BOARD COMMITTEES

In compliance with the requirements of Act and Listing Regulations your Board hadconstituted various Board Committees including Audit Committee Risk Management CommitteeNomination & Remuneration Committee Stakeholders Relationship Committee and CorporateSocial Responsibility Committee. Details of the constitution of these Committees whichare in accordance with regulatory requirements have been uploaded on the website of theCompany www.zeeentertainment.com. Details of scope constitution terms of referencenumber of meetings held during the year under review along with attendance of CommitteeMembers therein form part of the Corporate Governance Report annexed to this report.

14. AUDITORS

Statutory Audit

At the 35th Annual General Meeting held on July 12 2017 the Shareholders had approvedappointment of M/s Deloitte Haskins & Sells LLP Chartered Accountants having FirmRegistration No. 117366W/W-100018 as Statutory Auditors of the Company until conclusion of40th Annual General Meeting to be held in the year 2022 subject to ratification by theShareholders every year. Pursuant to the amendment to Section 139 of the Act with effectfrom May 7 2018 the requirement of seeking Shareholders ratification for continuance ofStatutory Auditor at every Annual General Meeting is no longer applicable and accordinglythe Notice of ensuing AGM does not include the proposal for seeking Shareholdersratification for continuance of Statutory Auditors. The Company has received certificateof eligibility from M/s Deloitte Haskins & Sells LLP in accordance with the provisionsof the Act read with rules made thereunder and a confirmation that they continue to holdvalid Peer Review Certificate under Listing Regulations.

The Auditors' qualification has been appropriately dealt with in Note no. 35 of theNotes to the standalone audited financial statements and in Note no. 36 of the Notes tothe consolidated audited financial statements. The Auditors' Report is enclosed with thefinancial statements in the Annual Report.

Secretarial Audit

During the year under review the Secretarial Audit of your Company was carried out byM/s Vinod Kothari & Co. Company Secretaries (Firm Registration No. P1996WB042300) incompliance with Section 204 of the Act and their unqualified Secretarial Audit report isannexed to this report as Annexure F.

Additionally in line with SEBI Circular dated February 8 2019 an Annual SecretarialCompliance Report confirming compliance of all applicable SEBI Regulations Circulars andGuidelines by the Company was issued by the Secretarial Auditors and filed with the asAnnexure G. The remarks provided in the report are self-explanatory.

Cost Audit

In compliance with the requirements of Section 148 of the Act read with Companies(Cost Records and Audit) Rules 2014 M/s Vaibhav P Joshi & Associates CostAccountants (Firm Registration No. 101329) was appointed as Cost Auditor to carry outAudit of Cost Records of the Company for Financial Year 2019-20. Requisite proposalseeking ratification of remuneration payable to the Cost Auditor for FY 2019-20 by theMembers as per Rule 14 of Companies (Audit and Auditors) Rules 2014 forms part of theNotice of ensuing AGM.

The Company has maintained cost accounts and records in accordance with the provisionsof Section 148(1) of the Act read with the Companies (Cost Records and Audit) Rules2014.

15. HUMAN RESOURCES & PARTICULARS OF EMPLOYEES

Your Company being in the business of creativity your Board believes that people arethe ultimate differentiators and efforts are taken to attract develop and retainemployees. In order to ensure sustainable business growth and become values drivencapability strong future ready growth organization your Company over the years has beenfocusing on strengthening its talent management performance management & employeeengagement processes and practices.

Employees of your Company are trained to drive values and they believe live anddemonstrate the 7 core values of the company - namely Accountability for Results CustomerFirst Humility Integrity & Respect Innovate and Solve Big Problems Economy &Frugality Velocity & Agility and Endeavor for Big Hairy Audacious Goals (BHAG).During the year your Company has moved on to build a high-trust high-performance cultureand as a result has been ranked amongst the top 100 ‘India's Best Companies to WorkFor' 2019 & 2020 and also featured amongst the Best Company to work for in the MediaIndustry for both the years in a study conducted by Great Place to WorkR Institute andThe Economic Times. Your company continues to build the talent pipeline by engaging andhiring fresh talent from renowned campuses building capabilities in key businessfunctions through training and development initiatives breaking the barriers ofcommunication building a culture of appreciation recognizing top talent and offering aseamless employee experience by migrating to SAP's SuccessFactors Human Capital Management(HCM). As on March 31 2020 your Company had 3429 employees.

Requisite disclosures in terms of the provisions of Section 197 of the Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014along with statement showing names and other particulars of employees drawing remunerationin excess of the limits prescribed under the said rules is annexed to this report asAnnexure D.

16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

Your Company is into the business of Broadcasting of General Entertainment TelevisionChannels and extensively uses world class technology in its Broadcast Operations. Howeversince this business does not involve any manufacturing activity most of the Informationrequired to be provided under Section 134(3) (m) of the Act read with the Companies(Accounts) Rules 2014 are Nil / Not applicable. The information as applicable aregiven hereunder:

Conservation of Energy: Your Company being a service provider requires minimal energyconsumption and every endeavor is made to ensure optimal use of energy avoid wastages andconserve energy as far as possible.

Technology Absorption: Your company has created a complete cloud based platform thushelping to seamlessly move from an office to a work from home scenario. This move hasensured that consumers are not affected in any manner whatsoever due to the COVID-19lockdown and have an enjoyable viewing experience. Taking a further leap by use ofadvanced technologies your Company has moved from an on premise to cloud based creativeediting services during the current year. Your company has strived to engage across alldemographics of customer base. Your Company has rolled out new player that has resulted inimprovement of the Zee5 player performance across devices that range from mobile toconnected TV thereby enhancing customer experience. Your Company has introduced live newschannels on the platform.

This has ensured that a varied customer base including all possible consumerdemographics are covered at the same time. Your Company has ensured that monetization ofassets is included in server side ad insertion on live news streams. This is in additionto pre roll and mod rolls ad insertion for Video On demand assets. Keeping the variedcustomer base as the sole point of focus your Company has made operational all paymentgateways. This has ensured that the customer experience is eased considerably and there isan increase in subscription footfalls to Zee5. Your Company has strived to enhancecustomer experience and serve them recommended content. This can be gauged from the factthat customers can now watch content based on their watch history and preferred choices.To further cater to customer needs and make content viewing a more enjoyable experienceyour Company is working to make text along with Video On demand news available in theplatform. Raising the existing bar a level higher your Company is gearing up tointroduce a platform for short form customer generated content in the year ahead.

Foreign Exchange Earnings & Outgo: During the Financial Year 2019-20 the Companyhad Foreign Exchange earnings of Rs. 3551 Million and outgo of Rs. 2471 Million.

17. DISCLOSURES i. Particulars of loans guarantees and investments:

Particulars of loans guarantees and investments made by the Company as required underSection 186 (4) of the Act and the Listing Regulations are contained in Note No. 38 to theStandalone Financial Statements.

ii. Transactions with Related Parties:

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were on an arm's length basis in the ordinary course ofbusiness and in compliance with the applicable provisions of the Act and ListingRegulations. During FY 2019-20 there are no materially significant Party Transactionsentered into by the Company with Promoters Directors Key Managerial Personnel or otherDesignated Persons which may have a potential conflict with the interest of the Company atlarge. Details of Related Party Transactions are available on your Company's website.

All related party transactions specifying the nature value terms and conditions ofthe transactions including the arms-length justification were placed before the AuditCommittee for its approval and statement of all related party transactions carried out wasplaced before the Audit Committee for its review on a quarterly basis. During the yearunder review there have been no materially significant related party transactions enteredby the Company as defined under Section 188 of the Act and Regulations 23 of the ListingRegulations and accordingly no transactions are required to be reported in Form AOC-2 asper Section 188 of the Act.

iii. Risk Management:

Your Company has well-defined operational processes to ensure that risks areidentified and the operating management is responsible for identifying and implementingmitigation plans for operational and process risks. Key strategic and business risks areidentified and managed by senior management team with active participation of the RiskManagement Committee. The risks that matter (RTM) and their mitigation plans are updatedand reviewed periodically by the Risk Management Committee of your Board and integrated inthe Business plan for each year. The details of constitution scope and meetings of theRisk Management Committee forms part of the Corporate Governance Report. In the opinion ofthe Board currently there are no risks that may threaten existence of the Company.

iv. Vigil Mechanism:

The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations to report concerns about unethical behavior. Thedetails of the policy have been disclosed in the Corporate Governance Report which is apart of this report and is also available at website of the company www.zeeentertainment.com.

v. Internal Financial Controls and their adequacy:

Your Company has adequate internal financial controls and processes for orderly andefficient conduct of the business including safeguarding of assets prevention anddetection of frauds and errors ensuring accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. The Audit Committeeevaluates the internal financial control system periodically and at the end of eachfinancial year and provides guidance for strengthening of such controls wherevernecessary. As part of Enterprise Risk Assessment and Internal Control evaluation with aview to enhance related effectiveness of control your Company has confirmed that itssystems and processes for film acquisition are operating effectively.

Further based on the legal advise obtained the Audit Committee of the Board hasdirected stringent controls for mitigating any potential risk/ implications while issuingletter of comforts or any similar documents by the Company or its subsidiary in the courseof business.

vi. Compliance with Secretarial Standards:

Your Company has complied with the applicable Secretarial Standards SS-1 relating toMeetings of Board and SS-2 relating to General Meetings.

vii. Deposits & Unclaimed Dividend/Shares:

Your Company has not accepted any public deposit under Chapter V of the Act.

During the year under review in terms of the provisions of Investors Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 as amended(IEPF Rules) unclaimed dividend declared by the Company for Financial Year 2011-12aggregating to Rs. 1.53 Million was transferred to Investors Education and ProtectionFund.

Additionally in compliance with the requirements of IEPF Rules your Company hadduring the year under review transferred 98105 Unclaimed Equity Shares of Rs. 1 each tothe beneficiary account of IEPF Authority.

The said Unclaimed Dividend and/or Unclaimed Equity Shares can be claimed by theShareholders from IEPF authority after following process prescribed in IEPF Rules. DuringFY 2020 an aggregate of 226 Unclaimed Equity Shares of the Company were re-transferred bythe IEPF Authority to the beneficiary accounts of respective claims and completion ofverification process by the Company and IEPF Authority.

viii. Annual Return:

Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT-9 is annexed to thisreport as Annexure E. The same is also available at website of the Company www.zeeentertainment.com.

ix. Sexual Harassment:

Your Company is committed to provide safe and conducive working environment to all itsemployees (permanent contractual temporary and trainees etc.) and has zero tolerance forsexual harassment at workplace. In line with the requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and rules thereunderyour Company has adopted a Policy on prevention prohibition and redressal of sexualharassment at workplace and has constituted Internal Complaints Committee across variouslocations to redress complaints received regarding sexual harassment.

During the year under review 2 (two) complaints were received by the Company and wasinvestigated in accordance with the procedure and resolved. Hence no complaint is pendingat the end of financial year.

x. Regulatory Orders:

No significant or material orders were passed by the regulators or courts or tribunalswhich impact the going concern status and Company's operations in future.

xi. Managing Director of the Company doesn't receive any remuneration or commissionfrom any of its subsidiaries.

18. RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act in relation to the Annual Accounts for theFinancial Year 2019-20 your Directors confirm that:

a) The Annual Accounts of the Company have been prepared on a going concern basis;

b) In the preparation of the Annual Accounts the applicable accounting standards hadbeen followed and there are no material departures;

c) The accounting policies selected were applied consistently and the judgments andestimates related to these annual accounts have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs profitsof thetheCompanyasatMarch312020and the Company for the year ended on that date;

d) Proper and sufficient care has been taken for accounting records in accordance withthe provisions of the Companies Act 2013 to safeguard the assets of the Company and toprevent and detect any fraud and other irregularities;

e) Requisite internal financial controls to be followed by the Company were laid downand that such internal financial controls are adequate and operating effectively. Howevercertain internal financial controls which were required to be strengthened in respect ofissuance of letter of comfort in the course of business have been since strengthened; and

f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.

19. ACKNOWLEDGEMENTS

Employees are vital and most valuable assets of your Company. Your Directors value theprofessionalism and commitment of all employees of the Company and place on record theirappreciation of the contribution and efforts made by all the employees in ensuringexcellent all-round performance. Your Board also thank and express their gratitude for theuponspecific refund support and co-operation received from all stakeholders includingviewers producers customers vendors advertising agencies investors bankers andregulatory authorities.

.