DIRECTORS' REPORT To, The Members UNIVERSAL ARTS LIMITED Your Directors are pleased to present the Twentieth Annual Report together with the audited financial statements for the nine months period ended on 31st March, 2015. DIVIDEND: In view of the accumulated losses, the Board of Directors of your Company regret their inability \o-recommend any dividend for the nine months period ended on 31st March, 2015 RESERVE: In view of the accumulated losses, the Board of Directors of your Company do not proposes to carry any amount to reserve. OPERATION REVIEW: Your Company showed a steep decrease in the Income. Your Company posted Income of Rs 341.33 lacs as against Rs 441.29 lacs during the previous year. Despite Company's income was decreased yet your Company posted a Profit before tax of Rs 8.54 lacs against loss of Rs 3.33 lacs during the previous year. OUTLOOK: With the entry of Big Corporate like UTV, Eros, Dharma Productions, Fox Star Studios, Sony Pictures, Reliance Big Entertainment, Viacom18 Group, the competition has increased and thereby increasing the cost of negative rights, satellite rights, video rights, etc. This would result in requirement of huge amount of capital to survive in this business, With a small capital and negative reserves the going for the Company appears to be tough. The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E sector is on the cusp of a strong phase of growth, backed by rising consumer payments and advertising revenues across all sectors. The industry has been largely driven by increasing digitization and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people. In view of all above it appear the right opportunity is yet to come for growth of small capital based company and at the same time the draft of the Optical Disc Law to address the need for regulating piracy at the manufacturing stage is still lying with the ministry for approval. SUBSIDIARY AND ASSOCIATE COMPANIES: A statement pursuant to Section 129 of the Companies Act, 2013 relating to Company's subsidiary is attached to the balance sheet. FIXED DEPOSITS: The company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed there under apply. DIRECTORS: At the forthcoming Annual General Meeting, Mrs. Ulka Shah (DIN - 00434277) will retire by rotation and being eligible offer herself for re-appointment. A brief resume / particulars relating to her are given separately under the report of Corporate Governance. KEY MANAGERIAL PERSONNEL: Mr. Manish G. Shah, Managing Director and Mrs. Ulka Shah, Non-Executive Director are the Key Managerial Personnel of the Company as on 31st March 2015 MANAGEMENT'S DISCUSSION AND ANALYSIS: A detailed review of operations, performance and future outlook of the Company is covered under a Separate Annexure forms part to this report. BUSINESS RISK MANAGEMENT: Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risk and opportunities, the framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. PERFORMANCE EVALUATION OF CHAIRMAN, DIRECTORS, BOARD AND COMMITTEES: The evaluation framework for assessing the performance of Chairman, Directors, Board and Committees comprises, inter-alia of the following parameters: a) Directors bring an independent judgement on the Board discussion utilizing his knowledge and experience especially on issues related to strategy, operational performance and risk management b) Directors demonstrate awareness and concerns about the norms relating to Corporate Governance, disclosure and legal compliance. c) Directors contributes new ideas / insights on the business issues raised by the Management. d) Directors anticipate and facilitate deliberations on new issues that Management and the Board should consider. e) The Board / Committee meeting are conducted in a manner which facilitate open discussion and robust debate on all key items on the agenda. f) The Board receives adequate and timely information to enable discussion / decision making during Board Meetings. g) The Board addresses interest of all stakeholders of the Company. h) The Committee is delivering on the defined objectives. i) The Committee has the right composition to deliver its objectives. The Performance evaluation of Chairman, Directors, Board and Committee was undertaken by the Nomination and Remuneration Committee for the year under review and the results were reported to the Board of Directors ANNUAL RETURN: The Extract of Annual Return is annexed to the Directors' Report. FAMILIARIZATION PROGRAM AND INDEPENDENT DIRECTORS: The Company has practice of conducting familiarization program of the independent directors as detailed in the Corporate Governance Report which forms part of the Annual Report. WHISTLE BLOWER POLICY: The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical conduct. The Company has a Whistle Blower policy under which employees are free to report violations of the applicable laws and regulations and the code of conduct. The Whistle Blower Policy is available on the website of the Company at www.universal-arts.in NOMINATION AND REMUNERATION COMMITTEE: The Board of Directors of the Company has constituted Nomination and Remuneration Committee consisting of the following Members: a) Mr. SatishShidhaye b) Mr. SandeepPoddar The Board of Directors of the Company has approved the Nomination and Remuneration Policy which inter-alia contain the appointment criteria, qualifications, positive attributes and independence of Directors, removal, retirement and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel of the Company. The said policy is available on the website of the Companywww.universal-arts.in DIRECTORS' RESPONSIBILITY STATEMENT: To the best of their knowledge and belief and according to the information and explanation obtained from them, your Directors make the following statements in terms of section 134(3) (c) of the Companies Act, 2013 a) In the preparation of annual account, the applicable accounting standard have been followed along with proper explanation relating to material departures. b) Accounting Policies are listed in Notes to the financial statement have been selected and applied consistently. Reasonable and prudent judgment as well as estimates have been made so far as to give a true and fair view of the state of affairs of the Company as on 31st March, 2015 and of the Profit of the Company for that period. c) Proper and sufficient care for maintenance of adequate accounting records has been taken inaccordance with the provisions of the Companies Act, 2013 so as to safeguard the assets of the Company and to detect and prevent fraud and other irregularities. d) The Annual Accounts have been prepared on a going concern basis e) Internal financial controls system is in place and the same has been followed by the Company. Further such Internal Financial controls are adequate and were operating effectively. f) Proper system to ensure Compliance with the provisions of all applicable law and such systems were adequate and operating effectively. PERSONNEL: There were no employees covered u/s 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 ENERGY, TECHOLOGY AND FOREIGN EXCHANGE: The Company is not strictly engaged in the manufacturing activity; as such particulars relating to conservation of energy and technology absorption are not applicable. However, in the editing facilities, offices etc adequate measures are being taken to conserve energy as far as possible. As far as foreign exchange earnings and outgo is concerned, the Company has neither earned nor used any foreign exchange during the period under review. AUDITORS: M/s SekhriKanodiaS Associates, Chartered Accountants, retires at the conclusion of the forthcoming Annual General Meeting and have expressed their willingness to continue as Statutory Auditor for the Financial Year 2015-16. The relevant certificate to the effect that their appointment, if made, will be in pursuant to section 141 of the Companies Act, 2013 has been received. The resolution for their re-appointment is being submitted to the Annual General Meeting. AUDITORS' REPORT: The Comments in the Auditors Report are self explanatory and suitably explained in the Notes to the Accounts. SECRETARIAL AUDIT: Pursuant to section 204 of the Companies Act, 2013 the Secretarial Auditors M/s GIRISH MURARKA & CO., Company Secretaries, has issued Secretarial Audit Report for the nine months period starting from 01/07/2014 and ending on 31/03/2015 is annexed to Directors' Report. The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark or disclaimer. PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES: The Details of Investment made and loan advanced by the Company have been given in note no. 6, and 7 to the Financial Statement. The Company has not given any guarantee pursuant to the provisions of section 186 of Companies Act, 2013 INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: The Company has an internal control system commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with the operating system, accounting policies and procedures of the Company. These are routinely tested and certified by Statutory as well as Internal Auditors. The Significant audit observations and the follow up action are reported to the Audit Committee. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Pursuant to section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with rule 14, the internal committee constituted under the said Act has confirmed that no complaint / case has been filed / pending with the Company during the year. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on arm's length,basis and were in ordinary course of business. There are no materially significant related party transaction made by the Company with Promoter, Director, Key Managerial Personnel or other designated person which have a potential conflict with the interest of the Company at large. CORPORATE GOVERNANCE: A separate section on Corporate Governance is included in the Annual Report and the certificate from M/s GIRISH MURARKA & CO., practicing Company Secretaries, Mumbai, and Company's Secretarial Auditors confirming the compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchange is annexed thereto. HUMAN RESOURCES DEVELOPMENT: Many initiatives have been taken to support business through organizational efficiently, process change support and various employee engagement program which has helped the Organization to achieve higher productivity level. A significant efforts has also been undertaken to develop leadership as well as technical / functional capacities in order to meet future talent requirement. The Company's HR process such as hiring and on-boarding, fair transparent on line performance evaluation and talent management process, state-of-the-art workmen development process and market assigned policies have been seen as benchmark practice in the Industry. The Employees are encouraged to express their views and are empowered to work independently. The Employees are given the opportunity to learn through various s^'oi1 project which make them look at initiatives from different perspectives and thus provide them with the platform to become result oriented. The Management of the Company enjoy cordial relation with its employees at all levels. The Board of Directors wish to place its highest appreciation for the contribution made by all the employees in achieving growth of the Company ENHANCING SHAREHOLDERS VALUE: Your Company believes that its members are among its most important stakeholders. Accordingly your Company's operations are committed to the pursuit of achieving high level of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive assets and resource base and nurturing overall corporate reputation CASH FLOW STATEMENT: In conformity with the clause 32 of the Listing Agreement, the Cash Flow Statement for the nine months period ended 31st March, 2015 annexed hereto. ACKNOWLEDGEMENT: Your Directors wish to place on record their appreciation and acknowledge with gratitude the support and cooperation extended by the- Bankers, Shareholders, Registrar & Share Transfer Agents, the Artists and Technicians associated with the Company's program, media and channels whose continued support has been a source of strength to the Company. Your Directors also place on record their appreciation for the dedicated and sincere services rendered by the employees of the Company. For and on behalf of the Board Sd/-Manish G. Shah CHAIRMAN Place: Mumbai Date: 30th May, 2015 |