DIRECTOR'S REPORT Dear Members 1.The Directors take pleasure in presenting the 21st Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March 2015 2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS: There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of the Company. Based on internal financial control framework and compliance systems established in the Company, the work performed by statutory, internal and secretarial auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Company's internal financial controls were adequate and effective during the Financial Year 2014-15. 3. DIVIDEND: Equity Shares : Your Directors recommend final dividend at the rate of Rs .50 paise per equity share of Rupees 5 paid up for the Financial year ended 31st March 2015. Equity Dividend, upon approval by members if approved by Members of the Company at the ensuing Annual General Meeting, shall be payable on the outstanding equity capital as at the book closure date. The outflow on account of Equity Dividend and the tax on such dividend distribution, based on current paid-up capital of the Company would aggregate to Rs. 3.11 crores, resulting in a payout of 38 % of the profits of the Company on a stand-alone basis. Equity dividend payout for the year under review has been formulated in accordance with the Company's policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals. 4. RESULT OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS, CHANGE IN THE NATURE OF BUSINESS, IF ANY: • Your Company achieved revenue from operations Rs. 8389.20 lakhs as against Rs.8053.81 lakhs in the P.Y. The Total Expenditure for the period is Rs.7092.58 lakhs as against Rs.6464.75 lakhs in the Previous Year. • The performance of the Company is mainly affected by increased spent for launch of the Kannada News Channels and change in the depreciation policies adopted by the Company as per the new Companies Act 2013 and other administrative expenses. • Net Profit after tax stood at Rs.815.83 lakhs as compared to Net profit after tax Rs.1291.22 lakhs in the Previous Year. 5. BUSINESS OVERVIEW Your Company had a successful F.Y.2014-15 with good financial results, reflecting our focus on regional market consolidation and exploring various new platforms of revenue generation. Business Description Your Company, today, is an established Television Company in the Tamil broadcasting industry in South India. The network is presently runs 13 Channels and has 13 Channel licenses in various languages and genre and 3 more licenses are in the pipeline to launch 3 more channels. Your Company has own uplinking station and Exclusive Transponder facility. Your Company broadcasts the channels in whole of India, as well as parts of South East Asia, and the Middle East. Future Projects Your Company undertakes several production projects with the right mix of self produced and outsourced productions, to mitigate financial risk and obtain large revenues. With self-produced content, the Company gets complete right over the content, and can build its own intellectual property base. Your Company has an advantage of being a mass channel with its extensive line up of attractive programming to cater the entire family. The channels of the network reach a wide variety of audiences as it satisfies people of all ages, The Channel offers a right mix of movies, serials, debates, cultural, educational, cookery, handicrafts and religious programmes satisfying the needs of the entire community ranging from Urban to the rural audience. During the Current Year, Company plan to increase our offering in Telugu and Malayalam languages covering different genres. Healthy advertising revenues are expected from the new Channels. Your Company is exploring various other delivery platforms such as direct to hand held and various other OTT technologies. All these new initiatives are expected to augment the income substantially and help to post better results in this year. This will give the Company a place in the minds of people leading to numbers provided by recognized rating agencies and increase fund low from the operations. There are no significant changes in nature of business during the Financial Year 2014-15. 6. SHARE CAPITAL During the year under review , Company has not issued any shares or any other securities including DR/GDR/FCCB/ WARRANTS/BONDS, ESOP during the year. 7. PUBLIC DEPOSITS: During the year, the Company has neither invited nor accepted any deposits from the public or its employees. 8. CORPORATE GOVERNANCE & POLICIES Your Company has been constantly reassessing and benchmarking itself with well-established Corporate Governance practices besides strictly complying with the requirements of Clause 49 of the Listing Agreement and applicable provisions of Companies Act, 2013. A detailed report on Corporate Governance together with the Statutory Auditors' Certificate on compliance is attached to this Annual 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 are presented in separate sections forming part of the Annual Report. The Audit Committee of the Board has been vested with powers and functions relating to Risk Management which inter alia includes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization; and (c) formulation, implementation and monitoring of the risk management plan. In compliance with the requirements of section 178 of the Companies Act, 2013, the Nomination & remuneration Committee of your Board had fixed various criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limits, qualification / experience, areas of expertise and independence of individual. Your Company has also adopted a Remuneration Policy, salient features whereof is annexed to this report. Your Board has in accordance with the requirements of Companies Act, 2013 and Clause 49 of the Listing Agreement has adopted new policies and amended existing policies such as policy on Related Party Transaction, Code of Conduct for Directors and Senior Management, Corporate Social Responsibility Policy and Whistle Blower and Vigil Mechanism Policy. 9. LISTING AGREEMENT The Company has complied with all the requirements of the listing agreements of BSE & NSE except compliance to clause 49(II)(A)(1) of equity listing agreement as entered by the issuer Company (appointment of Woman Director) - as the issuer Company requires the prior permission and approval of the Ministry of Information and Broadcasting and Ministry of Home Affairs, and the approval was in process as at 31st March 2015. In terms of Clause 49 (II)(A)(1) of the Listing Agreement, the Company was needed to have at least one woman director on its board. Hence at the AGM held on 19-09-2014 in view of notice received from a member of the Company in terms of Section 160 of the Companies Act, 2013 had appointed Smt. Amudha Rajendran as a Director (Woman Director). As the appointment of Smt. Amudha Rajendran as a Director of the Company had happened due to the proposal obtained from a member of the Company in terms of the provisions of the Companies Act, 2013 the Company had not obtained the prior approval from the Ministry of Information and Broadcasting, New Delhi for appointing herself as a Director of the Company as required in terms of Clause 5.10 of the "Guidelines for uplinking of News and Current affairs TV Channels from India" and also in terms of Clause 5.11 of the "Policy Guidelines For Downlinking of Television Channels" As the prior permission and approval of the Ministry of Information and Broadcasting and Ministry of Home Affairs, New Delhi was not obtained by the Company, Smt. Amudha Rajendran had resigned from the office of the directorship of the Company with effect from 31-01-2015. Presently the Board of Directors of the Company had applied to Ministry of Information and Broadcasting, New Delhi for co-opting Smt.Vijayalakshmi Ravindran as an Additional Director (Woman Director) by the Board and accordingly had authorized its officials to make necessary steps in this connection. 10. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. 11. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Your Board comprises of 8 Directors including 4 Independent Directors. Independent Directors provide their declarations both at the time of appointment and annually confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Clause 49 of the Listing Agreement. During F.Y. 2014-15 your Board met 5 (Five) times details of which are available in Corporate Governance Report annexed to this report. Mr. M. Rajarathnam and Mr. M. Raghunathan Executive Directors are liable to retire by rotation at the ensuing Annual General Meeting and, being eligible , offers themselves for re-appointment. Your Board recommends their re-appointment. In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. Jeyaseelan , Chief Finance Officer and Mr. Joseph Cheriyan -Company Secretary & Compliance Officer of the Company were nominated as Key Managerial personnel. DIRECTORS SEEKING FOR RETIREMENT BY ROTATION Directors Shri. M. Raghunathan (Holding DIN 00662769) and Shri. M. Rajarathnam (Holding DIN 00839174), who retires by rotation and being eligible, offers themselves for re-appointment. BOARD MEETINGS The Board of Directors met 5 times during this financial year. The Board meetings were held on 28th April 2014, 13th May 2014, 29th July 2014, 27th October 2014 and 21st January 2015. BOARD EVALUATION In a separate meeting of Independent Directors held during the F.Y. 2014-15, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated. The details about the appointment, re-appointment, change in Designation, resignation of Directors (along with fact of resignation), Managing Directors, Whole Time Directors, KMP, Independent Directors is annexed to this report. 12. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS The Company has received necessary declaration from each Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). 13 .BOARD & AUDIT COMMITTEE The details regarding number of board meetings held during the financial year and composition of Audit Committee is furnished in the Corporate Governance Report. 14. AUDITORS AND AUDITORS' REPORT I. Statutory Auditors M/s. Pratapkaran Paul & Co., Chartered Accountants, having Firm Registration No. 002777S, Chennai -600 034, the retiring auditors holds office until the conclusion of the ensuing Annual General Meeting and is eligible for reappointment. Your Company has received confirmation from the Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014. Your Board is of the opinion that continuation of M/s. Pratapkaran Paul & Co., Chartered Accountants, as Statutory Auditors during F.Y.2015- 16 will be in the best interests of the Company and therefore, Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till next Annual General Meeting at remuneration be decided by the Board. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. II. Secretarial Auditor The Members has appointed CS.V. Nagarajan & Co., Practicing Company Secretary, to conduct Secretarial Audit for the F.Y. 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. III. Internal Auditor The Board of Directors has appointed M/s. Saravanan & Co,. Practising Chartered Accountant as Internal Auditors for the F.Y. 2014-15. 15. DISCLOSURES I.PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS : During the period under review, Company has no transactions to be reported under the disclosure of Particulars of loans, guarantees and investments made by the Company required under section 186 (4) of the Companies Act, 2013. II.TRANSACTIONS WITH RELATED PARTIES: None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Information on material transactions with related parties pursuant to Section 134(3)(h) of the Act, read with rule 8(2) of the Companies (Accounts) Rules, 2014, in form AOC-2 is annexed to this report. III.DEPOSITS & UNCLAIMED DIVIDEND : Your Company has not accepted any public deposit under Chapter V of the Companies Act, 2013. During the year under review, in terms of provisions of Investors Education and Protection Fund (Awareness and Protection of Investors) Rules, 2014, unclaimed dividend declared by the Company for financial year 2007-08, aggregating to Rs.54,355/-and Unclaimed IPO refund amount Rs. 1,20,904/- was transferred to Investors Education and Protection Fund. IV. Extract of Annual Return : The Extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report. V. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 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 (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2014-15. VI. REGULATORY ORDERS: No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company's operations in future. VII .CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Your Company is into the business of Broadcasting of General Entertainment Television Channels. Since this business does not involve any manufacturing activity, most of the information required to be provided under Section 134(3) (m)) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are Nil / Not Applicable. VIII) HUMAN RESOURCES & PARTICULARS OF EMPLOYEES Being in the business of creativity and business of people, to ensure sustainable business growth and become future ready, over the years your Company has been focusing on strengthening its talent management and employee engagement processes and through the year, organization’s engagement scores has improved to highest percentile in the entertainment sector. PARTICULARS OF EMPLOYEES Your Company had 625 employees as of March 31, 2015 as against 515 employees as of March 31, 2014 and your Company provided additional employment opportunity to 112 people and empowered the human resource assets during the year. Requisite disclosures in terms of the provisions of Section 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under the said rules requires your Company to disclose the particulars of employees who are in receipt of remuneration of Rs. 60 lakhs or more per annum and those who were in receipt of remuneration of Rs. 5 lakhs or mores per month. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.(Director's Report Annexure V -B). IX. VIGIL MECHANISM AND WHISTLE BLOWER POLICY Section 177 of the Companies Act, 2013 requires every listed Company and such class or classes of companies, as may be prescribed to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed. The Company has adopted a Code of Conduct for Directors and Senior Management Personnel ("the Code"), which lays down the principles and standards that should govern the actions of the Directors and Senior Management Personnel. Any actual or potential violation of the Code, howsoever in significant or perceived as such, is a matter of serious concern for the Company. Such a Vigil Mechanism shall provide for adequate safeguards against victimization of persons who use such mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. Effective October 1, 2014, Clause 49 of the Listing Agreement between listed companies and the Stock Exchanges, inter alia, provides for a mandatory requirement for all listed companies to establish a mechanism called 'Whistle Blower Policy' for employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the company's code of conduct. The Company has laid down code of conduct for Board of Directors and senior management personnel. Report details of establishment of vigil mechanism (for directors and employees to report genuine concerns) pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49 of the Listing Agreement. 16. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS Internal Control: The Company has a defined management reporting system and periodic reviews of it business to ensure timely check and decision-making. The Management Information System (MIS) forms an integral part of the Company's control mechanism. Any material change in the business process is reported to the Board regularly. 17. DISCLOSURES IN TERMS OF THE PROVISIONS OF SECTION 197 (12) OF THE ACT READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONAL) RULES, 2014 ARE PROVIDED IN THE ANNUAL REPORT. 18. SHAREHOLDING OF DIRECTORS/PROMOTERS AND PROMOTER GROUP: The Managing Director and other whole time Directors along with their spouse and dependent children constituting promoters and Promoter group hold more than two percent of the equity share of the Company in their individual capacity. Independent Directors do not hold any share in the Company. 19. PLEDGING OF THE SHARES BY THE PROMOTERS: As required under SEBI (Substantial Acquisition and Takeover) Regulation, 1997, the Promoters, promoter group and the Persons acting in concert representing Promoters and promoter Group pledged shares during the financial year. 20. FORMAL ANNUAL EVALUATION: The performance evaluation of the Board, its Committees and individual Directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, its Committees and self-evaluation. The Chairperson of the Board Nomination and Remuneration Committee (BNRC) held separate discussions with each of the Directors of the Company and obtained their feedback on over all Board effectiveness as well as on each of the other Directors. Based on the questionnaire and feedback, the performance of every Director was evaluated in the meeting of the BNRC. 21. DISCLOSURE ABOUT COST AUDIT During the F.Y. 2014-15, the Provision of cost audit requirements is not applicable to the Company. 22. RATIO OF REMUNERATION TO EACH DIRECTOR: Details / Disclosures of Ratio of Remuneration to each Director to the median employee's remuneration as per Section 197(12) read with Rule 5 (1) (2) & (3) of Cos (Appointment & Remuneration) Rules, 2014 is annexed to this report. 23. LISTING WITH STOCK EXCHANGES: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE & BSE where the Company's Shares are listed. 24. SHARES IN SUSPENSE ACCOUNTS: As required under Clause 5A of the Listing Agreement, 2 shareholders and 116 numbers of outstanding shares are lying in the suspense account at the beginning and end of the year. The Company has not been approached by any of these shareholders. The voting rights on the shares outstanding in the suspense account as on March 31, 2015 shall remain frozen till the rightful owner of such shares claims the shares. In compliance with the said requirements, these shares will be transferred into one folio in the name of 'Unclaimed Suspense Account' in due course. 25. DIRECTORS' RESPONSIBILITY STATEMENT: PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013 ('THE ACT'), IN RELATION TO THE AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2014-2015, YOUR DIRECTORS CONFIRM THAT: (a) The Financial Statements of the Company comprising of the Balance Sheet as at March 31, 2015 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same; (b) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, 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 of the Company for the year ended on that date; (c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities; (d) Requisite internal financial controls were laid down and that such financial controls are adequate and operating effectively; and (e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively. 26. ACKNOWLEDGEMENT: The Directors take this opportunity to thank all their valued customers, business associates and vendors for their kind support. The Directors also record their appreciation for the sincere and dedicated efforts put in by all Employees. Employees are our vital and most valuable assets. Your Directors value the professionalism and commitment of all employees of the Company and place on record their appreciation of the contribution made by employees of the Company at all levels that has contributed to your Company's success and remain in the forefront of media and entertainment business. Your Directors thank and express their gratitude for the support and co-operation received from the Central and State Governments / regulatory authorities viz. the Ministry of Information & Broadcasting, the Department of Telecommunication, Ministry of Corporate Affairs, Reserve Bank of India, Securities and Exchange Board of India, Foreign Investment Promotion Board, the Stock Exchanges and Depositories and other stakeholders including viewers, producers, vendors, financial institutions, banks, investors , service providers and all our stakeholders. Your directors also place on record their appreciation of the tireless efforts of Team RAJTV, a dedicated and loyal band of people who have displayed unswerving commitment to their work in these challenging times and helped the Company deliver good results. For and on behalf of the Board of Directors Sd/- M.Rajendran Chairman & Managing Director – Sd/-M Ravindran, Director Place: Chennai Date: 27th May 2015 |