Entertainment Network (India) Ltd Directors Report.
Your Directors have pleasure in presenting the Eighteenth Annual Report together with the audited financial statements of Entertainment Network (India) Limited [the Company/ ENIL/ Radio Mirchi] for the financial year ended March 31,2017.
The financial statements for the year ended March 31, 2017 are the first the Company has prepared under Indian Accounting Standards (Ind AS). The financial statements for the year ended March 31,2016 have been restated in accordance with Ind AS for comparative information.
The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards. the transition was carried out from Indian Accounting principles generally accepted in India as prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAp), which was the previous GAAR Reconciliations and descriptions of the effect of the transition have been summarized in Note 49 to the financial statements.
1. Financial Highlights
|Financial Year 2016-17||Financial Year 2015-16||Financial Year 2016-17||Financial Year 2015-16|
|Profit before taxation||7,831.22||15,662.03||7,896.17||15,727.66|
|Profit after taxation||5,447.40||10,792.53||5,516.96||10,852.25|
|other comprehensive income net of tax||(48.76)||20.13||(48.76)||20.13|
|Total Comprehensive Income||5,398.64||10,812.66||5,468.20||10,872.38|
|Profit brought forward||57,022.53||46,783.62||57,225.19||46,926.56|
|Equity (issued, subscribed & paid up share capital)||4,767.04||4,767.04||4,767.04||4,767.04|
|Transfer to General Reserve||Nil||Nil||Nil||Nil|
|Adjustments due to change in rates of Depreciation||Nil||Nil||Nil||Nil|
|proposed dividend (including dividend distribution tax)||573.75||573.75||573.75||573.75|
|Surplus carried to Balance Sheet||61,847.42||57,022.53||62,119.63||57,225.19|
2. Financial Performance, Operations and state of the Companys affairs
Your Company took advantage of the Batch-1 auctions under phase-3 policy and grew its business strongly during FY17. Total income of the Company increased from 54,286.03 lakhs during the previous year to 57,611.13 lakhs during the year under review. Profit after tax was 5,447.40 lakhs.
On a consolidated basis, total income of the Company increased from 54,354.01 lakhs during the previous year to 57,680.10 lakhs during the year under review. Profit after tax was 5,516.96 lakhs.
The financial performance is discussed in more detail in the Management Discussion and Analysis Report which forms part of the Annual Report.
The biggest event of FY17 was the Government of Indias DeMonetization initiative. The immediate impact of the program on the media industry was negative, and the impact was felt in both Q3 and Q4 of FY17. Your Company also took a hit in both quarters. However, because of its multiproduct strategy (products other than core radio), your Company was able to avoid any de-growth in revenues in the months of November 2016 to March 2017. While core radio de-grew marginally, the other businesses including Activations, Concerts, Tv properties, Multi-media solutions and Digital together provided growth during this period.
Your Company has been adding new products to its sales portfolio every few years. Concerts is one such product. While concerts as a business was launched in a small way a few years back, it got a big thrust in FY17, with the business reporting 100%+ growth. Your Company regards concerts as a major growth area for the future.
In September 2015, your Company had executed a Business transfer Agreement (BTA) with Tv today network Limited (TVTN) to purchase TVTNs four radio stations in Amritsar, Jodhpur, patiala and Shimla. Your Company has now been operating these stations for more than one full year. It is extremely heartening to note that the four stations have reported a strong growth in revenues in FY17, resulting in an EBITDA margin of 20%. In H2 of FY16 (the first half of our acquisition), we had reported an EBITDA loss of 44.7%. This successful assimilation of the acquired stations gives us confidence in our ability to pursue more acquisition targets in the future.
In August 2016, the Company entered into an Advertising Sales Agreement (ASA) with TVTN in relation to TVTNs remaining three radio stations at New Delhi, Mumbai and Kolkata. pursuant to the ASA, TVTN has agreed to appoint ENIL as an agent of TVTN with effect from September 1, 2016 to facilitate the sale of TVTNs airtime to third-parties who wish to advertise using TVTNs airtime.
The Company participated in the 2nd batch of phase-3 auctions held between october 26, 2016 and December 14, 2016.
After this batch of auctions, the Company acquired licenses in 21 new cities. These are Bhavnagar, Jamnagar, Junagadh, Mehsana, Bharuch and palanpur in Gujarat, Akola and Amravati in Maharashtra, Tiruchirapalli and Tirunelveli in Tamil Nadu, Rajahmundry in Andhra pradesh, Warangal in
Telengana, Durg/Bhilai and Raigarh in Chhatisgarh, Hubli/Dharwad and Mysuru in Karnataka, ujjain in Madhya pradesh, Jhansi in uttar pradesh, Asansol and Siliguri in West Bengal and the union Territory of puducherry. With these 21 cities, the core Mirchi brand will expand its footprint deeper into strategically important and fast growing cities and states. Its presence will increase from 43 to 64 cities in India. However, since your Company has decided to surrender the Goa license, the total number of cities will become 63.
The total value of bids made by ENIL is 51.3 crores. These frequencies are expected to become operational towards the end of FY18.
The Scheme of Amalgamation and Arrangement (Scheme) of Times Infotainment Media limited [TIME], the holding company of the Company with Bennett, Coleman & Company Limited (BCCL), the holding Company of TIML was filed under the Companies Act, 1956. The Scheme was approved by the Honble Bombay High Court vide order dated July 3, 2015 (Order). The Honble Bombay High Courts approval was however subject to the approval of the Ministry of Information & Broadcasting, Government of India (MIB).
The MIB, vide its letter dated April 25, 2016 (received by the Company on April 26, 2016), accorded its approval to the change in ownership pattern of the Company under the Scheme. Consequently, TIMLs entire shareholding in the Company was transferred to BCCL, and BCCL is the sole promoter shareholder of the Company.
In January 2017; the Company issued Unsecured Commercial papers (Cps). The amount raised through issuance of Cps was 121.8 crores. The Cps have a tenor of 364 days and will mature in January 2018. The maturity value of Cps is 130 crores. The effective yield of the CPs is 6.75% per annum. proceeds from the Cps were used to finance the Companys business needs.
In March 2017; the Company fully repaid the unsecured Commercial papers (Cps) with maturity value of 270 crores issued to BNp paribas in March 2016.
There were no other material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which this financial statements relate and the date of this Report.
3. T ransfer to reserves
The Company does not propose to transfer any amount to General Reserve out of the amount available for appropriations.
Your Directors are pleased to recommend a dividend @10% i.e. 1.00 (Rupee one only) per equity share of 10/- each for the financial year ended March 31, 2017, aggregating 573.75 lakhs including dividend distribution tax of 97.05 lakhs. the dividend payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM). the dividend, if declared at the AGM, would be paid/ dispatched within thirty days from the date of declaration of dividend to those persons or their mandates:
whose names appear as beneficial owners as at the end of the business hours on August 23, 2017 in the list of the Beneficial owners to be obtained from the Depositories i.e. National Securities Depository Limited [NSDL] and Central Depository Services (India) limited [CDSL], in respect of the shares held in electronic/ dematerialized mode; and
whose names appear as Members in the Register of Members of the Company as on August 23, 2017 after giving effect to valid share transfers in physical forms lodged with the Company/ Registrar & Share transfer Agents, in respect of the shares held in physical mode.
5. Deposits from public
the Company has not accepted any deposits from public and therefore the details relating the deposits covered under Chapter V of the Companies Act, 2013 are not required to be furnished.
6. Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 read with the applicable rules thereto, including any statutory modification(s) or reenactment thereof for the time being in force (the Act), Mr. Prashant Panday (DIN: 02747925) retires by rotation at the ensuing AGM and being eligible, offers himself for reappointment.
Mr. B. S. Nagesh (DIN: 00027595) resigned from the Board of Directors of the Company effective from the close of the business hours on November 8, 2016 due to personal commitments and other pre-occupations. The Board of Directors places on record their appreciation for the valuable contributions made by Mr. Nagesh.
The Company has received the declarations from all the Independent Directors of the Company pursuant to the provisions of Section 149 and all other applicable provisions of the Act stating that they meet the criteria of independence as provided under the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [Listing Regulations] and that they are not disqualified to become directors under the Act; and in the opinion of the Board of Directors, all the Independent Directors fulfill the criteria of independence as provided under the Act, rules made thereunder, read with the Listing Regulations and that they are independent of the management.
Brief resume of the director proposed to be reappointed, relevant information including nature of his expertise in specific functional areas, qualifications, terms of appointment, details of remuneration, names of the companies in which he holds directorships and the memberships/ chairmanships of Committees of the Board, his shareholding in the Company, etc., as stipulated under the Listing Regulations and Secretarial Standards has been furnished separately in the Notice convening the AGM read with the Annexure thereto forming part of this Report.
None of the Directors are related with each other or key managerial personnel (inter-se).
Details of the number of meetings of the Board of Directors and Committees and attendance at the meetings have been furnished in the Report on Corporate Governance.
Following persons are designated as the Key Managerial Personnel (KMP):
Mr. Prashant Panday: Managing Director & CEO
Mr. N. Subramanian: Group CFO
Mr. Mehul Shah: SVP Compliance & Company Secretary
7. Board Evaluation
The Board of Directors is committed to continued improvement in its effectiveness. Accordingly,
36 I Entertainment Network (India) Limited the Board participated in the annual formal evaluation of its performance. This was designed to ensure, amongst other things, that the Board, its Committees and each director continue to contribute effectively.
The Board and its Committees evaluations involved questionnaire-driven discussions that covered a number of key areas / evaluation criteria including the roles and responsibilities, size and composition of the Board and its Committees, dynamics of the Board and its Committees and the relationship between the Board and management. The results of the reviews were discussed with the relevant Committees and collectively by the Board as a whole. Feedback was also sought on the contributions of individual directors. Independent directors, at their Meeting led by the Chairman of the Nomination & Remuneration Committee, conducted the performance review of the Chairman, Non-Independent Directors and the Board as a whole in respect of the financial year under review.
Formal Annual Evaluation was made in compliance with all the applicable provisions of the Act and the Listing Regulations. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
8. Board Familiarization Program
At the time of appointment of a new director, through the induction process, he/ she is familiarized with the Company, directors roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Detailed presentations are made before the Board Members at the Board and its Committee meetings covering various areas including business strategy, branding, programming, financial performance and forecast, compliances/ regulatory updates, audit reports, risk assessment and mitigation, etc. The details of the familiarization program are available on the Companys website at: www.enil.co.in at web link: httpy/www. enil. co. in/policies-code-of-conduct.php
9. Policy on directors appointment and remuneration
the Companys policy on the Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matters as provided under Section 178 of the Act is titled as nomination &
Remuneration policy and appended as Annexure A to this Report.
10. Audit committee
the Audit Committee of the Company presently comprises of the following Directors as on the date of this Report:
Mr. N. Kumar - Chairman (Independent NonExecutive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. Richard Saldanha (Independent NonExecutive Director)
The Internal Auditors of the Company report directly to the Audit Committee. All the recommendations of the Audit Committee were accepted by the Board of Directors. Brief description of terms of reference and other relevant details of the Audit Committee have been furnished in the Report on Corporate Governance.
11. Vigil Mechanism
The Company has a Whistle Blower Policy / Vigil Mechanism in place. The objective of the Vigil Mechanism is to provide the employees, directors, customers, vendors, contractors and other stakeholders of /in the Company an impartial and fair avenue to raise concerns and seek their redressal, in line with the Companys commitment to the highest possible standards of ethical, moral and legal business conduct and fair dealings with all its stakeholders and constituents and its commitment to open communication channels. The Company is also committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization, for whistle blowing in good faith. The Board of Directors affirms and confirms that no personnel has been denied access to the Audit Committee. The Policy contains the provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.
Whistle Blower Policy/ Vigil Mechanism is available on the Companys website at: www.enil.coi at http://www . enil. co. in/policies-code-of-conduct.php
12. CSR Committee
The constitution, composition, quorum requirements, terms of reference, role, powers, rights, obligations of Corporate Social Responsibility Committee [CSR Committee] are in conformity with the provisions of Section 135 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility policy) Rules, 2014 and all other applicable rules made under the Companies Act, 2013 (including any statutory modification(s) or re-enactment or amendments thereof).
The CSR Committee of the Company presently comprises of the following Directors as on the date of this Report:
Mr. Vineet Jain (Non- Executive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. prashant panday (Managing Director & CEO)
Mr. B. S. Nagesh - member of the Committee resigned effective from the close of the business hours on November 8, 2016.
During the financial year under review, the Committee met four times, i.e. on May 19, 2016; August 2, 2016; November 8, 2016 and February 13, 2017.
Brief description of terms of reference of the Committee inter alia includes:
To formulate and recommend to the Board of Directors (Board), a Corporate Social Responsibility (CSR) policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;
To approve CSR activities;
To recommend to the Board the amount of expenditure to be incurred on the CSR activities;
To monitor the CSR Policy of the Company from time to time;
To institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the Company;
To carry out any other functions as authorized by the Board of Directors from time to time or as enforced by statutory/regulatory authorities.
CSR Policy development and implementation:
The CSR Policy is available on the Companys website at www.enil.co.inhttp://www.enil.co.in/ policies-code-of-conduct.php
Annual report on CSR activities as required under the Companies (Corporate Social Responsibility
Policy) Rules, 2014 has been appended as Annexure Bto this Report.
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company presently comprises of the following Directors as on the date of this Report:
Mr. N. Kumar - Chairman (Independent NonExecutive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. Richard Saldanha (Independent NonExecutive Director)
Mr. Vineet Jain (Non- Executive Director)
Brief description of terms of reference and other relevant details of the Nomination and Remuneration Committee have been furnished in the Report on Corporate Governance.
14. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company presently comprises of the following Directors as on the date of this Report:
Mr. Richard Saldanha - Chairman (Independent Non- Executive Director)
Mr. Ravindra Kulkarni (Independent NonExecutive Director)
Mr. Prashant Panday (Managing Director & CEo)
Brief description of terms of reference and other relevant details of the Stakeholders Relationship Committee have been furnished in the Report on Corporate Governance.
15. Audit Report
The Audit Report does not contain any qualification, reservation or adverse remark.
At the fifteenth AGM held on August 12, 2014, the Members had approved the appointment of S. R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm Registration number - 101049W/ E300004) as the statutory auditors of the Company to hold the office from the conclusion of the fifteenth AGM till the conclusion of the sixth consecutive AGM commencing from the AGM wherein such appointment was made. As per the provisions of Section 139 of the Act, the Company shall
place the matter relating to such appointment for ratification by members at every AGM. Accordingly, the appointment of S. R. Batliboi & Associates LLP, Chartered Accountants, as the statutory auditors of the Company is placed for ratification by the members of the Company.
S. R. Batliboi & Associates LLp have furnished a certificate in terms of the Companies (Audit and Auditors) Rules, 2014 and confirmed their eligibility in terms of Section 141 and all other applicable provisions of the Act, read with the applicable rules thereto.
other relevant information has been furnished at Item No. 5 of the Notice convening the AGM.
17. Secretarial Auditor and report
The Board of Directors had appointed M/s. Hemanshu Kapadia & Associates, Company Secretaries (C. P No: 2285), to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is appended as Annexure C to this Report.
the Secretarial Audit Report dated May 4, 2017 does not contain any qualification or adverse remark or observation.
18. Cost Auditor and report
the Board of Directors, on recommendation of the Audit Committee and pursuant to Section 148 and all other applicable provisions of the Act, read with the Companies (Audit and Auditors) Rules, 2014 and all other applicable rules made under the Act (including any statutory modification(s) or re-enactment thereof for the time being in force), has approved the appointment and remuneration of the Cost Auditors, M/s. R. Nanabhoy & Co., Cost Accountants (Firm registration number- 00010) to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2018. the aforesaid appointment of M/s. R. Nanabhoy & Co. is subject to the relevant notifications, orders, rules, circulars, etc. issued by the Ministry of Corporate Affairs and other regulatory authorities from time to time. the remuneration payable to M/s. R. Nanabhoy & Co. shall be 4,50,000 (Rupees four lakhs fifty thousand only) plus out of pocket expenses and applicable taxes for the aforesaid audit. the remuneration payable to the Cost Auditors is required to be ratified subsequently by the shareholders. Accordingly,
consent of the members has been sought for passing the resolution as set out at Item No. 6 of the Notice convening the AGM for ratification of the remuneration payable to the Cost Auditors for the financial year ending on March 31,2018.
The Cost Audit Report for the financial year 201516 was filed on August 29, 2016. The Cost Audit Report for the financial year 2016-17 will be filed on/ before the due date.
19. Conservation of energy, Technology absorption and Foreign exchange earnings and Outgo
the Company is in the business of private FM Radio Broadcasting. Hence, most of the information required to be provided relating to the Conservation of energy and technology absorption is not applicable.
However the information, as applicable, is given hereunder:
i) Conservation of energy:
the operations of the Company are not energy intensive. Nevertheless, continuous efforts such as installation of energy efficient electronic devices, implementation of Sops etc. aimed at reducing energy consumption are being made by the Company and its employees to reduce the wastage of scarce energy resources.
ii) technology absorption:
the efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution:
A lot of new features were added to the Customer Relationship Management (CRM) solution to improve sales efficiency and bring in greater control.
ENIL has adopted efficient use of software and networking facilities to re-use content efficiently and ensure good return on investments.
Imported technology (imported during last three years reckoned from the beginning of the financial year): Nil
the expenditure incurred on Research & Development (R & D): Foray in the Digital Space:
Mirchi continues to grow its online radio reach. We now stream 19 online radio stations in partnership with Gaana and the listenership across our online stations has grown to over 3 million listeners a month. We added 5 new stations this year - Mirchi Top 20, International Hitz, Rabindra Sangeet, Mirchi Mehfil and Campus Radio. one key development for the online radio streaming business has been the launch of a radio station sponsored by a Brand - Campus Radio. This sponsorship model offers a better monetization opportunity than a traditional audio/ banner advertisement model.
Radio Mirchis digital presence extends beyond online radio to social media and website, and it has the biggest digital footprint compared to all other competitors. We streamed almost 200 million video views on our YouTube channels in FY2017. Radio Mirchi has the biggest social media presence with a fan base of over 4.3 million across Facebook, and 3.3 lakhs across Twitter. The website continues to be the #1 radio website in India.
Our digital innovations got a lot of recognition this year - we won a Gold and Silver at the DIGIXX digital awards for innovation in digital marketing and user interface design; and Campus Radio got shortlisted at Abby Awards for marketing innovation.
iii) Foreign exchange earnings and outgo:
The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.
Rs. in lakhs
|Financial Year||Financial Year|
|Foreign exchange earnings||698.20||566.85|
|Foreign exchange outgo||953.47||648.32|
20. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure D to this Report.
The Managing Director of the Company does not receive any remuneration or commission from the Companys holding or subsidiary company.
As per the provisions of Section 197 of the Act read with the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other relevant particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of the Annual Report. As per the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is made available for inspection at the Registered Office and Corporate Office of the Company during working hours for a period of 21 days before the date of AGM. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report is available on the Companys website at: www.enil.co.in
21. Extract of Annual Return
Extract of Annual Return of the Company as required under Section 92 of the Act is attached as Annexure Eto this Report in the Form MGT 9.
22. Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
any equity shares with differential rights as to dividend, voting or otherwise;
any shares to its employees under the Employees Stock option Scheme;
any Sweat Equity Shares.
The equity shares of the Company are listed and admitted to dealings on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) since February 15, 2006. Annual Listing Fee has been paid to each exchange. As required under the Listing Regulations, the Company has executed the Uniform Listing Agreement with BSE and NSE.
23. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the financial year under review as stipulated under Regulation 34 of the Listing Regulations is set out in a separate section forming part of this Report.
24. Business Responsibility Report
As per the amendment in the Regulation 34 of the Listing Regulations notified on December 22, 2015, mandatory reporting of Business Responsibility Report in the Annual Report is now applicable to the top five hundred listed entities based on market capitalization (earlier the mandatory reporting applied only to the top hundred listed entities based on market capitalization). Accordingly, the Company has published a separate Business Responsibility Report (BRR) for the financial year under review as stipulated under Regulation 34 of the Listing Regulations. BRR is in line with the key principles stated in the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business framed by the Ministry of Corporate Affairs and is attached as Annexure F to this Report.
25. Corporate Governance
The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated under the Listing Regulations. A separate report on Corporate Governance is enclosed as a part of this Report along with the Certificate from the Practicing Company Secretary.
26. Directors Responsibility Statement
Pursuant to the provisions of Section 134 of the Act, the Directors hereby confirm that:
a) in the preparation of the annual accounts for the financial year ended on March 31, 2017, the applicable accounting standards have been followed and that there are no material departures from the same;
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 ended on March 31, 2017 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 the Companies Act, 2013 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 for the Company and such internal financial controls are adequate and operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
27. Contracts and arrangements with related parties
All contracts / arrangements / transactions entered into by the Company during the financial year under review with related parties were in the ordinary course of business and on an arms length basis.
Bennett, Coleman & Company Limited (BCCL) is the holding company and a related party under Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations. As on date, BCCL holds 33918400 equity shares in the Company (i.e. 71.15% of the paid up capital of the Company).
Pursuant to the provisions of Section 188 of the Act, read with the Companies (Meeting of Board and its Powers) Rules, 2014, related party transactions beyond the prescribed threshold limit require prior approval of the company by a resolution. However, if the proposed transactions with the related parties are at arms length and in its ordinary course of business, the said approval of the company is not required. Further, in terms of Regulation 23 of the Listing Regulations, transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the company as per the last audited financial statements of the company.
In order to achieve efficiencies in Ad sales, business synergies, economics of scale and also to optimize costs, the Company and BCCL have entered into various contracts/ arrangements/ transactions relating to the transfer and / or availing of resources, services or obligations in the past and propose to continue with such contracts/ arrangements/ transactions in the future too.
In compliance with Regulation 23 of the Listing Regulations, during the financial year under review, the Company sought the approval from the Members of the Company by way of postal Ballot for the contracts/ arrangements/ transactions entered into and/ or to be entered into with Bennett, Coleman & Company limited (BCCL), the holding company, relating to the transfer and / or availing of resources, services or obligations for the Financial Year 2016-2017 and subsequent financial years exceeding ten percent but not exceeding twenty five percent of the annual consolidated turnover of the Company, as per the last audited financial statements of the Company relevant for the respective financial years.
Details of the Material Related party Transactions,
i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, entered during the year by the Company, as required under Section 134(3) (h) of the Act (in the Form AoC 2) is attached as Annexure Gto this Report.
the Companys policy on Materiality of related party transactions and dealing with related party transactions is available on the Companys website at: www.enil.coAi at http://www.enil.co.in/policies- code-of-conduct.php
The related party transactions are entered into based on business exigencies such as synergy in operations, profitability, market share enhancement etc. and are intended to further the Companys interests. In accordance with the applicable accounting standards, transactions with related parties are furnished in the financial statements.
28. Dividend Distribution Policy
The Company has formulated a Dividend Distribution Policy as required under the Regulation 43A of the Listing Regulations. The said Policy is appended as Annexure H to this Report and also uploaded on the Companys website at www.enil . co.in.
29. Particulars of loans given, investment made, guarantees given and securities provided
The Company has not given any loans, guarantees or provided any securities under Section 186 of the Act. Particulars of investments made by the Company during the financial year 2016-17 are provided in the financial statements. Please refer to
the Note no. 7 and 11 to the standalone financial statements for details of investments made by the Company.
30. Risk Management
The Board of Directors is entrusted with various key functions including framing, implementing and monitoring the risk management plan for the Company; ensuring the integrity of the Companys accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the laws and relevant standards.
The Board of Directors has adopted the Risk Management Policy coupled with the Enterprise Risk Management framework and also established related procedures to inform Board Members about the risk assessment and minimization procedures. Major risks are identified, adequately mitigated continuously and the same are reported to the Audit Committee and Board of Directors along with the action taken report. Risk Management Policy envisages assessment of strategic risks, operational risks, financial risks, regulatory risks, human resource risks, technological risks.
Risk Management Policy adopted by the Company involves identification and prioritization of risk events, categorization of risks into High, Medium and Low based on the business impact and likelihood of occurrence of risks and Risk Mitigation & Control.
The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys Risk Management policies, systems and procedures. Internal Audit is carried out by KPMG - the independent Internal Auditors. Internal Audit covers all the radio stations at pan India level and corporate office as per the annual audit plan approved by the Audit Committee. Internal Audit report is presented to the Audit Committee on regular basis and the Chairman of the Audit Committee briefs the Board of Directors about the same.
31. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to financial
42 I Entertainment Network (India) Limited statements. The Companys internal control systems, including internal financial controls, are commensurate with the nature of its business and the size and complexity of its operations and same are adequate and operating effectively. these systems are periodically tested and no reportable material weakness in the design or operation was observed. the Audit Committee reviews adequacy and effectiveness of the Companys internal control system including internal financial controls.
32. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting standard, the audited Consolidated Financial Statements are provided and form part of the Annual Report.
33. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) is the Companys wholly owned subsidiary since 2007. ABSL recorded a total income of 68.98 lakhs during the financial year 2016-17. Profit after tax stood at 69.55 lakhs for the financial year under review.
As per Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of the Subsidiary Company are attached along with the financial statements in the prescribed Form AoC-1. the Company does not have any associate company or joint venture. there has been no change in the nature of the business of the subsidiary.
The Company shall make available the financial statements and the related detailed information of its subsidiary to any Member of the Company or its subsidiary who may be interested in obtaining the same at any point of time and same is also available on the website: www.enil.co.in . these documents will also be available for inspection during business hours at the Registered Office and Corporate Office of the Company. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Company.
The audited financial statements, including consolidated financial statements and all other relevant documents required to be attached thereto are available on the Companys website: www.enil.co.in
the policy for determining material subsidiaries is available on the Companys website:
www.enil.co.il at http://www.enil.co.in/policies- code-of-conduct.php
34. Significant or material order
During the financial year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.
35. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. During the financial year under review, no complaint pertaining to sexual harassment was reported to the Internal Complaints Committee of the Company.
Your Directors take this opportunity to convey their appreciation to all the members, listeners, advertisers, media agencies, dealers, suppliers, bankers, regulatory and government authorities and all other business associates for their continued support and confidence in the management of the Company. Your Directors are pleased to place on record their appreciation of the consistent contribution made by employees at all levels through their hard work, dedication, solidarity and co-operation and acknowledge that their efforts have enabled the Company to achieve new heights of success.
For and on behalf of the Board of Directors
Chairman (DIN: 00003962)
pune, May 23, 2017
Entertainment network (India) limited,
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg, lower parel (West),
Mumbai - 400 013.