DIRECTORS' REPORT Your Directors take pleasure in presenting the 21st Annual Report together with the audited statement of accounts of the Company for the year ended March 31, 2015 B) RESULTS OF OPERATIONS For the year ended March 31, 2015, the Company earned total revenue of Rs. 20,969.22 Lacs an increase of 60% over the previous year's Rs. 13,153.69 Lacs. As per the consolidated accounts, the total revenues have decreased by 15% from Rs. 40,746.01 Lacs to Rs. 34,648.77 Lacs during the year under review. The Company earned net profit of Rs. 1,227.25 Lacs during the year under review as compared to net profit of Rs. 1,002.09 Lacs. A detailed discussion on the business performance is presented in the Management Discussion and Analysis Section of the Annual Report. APPROPRIATIONS: DIVIDEND The Directors are pleased to recommend a final dividend of Re. 0.60 per share (30% on a par value of Rs. 2 per share) for the approval of the Members. The final dividend, if declared as above, would involve an outflow of Rs. 391.26 Lacs towards the dividend (previous year Rs. 260.84 Lac) and Rs. 79.65 Lacs towards dividend tax (previous year Rs. 44.33 Lacs), resulting in a total outflow of Rs. 470.91 Lacs. transfer to reserves We propose to transfer Rs. 122.72 Lacs to the General Reserve out of the amount available for appropriations. An amount of Rs. 21,775.90 Lacs is proposed to be retained in the profit and loss account. public deposits: During the year under review, your Company has not accepted any Deposits from the public falling within the ambit of Section 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules, 2014. Management discussion and analysis: A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management Discussion and Analysis, which forms part of the Annual Report 1. balaji motion pictures limited (bmpl): Balaji Motion Pictures Limited (BMPL), a wholly owned subsidiary of BTL handling its movies business, produced and released 3 movies during FY2015. These were: Kuku Mathur Ki Jhand Ho Gai, Main Tera Hero and Ek Villain. Our best revenue-generating asset has been Ek Villain which registered a box office collection of over Rs. 100 Crores. During the year, we remained in a good space with right marketing, branding and distribution power. While BMPL showcased our strengths in unparalleled cinema and our strong story-telling, the ALT segment displayed our capabilities in edgy and irreverently young movies. Moving forward, we are working on becoming a trend-setting studio and getting our slate right to release at least one movie each quarter. What other studio houses achieve with big stars, we plan to achieve with big ideas. We are de-risking our business by getting into a profit sharing model with directors and actors and also distributing our own movies. The Company aims to double its number of releases to at least 6-8 movies a year and build on its string of successes. Further, we are focusing on franchisee building for movies such as Kya Kool Hain Hum and Ragini MMS. It aims to gain immense credibility as an established production house and aspire to win audiences across age groups. Our future movie slate is strong with an exciting pipeline. We aim to have a total of 8-10 movie releases over FY2016 and FY2017. These are movies with concepts as diverse as a cricket biopic, a youth erotic franchise, a movie on one of the novels of Chetan Bhagat, and one being with Mohit Suri as a first time producer. In the immediate future, we are co-producing Udta Punjab with Phantom Films, starring Shahid Kapoor and Kareena Kapoor. With Emraan Hashmi, we are creating a biopic on cricketer Azharuddin. We are also looking to leverage our franchise value by exploring sequels of our earlier movies - Kya Kool Hain Hum. We are also producing a sequel of an earlier comedy blockbuster Grand Masti. We have joined hands with Imtiaz Ali for an iconic love story with two newcomers. In addition to this, we are also producing a superhero franchise. 2. bolt media limited (bolt): Having completed two full years of operation, Bolt Media, a wholly owned subsidiary of BTL, is well entrenched in the entertainment fraternity. It has established itself credibly, created a niche space in a competitive environment and is getting acknowledged in the marketplace for its quality programming. Brands and Corporate Houses are gradually recognising Bolt Media as a strong content provider to reckon with. During the year, Bolt Media aired Ye Jawaani Tara Riri on Channel V, Dharmakshetra and Rakht on EPIC channel. With the first season of Love by Chance getting well appreciated and gaining a 10-week extension, we are looking at its Season 2. We are poised to move ahead with financial stability and are looking to enhance our top line in FY2017. Two TV shows created in FY2014 were aired by broadcasters during the year under review. One of these was a 10-series epic documentary Rakht, while Dharmakshetra was a 26-series neo-mythological courtroom drama. Both the series were broadcast on EPIC. Besides short-format shows, we also created TV series aimed at youth-based entertainment. Our existing TV shows - Ye Jawaani Tara Riri, a 78-part series for a bi-weekly show on Channel V, and Love by Chance, an episodic romcom on Bindaas TV, have been well received by our audiences. Among its other key achievements during the year, we created a special 100-part web series "Kelloggs Wale Guptaji ki Family" Aired in March 2015, the show garnered rave reviews hitting 5 million views in a month. With reputed chef Ajay Chopra, the show displays recipes where Kelloggs is being used as a key ingredient using hypothetical situations. In addition to this, a two-part documentary series was created for the National Geographic channel based on the 1990s. Besides archival footage on the 1990s, eminent personalities such as P. Chidambaram, Ram Gopal Verma, Rajdeep Sardesai, Diya Mirza, Pankaj Kapoor, Shekhar Suman, Uday Shankar, among others, provided a retrospective landmark, social and political view on the said decade. We are also in the process of producing TV commercials and web-based advertisements for Corporates. Our digital and print campaign on Sonata Watches included creating pictures for PoP, working on the catalogue/brochure for their festive line of merchandise with Karan Kundra and Kritika Kamra. 3. marinating films private limited (mfpl): During the year, BTL bought a controlling in stake of 51% in Mumbai-based Marinating Films Private Limited. Marinating Films owns the concept, format and all proprietary rights and intellectual property rights in Box Cricket League (BCL), The Indian Telly Calender (ITC) and Television Style Awards (TSA) and organizes these on a yearly basis. The Box Cricket League is an interesting IP with 8 teams owned by different celebrities, which includes an interesting mix of people including RJs, sports commentators, and some ex-players. The format has both male and female stars playing on-field together, catapulting the drama and entertainment to new heights. 4. CHHAYABANI BALAjl ENTERTAINMENT PRIVATE LIMITED (CBEPL): We set up a new subsidiary during the year - Chhayabani Balaji Entertainment Private Limited (CBEPL), in partnership with Kolkata-based Chhayabani Private Limited. The collaboration with the local operator aims to promote the best creative talent by exploring new formats of television content, presentation and also creating new creative opportunities from both the industries. Chhayabani has a glorious past of producing extremely notable films from equally notable directors in the past who were award winners and also held rights to at least 250 Bengali films. EVENT MEDIA LLP: Incorporated on October 1, 2014, Events Media LLP 5. is a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008. Balaji Telefilms Limited (BTL) and Select Media Holdings Private Limited are the dual partners in the event management firm. During the year, BTL and Events Media LLP joined hands to produce the Star Box Office India Awards 2014. Event Media will be engaged in organising and/or managing all kinds of events, including events relating to film and TV industry, including creation of new intellectual property or value addition. This may include events related to Films & TV Awards, Promotional Events and other events related to the Film & TV industry. Events Media LLP is a sunrise venture which enables BTL to make a foray into an allied segment of Event Management. It also facilitates BTL in creating a new IP in the promising sector and monetising a growing market with low-risk culpability. AUDITED FINANCIAL STATEMENTS OF THE SUBSIDIARIES The Audited Financial Statements, the Auditors Report thereon and the Board Report for the year ended March 31, 2015 for the Subsidiary Companies are annexed. Further a statement containing the salient features of our subsidiaries in the prescribed format AOC-1 is appended as Annexure I to the Board Report. MATERIAL EVENTS AFTER THE BALANCE SHEET DATE: The Company is in the process of incorporation a wholly-owned Subsidiary with the proposed name Alt Digital Media Entertainment Limited. DIRECTORS: The term of appointment of Mrs. Shobha Kapoor as Managing Director of the Company, will expire on November 9, 2015. The Directors recommend her re-appointment as Managing Director of the Company for a further period of three years pursuant to the provisions of Section 196 and 197 of Companies Act, 2013 read with Schedule V of Companies Act, 2013 w.e.f. November 10, 2015. The term of appointment of Ms. Ekta Kapoor as Joint Managing Director of the Company, will expire on November 9, 2015. The Directors recommend her re-appointment as Joint Managing Director of the Company for a further period of three years pursuant to the provisions of Section 196 and 197 of Companies Act, 2013 read with Schedule V of Companies Act, 2013 w.e.f. November 10, 2015. Mr. V.B. Dalal was appointed on the Board as Additional (Independent) Director of the Company w.e.f. August 12, 2014. As per the provisions of Section 161 of the Companies Act, 2013 he will hold office upto the date of the ensuing Annual General Meeting of the Company. Directors recommend his appointment as Independent Director for a term of five years at the ensuing Annual General Meeting pursuant to Section 149 (10) of the Companies Act, 2013 w.e.f. August 31, 2015.The Company has received notice under Section 160 of the Companies Act, 2013, together with requisite deposit proposing appointment of Mr. V.B. Dalal as Independent Director of the Company. Mr. Arun Kumar Purwar was appointed on the Board as Additional (Independent) Director of the Company w.e.f. May 20, 2015. As per the provisions of Section 161 of the Companies Act, 2013 he will hold office upto the date of the ensuing Annual General Meeting of the Company. Directors recommend his appointment as Independent Director for a term of five years at the ensuing Annual General Meeting pursuant to Section 149 (10) of the Companies Act, 2013 w.e.f. August 31, 2015.The Company has received notice under Section 160 of the Companies Act, 2013, together with requisite deposit proposing appointment of Mr. Arun Kumar Purwar as Independent Director of the Company. In accordance with the Articles of Association of the Company, Mr. Tusshar Kapoor, Director retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for reappointment. brief profile of these Directors containing the details of their age, qualifications, expertise, other Directorships, Committee Memberships etc. has been given in the Statement attached to the Notice for the ensuing Annual General Meeting. DECLARATION BY INDEPENDENT DIRECTORS: The Company has received necessary declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. AUDITORS: STATUTORY AUDIT: M/s Deloitte Haskins & Sells LLP, Chartered Accountants and M/s Snehal & Associates, Chartered Accountants, Joint Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. M/s Snehal & Associates, Chartered Accountants, do not wish to continue as Statutory Auditors and have furnished their No Objection Letter in this regard. Further, M/s Deloitte Haskins & Sells LLP, Chartered Accountants have furnished a certificate to the effect that their reappointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for reappointment. As required under Clause 41 of the Listing Agreement, M/s Deloitte Haskins & Sells LLP, Chartered Accountants have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. cost audit: In accordance with Companies (Cost Records and Audit) Rules, 2014 and Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable to Balaji Telefilms Limited. secretarial audit: Pursuant to the provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s K.C. Nevatia & Associates as Secretarial Auditors of the Company. The Secretarial Audit Report is appended as Annexure II to this report. director's explanation to qualification in secretarial audit report: qualification: The provisions of Section 135 of the Companies Act, 2013 are applicable to the Company and accordingly a sum of Rs. 29.94 Lacs being 2% of the average net profits of the Company made during the three immediately preceding financial years were required to be spent by the Company during the financial year 2014-15 as per its Corporate Social Responsibility Policy. However, the Company has spent an aggregate amount of Rs. 21.33 Lacs on its Corporate Social Responsibility activities during the said financial year. board explanation: The shortfall in the expenditure during the year 2014-15, was due to lack of suitable projects within the Company's Corporate Social Responsibility Policy. The Company will spend the requisite amount under Section 135 of the Companies Act 2013, in the financial year 2015-16. committees of the board: Currently, the Board has the following Committees: a) Audit Committee. b) Nomination and Remuneration Committee. c) Stakeholder Relationship Committee. d) Risk Management Committee. e) Internal Complaints Committee. f) Corporate Social Responsibility Committee. A detailed note on the Board and its Committees is provided under the Corporate Governance Section in this Annual Report. audit committee: The current composition of Audit Committee is as follows: Chairman : Mr. D. G. Rajan - Independent Director Members : Mr. Jeetendra Kapoor - Non-Executive Director Secretary Mr. Pradeep Sarda - Independent Director Mr. D.K. Vasal - Independent Director Mr. V.B. Dalal - Independent Director Mrs. Simmi Singh Bisht All the recommendations made by the Audit Committee during the year were accepted by the Board. nomination and remuneration committee: The current composition of Nomination and Remuneration Committee is as follows: Chairman : Mr. Ashutosh Khanna- Independent Director Members : Mr. Jeetendra Kapoor - Non -Executive Director Mr. Pradeep Sarda - Independent Director Mr. D.K. Vasal - Independent Director stakeholder relationship committee: The current composition of Stakeholder Relationship Committee is as follows: Chairman : Mr. Jeetendra Kapoor - Non- Executive Director Members : Mrs. Shobha Kapoor - Executive Director Ms. Ekta Kapoor - Executive Director Mr. D.K. Vasal - Independent Director Risk Management Committee: Chairperson : Mrs. Shobha Kapoor- Executive Director Members : Mr. Jeetendra Kapoor- Non Executive Director Mr. D.G. Rajan- Independent Director Mr. Ashutosh Khanna - Independent Director Mr. V.B. Dalal - Independent Director Internal Complaints Committee: The current composition of Internal Complaints is as follows: Chairperson : Mrs. Shobha Kapoor- Executive Director Members : Mr. Sameer Nair- Group CEO Mrs. Coralie Ansari- Group Head - HR Mrs. Simmi Singh Bisht- Company Secretary Mr. Ayan Roy Chowdhury- General Counsel - Legal Corpora te Social Responsibility Committee: The composition of the Corporate Social Responsibility Committee is as follows: Chairman : Mr. Jeetendra Kapoor- Non Executive Director. Members Mrs. Shobha Kapoor- Executive Director. Mr. D.G. Rajan- Independent Director. Mr. Ashutosh Khanna - Independent Director. extract of annual return: The details forming part of the extract of Annual Return in Form MGT-9 is appended as Annexure III to this report. internal financial control: The Board has adopted the policies and procedures for ensuring the orderly and efficient control of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. consolidated financial statements: In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2014-15. corporate social responsibility committee: The Corporate Social Responsibility Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The Composition of Corporate Social Responsibility Committee is as follows: Chairman : Mr. Jeetendra Kapoor- Non-Executive Director. Members : Mrs. Shobha Kapoor- Executive Director. Mr. D.G. Rajan- Independent Director. Mr. Ashutosh Khanna- Independent Director. The Annual Report on CSR activities is annexed herewith as Annexure IV. vigil mechanism/whistle blower policy: The Company promotes ethical behaviour in all its business activities and has put in place a mechanism of reporting illegal or unethical behaviour. The Company has a whistle blower policy wherein the employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the management to the workgroups. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. The Whistle Blower Policy of the Company is also posted on the website of the Company www.balajitelefilms.com and is appended as Annexure V to this Report. CONSERVATION OF ENERGY: ENERGY CONSERVATION MEASURES TAKEN BY THE COMPANY Our operations are not energy intensive. However, significant measures are taken to reduce energy consumption by using energy-efficient computers and by purchasing energy-efficient equipment. We purchase computers, laptops, air conditioners etc. that meet environmental standards, wherever possible, and regularly upgrade old equipment with more energy-efficient equipment. Currently, we use Compact Fluorescent Lamp (CFL) fixtures to reduce the power consumption in the illumination system. technology absorption: The Company's research and development initiative mainly consists of ideation of new subjects for our content production business, which are used in the creation of new storyline and tracks. The expenses incurred on such initiatives are not practically quantifiable. The Company is an integrated player in the entertainment industry and our business is such that there is limited scope for new technology absorption, adaptation and innovation. However, the Company uses the latest technology, wherever possible to deliver superior production value, as a regular process. foreign exchange earnings and outgo: The foreign exchange earnings is Rs. 35.61 Lacs (Previous Year: Rs.7.33 Lacs) and the foreign exchange outgo is Rs. 6.45 Lacs (Previous Year Rs. Nil) as given in Point 23.9 & 23.10 in notes forming part of the financial statements. fixed deposits: During the year under review the Company has not accepted any fixed deposit and as such, no amount of principal or interest was outstanding as on the balance sheet date. disclosure under section 197(12) and rule 5(1) of the companies (appointment and remuneration of managerial personnel) rules, 2014 The requisite details containing the names and other particulars of employees in accordance with the provisions of Section 197 (12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure VI (a) to this Report. disclosure under rule 5(2) and rule 5(3) of the companies (appointment and remuneration of managerial personnel) rules, 2014 The requisite details relating to the remuneration of the specified employees covered under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure VI (b) to this Report. corporate governance: Your Company has been practicing the principles of good corporate governance over the years and it is a continuous and ongoing process. A detailed Report on Corporate Governance practices followed by your Company, in terms of Clause 49(X) of the Listing Agreement together with a Certificate from the Auditors confirming compliance with the conditions of Corporate Governance are provided separately in this Annual Report. Certificate of CEO / CFO, inter alia, confirming the correctness of the financial statements, adequacy of the internal measures and reporting of matters to the audit committee in terms of the clause 49 of the listing agreements with stock exchanges, is also attached as a part of this Annual Report. meetings of the board: During the year under review, Five (5) meetings of the Board of Directors were held the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between two Board Meetings was not more than One Hundred and Twenty Days. nomination & remuneration policy: The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection & appointment of Directors, Senior Management and their remuneration. The Nomination & Remuneration Policy is attached along with the Corporate Governance Report of the Company that forms part of the Annual Report. directors' responsibility statement: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013, a) In the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to any material departures. b) The Directors had 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 the year under review c) Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) The annual accounts for the financial year ended March 31, 2015 had been prepared on a 'going concern' basis. e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. related party transactions: All related party transactions of the Company are placed before the Audit Committee as also the Board for approval. Transactions with the related parties are disclosed in Note No. 23.8 in 'Notes forming part of the financial statements' annexed to the Financial Statements of the year. particulars of contracts or arrangements made with related parties: Particulars of Contracts or Arrangements made with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure VII to the Board's Report. board evaluation: Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. Schedule IV of Companies Act, 2013 mandates that annual performance evaluation of Directors should be carried out by Independent Directors and annual performance evaluation of Independent Directors should be carried out by other Directors to the exclusion of Director being evaluated. The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in this Annual Report. The Board approved the evaluation process results as collated by the Nomination & Remuneration Committee of the Company. risk management: Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee of the Company. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. sexual harassment: The Company has in place an Anti Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. During the year 2014-15, no sexual harassment complaint has been registered with the Company. particulars of loans, guarantees or investments: Details of loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. significant and material orders passed by the regulators or courts: There are no significant material orders passed by the Regulators/Courts which would impact the going status of the Company & its future operations. ACKNOWLEDGEMENTS Your Directors wish to acknowledge with gratitude and place on record their appreciation to all stakeholders - investors, customers, suppliers, business associates, banks, regulatory and governmental authorities for their cooperation, assistance and support. Your Directors also wish to thank their employees for their dedicated services. For & on behalf of the Board of Directors, Sd/- Jeetendra Kapoor Chairman PLACE : Mumbai, DATE : May 20, 2015 |