DIRECTORS' REPORT To The Members, Sri Adhikari Brothers Television Network Limited Your Directors are pleased to present the 20th Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended on 31st March, 2015. 2. DIVIDEND: The Company's overall performance during the year under review was satisfactory. Based on the performance, your directors are pleased to recommend a final dividend of Rs. 0.60 per Equity Share (Previous Year Rs. 0.60 per Equity Share), being 6% of the paid-up Equity Share Capital of the Company for the Financial Year ended on 31st March, 2015. The final dividend, if approved by the members, will absorb total cash outflow of Rs. 25.26 millions including Dividend Distribution Tax of Rs. 4.29 millions. The dividend shall be payable to those members whose name appears on the register of the members as on the date of 20th Annual General Meeting i.e. 26th September, 2015. 3. PUBLIC DEPOSITS: During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. 4. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP): In accordance with the provisions of Section 152 of the Companies Act, 2013, read with rules made there under and the Articles of Association of the Company, Mrs. Kalindi Jani, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment. On recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company appointed Mr. Pritesh Rajgor as an Additional (Independent) Director of the Company for a period of 5 (Five) years w.e.f. 14th July, 2015, subject to approval of the shareholders at the ensuing Annual General Meeting. The Company has received a Notice along with requisite deposit from a member of the Company under Section 160 of Companies Act, 2013 proposing his candidature for the office of Director of the Company. Your Board recommends the appointment/re-appointment of directors aforesaid. Mr. Arun Khakkar, Independent Director resigned from the directorship of the Company w.e.f. 15th April, 2015. The Board expresses its appreciation for his valuable guidance as an Independent Director of the Company. The Company has received declaration from all Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement. Mr. Markand Adhikari is re-appointed as Vice Chairman & Managing Director of the Company for a further period of 3 (Three) years w.e.f. 18th August, 2015 subject to the approval of members. As stipulated under the Clause 49(VIII)(E) of the Listing Agreement, brief resume of the Directors proposed to be appointed/re-appointed are given in the Notice convening ensuing Annual General Meeting. Mr. Manav Dhanda was re-designated as Chief Executive Officer (CEO) of the Company w.e.f. 29th May, 2015. During the year under review, Mr. Rakesh Gupta was re-designated as AVP - Finance and Accounts & Chief Financial Officer (CFO) of the Company w.e.f. 16th September, 2014 in compliance with the provisions of Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Mrs. Payal Garg, Company Secretary & Compliance Officer of the Company resigned w.e.f closing hours of 11th February, 2015 and Ms. Lehar Arora, was appointed as Company Secretary & Compliance Officer of the Company w.e.f. 12th February, 2015. 5. PERFORMANCE EVALUATION : Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Performance Evaluation of Independent Directors was done by the entire Board excluding the Director being evaluated and evaluation of the Board as a whole was done by Independent Directors. The criteria devised for performance evaluation consists of maintaining confidentiality, maintaining transparency, participation in company meetings, monitoring compliances, sharing the knowledge and experience for the benefit of the Company. 6. MEETINGS OF THE BOARD: The Board meets at regular intervals to discuss and review the business operations. During the year under review, the Board met 18 (Eighteen) times. The details of the Board Meetings and the attendance of the Directors at the meetings are provided in the Report on Corporate Governance. 7. COMMITTEES OF THE BOARD: Subsequent to the change in the Board of Directors of the Company, during the year, the Board re-constituted the Committees in accordance with the provisions of the Companies Act, 2013 and currently there are four Committees of the Board, as follows: 1. Audit Committee 2. Stakeholders' Relationship Committee 3. Nomination and Remuneration Committee 4. Share Transfer Committee 8. REMUNERATION POLICY: Pursuant to provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement and on the recommendation of the Nomination and Remuneration Committee, the Board has adopted a Policy on criteria for appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The salient features of the Remuneration Policy are stated in the Report on Corporate Governance which forms part of this Annual Report. 9. RISK MANAGEMENT POLICY: The Company has devised and adopted a Risk Management Policy and implemented a mechanism for risk assessment and management. The policy provides for identification of possible risks associated with the business of the Company, assessment of the same at regular intervals and taking appropriate measures and controls to manage, mitigate and handle them. The key categories of risk jotted down in the Policy are Strategic Risks, Financial Risks, Operational Risks and such other risk that may potentially affect the working of the Company. The risk management framework is supported by the Board of Directors, Management and the Audit Committee. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. The Risk Management Policy adopted by the Board, is in line with Clause 49 of the Listing Agreement. 10. WHISTLE BLOWER POLICY: The Company has adopted a Whistle Blower / Vigil Mechanism Policy as per the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Policy provides a mechanism for reporting of unethical behavior and frauds to the management. The mechanism provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee, in the exceptional cases. The details of the Vigil Mechanism Policy are explained in the Report on Corporate Governance and also available on the website of the Company, i.e. www.adhikaribrothers.com . We affirm that during the financial year 2014-15, no employee or director was denied access to the Audit Committee. 11. EXTRACT OF ANNUAL RETURN: In accordance with the provisions of Section 92(3) of the Companies Act, 2013 and the Rules framed thereunder, the Extract of Annual Return in the prescribed Form MGT 9 is appended to this Report as Annexure I. 12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The particulars of Loans, Guarantees and Investments made by the Company under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements. 13. PARTICULARS OF THE EMPLOYEES AND REMUNERATION: Pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of the ratio of remuneration of each Director to the median employee's remuneration are appended to this report as Annexure II. During the year under review, no employee was in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All the related party transactions were in the ordinary course of the business on arm's length basis and are reported in the Notes to the Financial Statements. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable. During the financial year under review, the company did not enter into any material transactions with related parties. In accordance with the provisions of Clause 49 of the Listing Agreement, the Company has formulated the Related Party Transactions Policy (the Policy) and the same is uploaded on the Company's website i.e. www.adhikaribrothers.com 15. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS: The Company has 5 (Five) Subsidiary Companies and 3 (Three) Step-down Subsidiary Companies. During the year, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with the provisions of Section 129(3) of the Companies Act, 2013, we have prepared Consolidated Financial Statements of the Company, its subsidiaries, and associates which form part of the Annual Report. Further, a statement containing the salient features of the Financial Statement of our subsidiaries and associates in the prescribed format AOC-1 is appended as Annexure III to this report. The statement also provides the details of performance and financial position of each of its subsidiaries and its associates. In accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements, including the Consolidated Financial Statements and related information of the Company are available on our website i.e. www.adhikaribrothers.com These documents will also be available for inspection at the Registered Office of the Company and of the subsidiary companies during business hours on all working days and during the Annual General Meeting. 16. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: There was no order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have a bearing on Company's operations in future. 17. COMPOSITE SCHEME OF AMALGAMATION AND ARRANGEMENT: The Board of Directors at its meeting held on 28th August, 2014 and on recommendation of Audit Committee approved the Composite Scheme of Amalgamation and Arrangement between Maiboli Broadcasting Private Limited (MBPL) and Sri Adhikari Brothers Assets Holding Private Limited (SAB Assets) and Sri Adhikari Brothers Television Network Limited (SABNTL) and UBJ Broadcasting Private Limited (UBJ) and HHP Broadcasting Services Private Limited (HHP) and MPCR Broadcasting Service Limited (MPCR) and TV Vision Limited (TVL) and SAB Events & Governance Now Media Private Limited (SAB Events) (Formerly known as 'Marvick Entertainment Private Limited') and their respective shareholders ("Scheme") under Section 391 to 394 of the Companies Act, 1956 read with Sections 78, Section 100 to 103 of the Companies Act, 1956 and Section 52 and other relevant provisions of the Companies Act, 2013. The Company received Observation Letters on the aforesaid Scheme from the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) dated 30th March, 2015 and 27th March, 2015 respectively. The Hon'ble High Court of Judicature at Bombay vide its order dated 8th May, 2015 directed the Company to conduct the Court Convened Meeting of the Equity shareholders. The Scheme was approved by the requisite majority at the said Meeting held on 19th June, 2015 through Postal Ballot and e-voting facility provided in accordance with SEBI Circular Nos. CIR/CFD/DIL/5/2013 dated February 4, 2013 and CIR/CFD/DIL/8/2013 dated May 21, 2013. The Company Scheme Petition was admitted by the Hon'ble High Court on 7th August, 2015 and the final hearing is scheduled to be held on 25th September, 2015. Hence, the impact of the above mentioned Scheme has not been given in the Financial Statements for the year ended 31st March, 2015. 18. STATUTORY AUDITORS: M/s. A.R. Sodha & Co., Chartered Accountants, Mumbai, (having FRN: 110324W) the Statutory Auditors of your Company hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that they are willing to continue as Statutory Auditors and if reappointed, their re-appointment would be within the limits prescribed under Section 139 of the Companies Act, 2013 and they are not disqualified from being appointed as Statutory Auditors of the Company. The Board recommends the re-appointment of M/s. A.R. Sodha & Co. Chartered Accountants, Mumbai, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting upto the conclusion of next Annual General Meeting of the Company and to Audit Financial Statements for the Financial Year 2015-16. 19. SECRETARIAL AUDIT : Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Manish Ghia & Associates, Company Secretaries, Mumbai, as the Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year 201415. The Secretarial Audit Report for the Financial Year under review is appended to this report as Annexure IV. 20. INTERNAL AUDIT: Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Board on the recommendation of the Audit Committee, had appointed M/s P. G. Khandekar & Co., Chartered Accountants, Mumbai as Internal Auditors of the Company. The Internal Auditor submits its reports to the Audit Committee on quarterly basis. Based on the report of internal audit, management undertakes corrective action in the respective areas and strengthens the levels of Internal Financial and other operational controls. 21. INTERNAL FINANCIAL CONTROL: The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company Policies, safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. The Audit Committee evaluates the Internal Financial Control Systems and strives to maintain the Standards of Internal Financial Control. The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this Annual Report. 22. REPORT ON CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the following have been made a part of the Annual Report and are attached to this report: • Management Discussion and Analysis • Report on Corporate Governance. • Declaration on Compliance with Code of Conduct • Auditors' Certificate regarding compliance with conditions of Corporate Governance 23. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has zero tolerance for sexual harassment at workplace and adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. There was no complaint on sexual harassment during the year under review. 24. EMPLOYEE STOCK OPTION PLAN The members of the Company through postal ballot process, the result of which was declared on 25th July, 2014, approved the Issue and Offer of upto 1,00,000 Options to the Employees of the Company under SABTNL Employee Stock Option Scheme 2014 -15 (ESOS 2014-15). During the year under review, your Company has not made any grants to the employees. 25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, details regarding Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo for the year under review are as follows: A. Conservation of Energy a. Steps taken or impact on conservation of energy - The Operations of the Company are not energy intensive. However, Company continues to implement prudent practices for saving electricity and other energy resources in its day-to-day activities. b. Steps taken by the Company for utilizing alternate sources of energy - Though the activities undertaken by the Company are not energy intensive, the Company shall explore alternative sources of energy, as and when the necessity arises. c. The capital investment on energy conservation equipment - Nil B. Technology Absorption a. The efforts made towards technology absorption - the minimum technology required for the business has been absorbed. b. The benefits derived like product improvement, cost reduction, product development or import substitution -Not Applicable c. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Not Applicable d. The expenditure incurred on Research and Development - Not Applicable 26. DETAILS OF UTILIZATION OF PROCEEDS FROM ISSUE OF SHARES AND WARRANTS: The Company has issued and allotted 1,00,00,000 Warrants convertible into even number of Equity Shares to entities in promoter group and others on 18th March, 2014 at an issue price of Rs. 75.10 per share (including premium of Rs. 65.10 per share) on preferential basis. Upto 31st March, 2014, 28,20,000 warrants were converted into equal number of Equity Shares. During the year under review, 71,80,000 warrants were converted into equal number of Equity Shares of Rs.10/- each on various dates i.e. on 14th April, 2014, 26th April, 2014, 6th May, 2014, 20th June, 2014 and 24th June, 2014. As a result of the same, the paid up equity share capital of the Company is increased to Rs. 34,94,45,000 divided into 3,49,44,500 Equity Shares of Rs. 10/- each. The Company has not issued any ADR(s), GDR(s) or any other convertible instruments. 27. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the provisions contained in Section 134(3)(c) of the Companies Act, 2013, the Board of Directors, state that: a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. they have prepared the annual accounts on a going concern basis; e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 28. ACKNOWLEDGEMENT: The Board of Directors express their gratitude for the valuable support and co-operation extended by various Government authorities and stakeholders including shareholders, banks, financial Institutions, viewers, vendors and service providers. The Board also place on record their deep appreciation towards the dedication and commitment of your Company's employees at all levels and look forward to their continued support in future as well. For and On behalf of the Board of Directors Gautam Adhikari Chairman and Whole Time Director Date: 12th August, 2015 Place: Mumbai |