DIRECTORS' REPORT DEAR MEMBERS, Your Directors are pleased to present the 10th Annual Report together with the Company's audited accounts for the financial year ended March 31, 2015. ACQUISITION OF CONTROLLING STAKE BY INDEPENDENT Media TRusT Consequent to acquisition of control of the Company by Independent Media Trust (IMT), of which Reliance Industries Limited is the sole beneficiary, IMT had made open offer to the shareholders of the Company in terms of provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and the same was completed during the year. RESULTS oF opERATioNS AND THE STATE OF COMPANY'S AFFAIRS During the year under review, the Company recorded an operating turnover of Rs. 605.6 Crores (previous year Rs. 516.1 Crores). The consolidated revenue from operation of the Company was Rs. 2318.4 Crores as against Rs. 1968.1 Crores in previous year and Profit Before Tax (before exceptional and prior period items) on a consolidated basis was Rs. 216.0 Crores, in previous year Rs. 126.8 Crores. DIVIDEND In order to conserve the resources, the Board of Directors have not recommended any dividend for the year under review. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. DEPOSITS The Company has discontinued accepting fresh fixed deposits or renewing any deposits w.e.f April 1, 2014. Further, the Company has repaid the entire fixed deposits during the year, maturing upto and after March 31, 2015. The Company has been regular in payment of interest and repayment of fixed deposits. As on March 31, 2015 deposits aggregating to Rs. 3.95 Crores remains unclaimed. The Company has sent fresh cheques to these deposit holders. EMPLOYEES STOCK OPTION SCHEMES The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Schemes of the Company in accordance with the applicable Regulations prescribed by the Securities and Exchange Board of India (SEBI). The Company has implemented the Employees' Stock Option Schemes in accordance with the applicable SEBI Regulations and the resolutions passed by the Members of the Company. The Certificate(s) of the Statutory Auditors confirming the same shall be placed before the Annual General Meeting for inspection by the members. During the year, there is no change in the Employees' Stock Option Schemes of the Company. The issue of equity shares pursuant to exercise of options does not affect the Statement of Profit and Loss of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable. Voting rights on the shares issued to employees under the Employees' Stock Option Schemes are either exercised by them directly or through their appointed proxy. The applicable disclosures with regard to the Employees' Stock Option Schemes as stipulated under the Companies Act, 2013 as on March 31, 2015 are provided in Annexure I to this report and the disclosures under the Securities and Exchange Board of India ( Share based Employee Benefits) Regulations, 2014 are disclosed on the website of the Company at www.network18online.com and also provided in the Notes forming part of the Financial Statements. SHARE CAPITAL The Company has not issued any equity shares with differential voting rights as to dividend, voting or otherwise. The Company has also not issued any shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees Stock Option Schemes (ESOS) referred to in this Report. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. A detailed Corporate Governance Report of the Company in pursuance of Clause 49 of the Listing Agreement forms part of the Annual Report of the Company. The requisite Certificate from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to the Corporate Governance Report. CREDIT RATING ICRA Limited - the Credit Rating Agency, a subsidiary of Moody's has assigned following Credit Ratings to the credit DIRECTORS Mr. Rohit Bansal was appointed as an Additional Director w.e.f. January 14, 2015 and he shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing the candidature of Mr. Rohit Bansal for appointment as a Nonexecutive Director, liable to retire by rotation. Mr. Adil Zainulbhai was appointed as an Additional Director (Independent Director) w.e.f. May 15, 2015 and he shall hold office upto the date of ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing the candidature of Mr. Adil Zainulbhai for appointment as a Non-executive Independent Director, not liable to retire by rotation for a term upto 5 (five) consecutive years upto May 14, 2020. The present term of Mr. Manoj Mohanka as an Independent Director of the Company will expire at the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing the candidature of Mr. Manoj Mohanka for the office of Independent Director of the Company, not liable to retire by rotation, for a term of 3 (three) consecutive years from the date of ensuing Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. In accordance with the Companies Act, 2013 and the Articles of Association of the Company, Mr. Raghav Bahl retires by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment. Your Board has recommended his re-appointment. Mr. Hari S. Bhartia, Independent Director of the Company, resigned from the Directorship of the Company with effect from June 30, 2015. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as a Director of the Company. The Company organizes various programs and presentations for the Board of Directors in order to familiarize them with their roles, rights, responsibilities in the Company, nature of the Industry in which it operates, Business model of the Company and related matters. Details of such program is available on the Company's website www.network18online.com and may be accessed at <http://> www.network18online.com/reportstv18/Policies/Familiarisation- Programmes-for-Independent -Directors-TV18.pdf. The following policies of the Company are annexed herewith as Annexure IIA and Annexure IIB: a) Policy for selection of Directors and determining Directors Independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. The Company does not have any Managing Director or Whole-time Director. The Company has formulated a policy on performance evaluation of the Independent Directors, Board and its Committees and other individual Directors which shall be based on inter alia criteria like attendance, effective participation, domain knowledge, access to management outside Board Meetings and compliance with the Code of Conduct, vision and strategy and benchmark to global peers. On the basis of policy for performance evaluation of Independent Directors, Board, Committees and other individual directors, a process of evaluation was carried out. The performance of the Board, individual directors and Board Committees were found to be satisfactory. KEY MANAGERIAL PERSONNEL The Board of Directors of the Company has appointed Mr. Hariharan Mahadevan as the Chief Financial Officer of the Company with effect from November 27, 2014. Further, the Board of Directors of the Company appointed Ms. Kshipra Jatana as the Manager of the Company for a period of five years with effect from November 27, 2014. During the year under review, Mr. Hitesh Kumar Jain, DGM - Corporate Affairs & Company Secretary of the Company ceased to be the Company Secretary of the Company and Mr. Sachin Gupta was appointed as the Company Secretary & Compliance Officer of the Company with effect from October 16, 2014. Further, Mr. Deepak Gupta was appointed as Company Secretary and Compliance Officer of the Company, with effect from July 22, 2015, consequent to resignation of Mr. Sachin Gupta. SUBSIDIARIES / JOINT VENTURES/ ASSOCIATE COMPANIES The development in business operations /performance of the major subsidiaries / joint ventures / associate companies, form part of the Management's Discussion and Analysis Report. During the year under review, IBN Lokmat News Private Limited, Indiacast Media Distribution Private Limited, Indiacast UTV Media Distribution Private Limited, Indiacast UK Limited, Indiacast US Limited, Viacom18 Media Private Limited, Roptonal Limited, Viacom18 US Inc. and Viacom18 Media (UK) Limited have become subsidiaries of the Company. The performance and financial information of the subsidiary companies / joint ventures / associate companies is disclosed in the Consolidated Financial Statement. CONSOLIDATED FINANCIAL STATEMENT In accordance with the provisions of the Companies Act, 2013, Clause 32 of the Listing Agreement and Accounting Standard AS-21 on Consolidated Financial Statement read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. TRANSFER OFAMOUNTS TO INVESTORS EDUCATION AND PROTECTION FUND The amount of fixed deposits and other amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company, within the stipulated time, to the Investors Education and Protection Fund. Further, the Company has uploaded the details of such unpaid and unclaimed amounts on it's website and also on the website of the Ministry of Corporate Affairs. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURT No significant and/or material orders were passed by any Regulators/Courts/Tribunals which impact the going concern status of the Company or its future operations. NUMBER OF MEETINGS OF THE BOARD During the financial year ended on March 31, 2015, 7 (seven) Board Meetings were held and the maximum time gap between any two Board meetings was less than 120 days. Further, details of the meetings of the Board and its Committees are given in the Corporate Governance Report, forming part of the Annual Report. COMPOSITION OF AUDIT COMMITTEE The Audit Committee of the Company comprises of Mr. Manoj Mohanka, Chairman, Mr. Raghav Bahl and Mr. Adil Zainulbhai. Consequent upon resignation of Mr. Hari S. Bhartia from the directorship of the Company, Mr. Adil Zainulbhai was appointed as a member of the Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that: i) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable Accounting Standards read with the requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same; ii) the Directors 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 as at March 31, 2015 and of the profit and loss of the Company for the year ended on that date; iii) the Directors have taken proper and sufficient care 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 iv) the Directors have prepared the annual accounts of the Company for the financial year ended March 31, 2015 on a 'going concern' basis; v) the Directors have laid down internal financial control to be followed by the Company and that such internal financial control are adequate and were operating effectively; and vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. risk assessment/ management The Company has formulated and adopted a Risk Management Policy. The Board of Directors of the Company is responsible for the direction and establishment of internal control to mitigate material business risks. The policy is framed to identify the element of risk for achieving its business objective and to provide reasonable assurance that all the material risks, misstatements, frauds or violation of laws and regulations will be mitigated. The Company has constituted a Risk Management Committee. The Committee shall inter alia oversee, evaluate and implement the Risk Assessment Policy and Manual of the Company and suggest effective measures to counter or mitigate the risks. corporate social responsibility The Company has constituted a Corporate Social Responsibility (CSR) Committee in compliance with the provisions of the Companies Act, 2013. The Committee's prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the objective of 'Corporate Social Responsibility Policy'. The CSR Policy of the Company is available on its website at www.network18online.com < and may be accessed at <http://www>. network18online.com/reportstv18/Policies/Corporate_Social_ Responsibility Policy.pdf In terms of CSR Policy, the focus areas of engagement are as under: • Addressing identified needs of the unprivileged through improving livelihood, alleviating poverty, promoting education, empowerment through vocational skills and promoting health and well-being. • Preserve, protect and promote art, culture and heritage. • Environmental sustainability, ecological balance and protection of flora and fauna. • The Company would also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013. The applicable disclosure as stipulated under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided in Annexure III to this Report. vigil mechanism The Company promotes ethical behaviour in all its business activities. Towards this, the Company has adopted a policy on Vigil Mechanism and Whistle Blower. The Company has constituted an Ethics & Compliance Task Force to process and investigate a protected disclosure made under the policy. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice or victimization. The Audit Committee oversees the Vigil Mechanism. The policy on vigil mechanism and whistle blower is available on Company's website at www.network18online com and may be accessed at reportstv18/Policies/Policy%20on%20Whistle%20Blower%20 %20-%20Vigil%20Mechanism.pdf related party transactions All the related party transactions were entered on arms' length basis and were in the ordinary course of business. Further, the transactions with related parties were in compliance with applicable provisions of the Companies Act, 2013 and the Listing Agreement. All Related Party Transactions are presented to the Audit Committee. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis. During the year, the Company had not entered into any contract/ arrangement/ transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The policy on dealing with Related Party Transaction and policy for determining Material Subsidiaries are posted on the Company's website at www.net work 18online .com and may be accessed at http://www.network18online.com/reportstv18/ Policies/ Materiality _partytransactions _policy_TV18. pdf and for_determining_ Material_ Subsidiaries. pdf The details of the transactions with Related Parties are provided in Note No. 31 to the standalone financial statement. INTERNAL FINANCIAL CONTROL The Company has adequate system of internal financial control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the Company also checks and verifies the internal financial control and monitors them. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place Prevention of Sexual Harassment (POSH) Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year four complaints were received under the Policy. All the complaints were resolved and four employees who were found guilty were terminated from employment. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Details of Loans given, Investments made, Guarantees given and Securities provided are given in Note Nos. 11, 12 and 16 to the standalone financial statement. AUDITOR & AUDITOR'S REPORT Deloitte Haskins & Sells, LLP, Chartered Accountants, were appointed as Auditors of the Company for a period of three years at the 9th Annual General Meeting held on September 30, 2014 and the appointment was subject to ratification at each Annual General Meeting. The Company has received confirmation from them to the effect that their ratification of appointment is within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for holding the office of the Auditors. Accordingly, the Board recommends ratification of their appointment as Statutory Auditors of the Company by the members. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. COST AUDITOR AND COST AUDIT REPORT The Board had appointed Pramod Chauhan & Associates, Cost Accountants (Regd. No. 000436) as the Cost Auditors of the Company for the financial year 2014-15 for conducting the audit of the Cost Records of the Company. Further, the Cost Auditor of the Company is required to forward the Cost Audit Report to the Company by September 27, 2015. The Company is required to submit the same with Central Government within 30 days of receipt of Cost Audit Report from the Cost Auditor. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT The Board had appointed Chandrasekaran Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015, in the prescribed format is attached herewith as Annexure IV to this report. The Secretarial Auditors in their report had commented that as required under second proviso to Section 149(1) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company had not appointed woman director. In this regard it may be noted that the Company has identified a candidate for being appointed as a woman director on its Board and has made an application to Ministry of Information and Broadcasting which is pending for approval. PARTICULARS OF EMPLOYEE AND MANAGERIAL REMUNERATION The information required in terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5 (1), (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed with this report and marked as Annexure VA and Annexure VB. EXTRACT OF ANNUAL RETURN Extract of the Annual Return in the prescribed format is annexed with this report and marked as Annexure VI. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the following information is provided: a) Conservation of Energy The Company is not an energy intensive unit, hence alternate source of energy may not be feasible. However, regular efforts are made to conserve the energy. The Company conducted an energy audit and suggested means to reduce energy consumption. Further, use of low energy consuming LED lightings are being encouraged. b) Technology Absorption The Company is conscious of implementation of latest technologies in key working areas. Technology is ever-changing and employees of the Company are made aware of the latest working techniques and technologies through workshops, group e-mails, and discussion sessions for optimum utilization of available resources and to improve operational efficiency. Your Company is not engaged in manufacturing activities, therefore, certain disclosures on technology absorption and conservation of energy etc. are not applicable. There is no expenditure on Research and Development. ACKNOWLEDGMENT Your Directors wish to place on record their appreciation for the continuous support extended by all the employees, shareholders, customers, Joint venture partners, investors, government authorities and bankers for their continued support and faith reposed in the Company. For and on behalf of the Board of directors Adil Zainulbhai Chairman of the Board Rohit Bansal Director Place: Mumbai Date: July 22, 2015 |