Your Directors have pleasure in presenting the Twenty Third Annual Report together with the audited financial statements of Entertainment Network (India) Limited [the Company/ ENIL] for the financial year ended March 31, 2022.
The financial statements for the year ended March 31, 2022 have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendments issued thereafter.
1. Financial Highlights
( in lakhs)
|Financial Year 2021-22||Financial Year 2020-21||Financial Year 2021-22||Financial Year 2020-21|
|Revenue from operations||30,591.70||26,681.72||32,330.41||27,208.84|
|Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense||5,864.74||3,398.80||6,419.20||3,519.95|
|Less: Depreciation/ Amortisation/ Impairment||7,884.07||9,479.88||9,093.31||9,922.51|
|(Loss) before Finance Costs, Exceptional items and Tax Expense||(2,019.33)||(6,081.08)||(2,674.11)||(6402.56)|
|Less: Finance Costs||1,616.26||1,832.21||1,824.15||1,890.87|
|(Loss) before Exceptional items and Tax Expense||(3,635.59)||(7,913.29)||(4,498.26)||(8,293.43)|
|Add/(less): Exceptional items||-||(7426.39)||-||(7,165.18)|
|(Loss) before Tax Expense||(3,635.59)||(15,339.68)||(4,498.26)||(15,458.61)|
|Less: Tax Expense (Current & Deferred)||(887.53)||(4,412.97)||(877.23)||(4,408.30)|
|(Loss) for the year||(2,748.06)||(10,926.71)||(3,621.03)||(11,050.31)|
|Shareholders of the company||(2,748.06)||(10,926.71)||(3630.21)||(11,050.31)|
|Balance of profit for earlier years||56.820.14||68,204.74||56,595.14||68,103.33|
|Other comprehensive income/(Loss) for the year||(40.70)||18.82||(40.70)||18.82|
|Transfer to Legal Reserves||-||-||(3.92)||-|
|Dividend paid on Equity Shares||(476.70)||(476.70)||(476.70)||(476.70)|
|Balance carried forward||53,554.68||56.820.15||52,443.60||56,595.14|
2. Financial Performance, Operations and the state of the Companys affairs
Total income of the Company increased from 28,454.64 lakhs during the previous year to 32,190.19 lakhs during the year under review. Loss after tax declined from (10,926.71) lakhs during the previous year to loss of (2,748.06) lakhs during the year under review.
On a consolidated basis, total income of the Company increased from?29,117.52 lakhs during the previous yearto 33,968.07 lakhs during the year under review. Loss declined from (4,408.30) lakhs during the previous year to loss of (877.23) lakhs during the year under review.
FY22 was expected to be a year of recovery after a disastrous FY21. Plans were drawn up accordingly. There had been six months of relative calm on the Covid-19 front, from October 2020 to March 2021, and hopes were running high. FY22 did eventually show recovery over FY21, but unfortunately, it was only a partial recovery.
The reasons were the same as the ones that impacted business in FY21. Covid-19 destroyed the first quarter of FY22 as the Delta variant proved to be extremely infectious and dangerous. As cases spiked, the countrys infrastructure was severely tested. There was a major crisis as hospitals ran out of beds. Deaths shot up and there were terrible stories of bodies being cremated in the open and pictures of unclaimed bodies floating in the Ganges. The Government at the Center and in the states responded as best as they could. They imposed lockdowns again, but this time in a more practical way, ensuring the business was disrupted lesser than in FY21. The focus was on vaccinating people at the fastest pace possible. Over the next few months, India
Board of Directors Report
hit some major global milestones on this front. By the end of June, Delta had been contained and our cities started reopening. The first quarter was unfortunately a washout for everyone.
As a result, your Companys revenues recovered only partially in Q1, growing 7% over the same quarter in FY21. However, the recovery gained strength in the 2nd and 3rd quarters. In Q2, revenue growth was 46% and in Q3, it was 17%.
Unfortunately, in Q4, Omicron struck, and the country again went into partial lockdowns in the major cities. Fortunately, however, Omicron proved to be a milder variant and by then, most people in the country had been single or double vaccinated. Governments had learnt smarter ways of protecting people without treacherous lockdowns and businesses had learnt how to grapple with these recurring Covid-19 waves. As a result, the impact of Covid-19 was less. Your Company managed to eke out a small growth in revenues of 0.3% in Q4, despite a near washout in the first half of the quarter.
Because of the crisis, advertisers had an upper hand over media companies, and they used it to extract discounts in pricing. After losing nearly 28% in pricing in FY21 (over FY20) for top 35 stations, your Company lost another 8% in FY22. Advertisers however did not take the savings home. They gave higher advertising volumes to your company. Capacity utilization across the top 35 stations grew handsomely by 31% and reached the pre-pandemic level. Ad volumes could have increased even more, had it not been for the stress in the MSME sector, which resulted in fewer ad billers in FY22. At an industry level, billers were down by 47% in Q1, 33% in Q2, 27% in Q3 and 23% in Q4 compared to the same quarters in FY20. The increase in ad volumes is a very positive sign. It shows that advertisers are looking at radio as a very important part of their media mix. As the MSME sector revives, ad volumes will grow even more, and this will allow a price recovery to take place.
Your Companys aggressive focus on cost management continued in FY22. There are two types of costs - one, Direct Variable Costs (DVC), which are incurred to run the Solutions business. The difference between Solutions revenues and DVCs is the Solutions margin. Happily, in FY22, Solutions margins improved marginally to 52% from 51.5% in FY21. The other costs are "Other operating costs" and they are what the Company spends in running the radio operations and everything else. Other Operating Costs have been a subject of intense focus since the pandemic started. You may recall that in FY21, we had cut these costs by 31% or 91 crore (from 294 crore to 203 crore). In FY22, we managed to keep cost increase from these reduced levels to just 13 crore. Included in this is 6 crore that we incurred in our new initiative, the digital app/web platform. On a like to like basis, cost increase was just 7 crore or 3% over FY21. In other words, costs were still down 78 crore over FY22 levels. In future as well, costs will remain an area of focus. Every rupee saved flows to the bottom line.
Now to the biggest development of FY22. Towards the end of the year, in February 2022, your Company launched the Mirchi app in international markets. The app is available on both iOS and Android platforms. The India launch and the launch of the web platforms, both mWeb and desktop web, will take place in the coming months. Early feedback from international markets shows that the apps UI/UX (User Interface/ Experience) is being widely appreciated. The app offers several FM radio stations. For example, in the US, the app features terrestrial radio stations from the US itself (New Jersey, San Francisco), and additionally, 12 FM radio stations from India, including Mirchi stations from Mumbai, Delhi, Ahmedabad, Chennai, Hyderabad and Chandigarh, all important places from where PIOs typically come. The India stations are time-shifted to suit US listeners. On-air ads have also been removed, so that local ads can be inserted. Similarly, in the Middle East, the app is available in the UAE, Qatar and Bahrain and features their local stations as well as the 12 from India. For PIOs living in these countries, the app is a way to stay connected with home.
The India app will have even more content. The app will carry all the best audio and video content from the Mirchi archives. Super hit audio shows like the Murga, the Devdutt Patnaik mythology show, celebrity interviews etc and big-ticket video shows like What Women Want featuring Kareena Kapoor Khan, content from the Mirchi Music Awards etc all will feature on the app. There is a plan to also add text content also, with all the buzzy news from film industries across the country. The focus of the app will however be on a specific opportunity in the content space - audio stories. While there are 50+ video OTTs all featuring fiction/entertainment, the market for audio stories is virtually vacant. Your Company is entering early and hopes to make it big in this fast-growing market.
Your Companys international operations also expanded with Dallas, Texas the latest entrant into our network of terrestrial stations in the US. International operations were also hit by Covid-19 but are now recovering. Your Company has plans to expand further, as suitable opportunities come around.
At the end of FY22, you will be happy to see that your Company is now so much more leaner and fitter. As growth revives, you can expect stronger profit margins. Your Companys digital platform plans will future-proof the company against any more Covid-19 like black swan events. They will also provide a new thrust to your Companys growth in the coming years. Your Company is increasingly becoming digital-first. There is a lot of growth to look forward to in the future.
There were no 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 these financial statements relate and the date of this Report. There has been no change in the nature of the business of the Company.
There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of onetime settlement with any bank or financial institution.
3. Transfer to reserves
The Board of Directors (Board) of your Company has decided not to transfer any amount to the reserves for the financial year under review.
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, 2022, aggregating 476.70 lakhs. The dividend payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM). The Board of Directors has approved and adopted the Dividend Distribution Policy of the Company and dividend recommendation and payout are in accordance with the Companys Dividend Distribution Policy.
As per the Income-tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the Members. Your Company shall, accordingly, make the payment of the dividend after deduction of tax at source.
The dividend, if declared at the AGM, would be paid within thirty days from the date of declaration of dividend through electronic mode to the Members who have updated their bank account details and dividend warrants/ demand drafts would be dispatched at the registered address of the Members who have not updated their bank account details, to those persons or their mandates:
? whose names appear as beneficial owners as at the end of the business hours on September 20, 2022 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 at the end of the business hours on September 20, 2022, in respect of the shares held in physical mode.
As per the provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the dividend that remains unclaimed/unpaid/ un-encashed for a period of seven years and Equity Shares of the Company, in respect of which dividend entitlements have remained unclaimed or unpaid for seven consecutive years or more, are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF), established by the Central Government. Details of the unclaimed dividend amount is available on the Company website - www.enil.co.in at the url: https:// www.enil.co.in/unclaimed-dividend.php. Calendar for transfer of unclaimed dividend to IEPF has been stated in the notes to the Notice convening the AGM. Pursuant to the guidelines issued by the IEPF Authority, Company Secretary has been nominated as the Nodal Officer to facilitate the refund of the claims of the unpaid (unclaimed) dividend (e-mail ID: mehul.shah@ timesgroup.com).
The shareholders whose dividend / shares are/ will be transferred to the IEPF Authority can claim the same from IEPF Authority by following the Refund Procedure as detailed on the website of IEPF Authority: http:// www.iepf.gov.in at http://www.iepf.gov.in/IEPF/ refund.html.
The Company has transferred 24,189, being the unpaid or unclaimed dividends declared for the financial year 2013-14 and 623 equity shares to the IEPF Authority as per the provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Details of dividends and shares transferred to the IEPF Authority are available on the Company website- www.enil.co.in at the url: https://www.enil.co.in/unclaimed-dividend. php and also on the website of IEPF Authority and the same can be accessed through the link: www.iepf.gov. in.
The Company has not accepted any deposit from the public / members under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review. Consequently, there is no requirement of furnishing details related to deposit covered under Chapter V of the Companies Act, 2013.
6. Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 (the Act) read with the applicable rules thereto, Mr. Prashant Panday (DIN: 02747925) retires by rotation at the ensuing AGM and being eligible, offers himself for reappointment. The Board of Directors recommends the reappointment of Mr. Prashant Panday as the Director of the Company.
The Company has received the consent, declarations and confirmations from all the Independent Directors of the Company pursuant to the provisions of Section 149 and all other applicable provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [Listing Regulations] stating that they meet the criteria of independence as provided under the Act and the Listing Regulations and that they are not disqualified to become directors under the Act. All the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence and that they are independent of the management. The Board of Directors took on record the said declarations and confirmations submitted by the Independent Directors under applicable provisions of the Act and the Listing Regulations after undertaking due assessment of the veracity of the same. 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.
The Board of Directors is of the opinion that all the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs at Manesar (IICA). All the Independent Directors have confirmed that they are exempted from undertaking online proficiency self-assessment test conducted by the IICA.
The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and the Code of Conduct for directors and senior management personnel formulated by the Company.
The Company has received all the relevant consent, documents, declarations, confirmation from the director proposed to be re-appointed and he is not disqualified to become the director under the Act.
As per the requirement of the circular from the stock exchange (no: LIST/COMP/14/2018-19 Dated June 20, 2018), the Board of Directors and its Nomination and Remuneration Committee, while considering the appointment and re-appointment of the directors, have verified that they are not debarred from holding the office of director pursuant to any SEBI order or any other such authority. Accordingly, the Company affirms that the Director proposed to be re-appointed is not debarred from holding the office of director by virtue of any SEBI order or any other such authority.
Certificate from the Company Secretary in Practice has been attached with the Report of Corporate Governance, confirming that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board (SEBI)/ Ministry of Corporate Affairs or any such statutory authority.
As stipulated under the Listing Regulations and Secretarial Standards, details in respect of the director seeking re-appointment at the AGM, inter-alia, age, qualifications, experience, details of remuneration last drawn by such person, relationship with other directors and Key Managerial Personnel of the Company, the number of Meetings of the Board attended during the year and other directorships, membership/ chairmanship of the committees of other Boards, shareholding, etc. are annexed to the Notice convening the AGM.
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: Executive Director & Group CFO
¦ Mr. Mehul Shah: EVP Compliance & Company Secretary
7. Annual evaluation of performance of the Board, its Committees and individual directors
The Board of Directors is committed to continued improvement in its effectiveness. Accordingly, the Board, its Committees and individual directors 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.
Evaluation of the performance of the Board, its Committees and individual directors involved structured 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, meaningful and constructive contribution and inputs in the meetings, dynamics of the Board and its Committees and the relationship between the Board and management. Chairman of the Board of Directors had meetings with the Independent Directors. Chairman of the Nomination & Remuneration Committee had meetings with the Non- Independent Directors. Independent Directors, at their Meeting led by the Chairman of the Nomination & Remuneration Committee, reviewed the performance of the Chairman, Non-Independent Directors and the Board as a whole in respect of the financial year under review. The Independent Directors, in the said meeting, also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. These meetings were intended to obtain Directors inputs on effectiveness of the Board/ Committee processes. The evaluation of the Independent Directors was done by the entire Board of Directors which included performance of the Directors and fulfillment of the independence criteria as specified in the Listing Regulations and their independence from the management. In the above evaluation, the Directors who were subject to evaluation did not participate. The results of the evaluation were discussed with the relevant Committees and collectively by the Board as a whole. Constructive feedback was also sought on the contributions of individual Directors.
Formal Annual Evaluation was made in compliance with all the applicable provisions of the Act and the Listing Regulations. During the Board Evaluation, it was observed that the Board of Directors, as a whole, is functioning as an integrated body helping the board discussion to be rich and value adding. The Board has an optimum balance of discussion between operational and strategic issues. The Board is proactively engaged on the key matters concerning talent, strategy, governance, etc. There are specific areas identified by the Board as a part of this evaluation exercise for the Board to engage itself with. 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: https://www.enil.co.in at web link: https://www.enil.co.in/policies-and-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 is available on the Companys website at: https://www.enil.co.in at web link: https://www.enil. co.in/policies-and-code-of-conduct.php and also appended as Annexure A to this Report.
10. Vigil Mechanism
The Company has an adequate and functional 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 genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct and seek 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. Vigil Mechanism provides adequate safeguards against victimization of persons who use such mechanism for whistle blowing in good faith and it also ensures that the interests of the person who uses such Mechanism are not prejudicially affected on account of such use. The Board of Directors affirms and confirms that no personnel have 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: https://www.enil.co.in at web link: https://www.enil.co.in/policies-and-code- of-conduct.php
11. Audit Committee
The Audit Committee of the Company consists of the following Directors as on the date of this Report:
? Mr. N. Kumar - Chairman (Independent NonExecutive Director)
? Mr. Ravindra Kulkarni (Independent Non Executive Director)
? Mr. Richard Saldanha (Independent Non Executive Director)
? Ms. Sukanya Kripalu (Independent Non- Executive 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.
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 consists 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)
During the financial year under review, the Committee met on June 15, 2021.
Brief description of terms of reference of the Committee inter-alia includes:
? Formulating and recommending 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;
¦ Recommending the amount of expenditure to be spent on the CSR activities to be undertaken by the Company;
? Monitoring the CSR Policy of the Company from time to time;
¦ Formulating and recommending to the Board, an Annual Action Plan in pursuance of its CSR Policy, which shall include:
• the list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;
• the manner of execution of such projects or programmes;
• the modalities of utilisation of funds and implementation schedules for the Provided projects or programmes;
• monitoring and reporting mechanism for the projects or programmes; and
• details of need and impact assessment, if any, for the projects undertaken by the company;
• Approving specific projects, either new or ongoing, in pursuance of the CSR Policy and the Annual Action Plan;
? Recommending to the Board any alteration in the Annual Action Plan approved by the Board along with reasonable justification;
¦ Monitoring, reviewing the progress of the CSR initiatives undertaken and reporting of the CSR activities to the Board from time to time;
¦ Satisfying the Board on the utilization of the funds disbursed for the purpose and in the manner approved by it;
¦ Reviewing and recommending to the Board, the Annual Report on CSR activities to be included in the Boards report;
¦ Reviewing and recommending to the Board, if and to the extent applicable, the need for impact assessment of the projects and appointment of impact assessment agency and the impact assessment report to be obtained by the Company from time to time;
¦ Undertaking such activities and carrying out such functions as may be provided under Section 135 of the Act and the rules issued thereunder.
CSR Policy development and implementation:
The CSR Policy is available on the Companys website at: https://www.enil.co.in at web link: https://www. enil.co.in/policies-and-code-of-conduct.php
CSR Policy Statement and Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure B to this Report.
13. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company 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)
¦ Ms. Sukanya Kripalu (Independent Non- Executive 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 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 or disclaimer. The Statutory Auditors of the Company have not reported any details in respect of frauds as specified under Section 143(12) of the Act.
The Members of the Company, at the Extraordinary General Meeting held on December 10, 2021, had approved the appointment of Walker Chandiok & Co LLP, Chartered Accountants (Walker Chandiok) (ICAI Firm Registration number - 001076N/ N500013) as the Statutory Auditors of the Company to hold office till the conclusion of the twenty third Annual General Meeting (AGM). As stated in the notice of the said
Extraordinary General Meeting, Walker Chandiok was appointed to fill the casual vacancy caused due to the resignation of the erstwhile Statutory Auditors - S. R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm Registration number - 101049W/ E300004). The term of appointment of Walker Chandiok will expire at the conclusion of the twenty third AGM. The Board of Directors has considered, approved and recommended the appointment of Walker Chandiok as the Statutory Auditors of the Company for a term of five consecutive years commencing from the conclusion of the twenty third AGM till the conclusion of the twenty eighth AGM.
Walker Chandiok has provided their consent for appointment as the Statutory Auditors of the Company along with a certificate, under Section 139 of the Act, inter-alia stating that they satisfy the criteria provided in Section 141 of the Act. Other relevant information has been furnished at the Resolution No. 4 read with the explanatory statement of the Notice convening the AGM proposing the appointment of Walker Chandiok as the Statutory Auditors of the Company.
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 2021-22. The Secretarial Audit Report for the financial year ended March 31, 2022 is appended as Annexure C-1 to this Report. The Secretarial Compliance Report for the financial year ended March 31, 2022 is appended as Annexure C-2 to this Report.
The Secretarial Audit Report dated May 6, 2022 and Secretarial Compliance Report dated May 6, 2022 do not contain any qualification, reservation or adverse remark or disclaimer.
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, 2023. 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 4,75,000 (Rupees four lakhs seventy five 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. 5 of the Notice convening the AGM for ratification of the remuneration payable to the Cost Auditors for the financial year ending on March 31, 2023.
Maintenance of cost records as specified by the Central Government under Sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company and accordingly, such accounts and records are made and maintained.
The Cost Audit Report for the financial year 202021 was filed on September 11, 2021. The Cost Audit Report for the financial year 2021-22 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:
(a) Conservation of energy:
(i) Steps taken or impact on conservation of energy and the steps taken by the Company for utilising alternate sources of energy:
- Energy Conservation: We increased the efforts already executed in the preceding years by regulating the electrical consumption at the transmitters, studios and offices, which has resulted in substantial savings in energy cost in the financial year under review.
- Optimization of office spaces: As a part of our continuous efforts in office space restructuring, we rationalised office space at more locations with an efficient office design using energy efficient electronic devices that has contributed in reduction of more than 40% in the energy consumption.
- We have maximized energy savings in AC units. We studied the air conditioner (AC) usage pattern in the studio and transmission sites and successfully reduced electricity consumption without any extra capital investment. AC units are set at optimum temperatures based on ambient conditions, e.g. Studio ACs are set at not lesser than 25 degrees temperature. This has helped achieve substantial savings. Transmitter power is optimally reduced in the night band when listenership is low, and the ambient temperature is lower. We continue to replace old conventional fixed speed ACs with Inverter/ VRV ACs for better energy savings.
(ii) Capital investment on energy conservation equipment: 58.63 lakhs
(b) Technology absorption:
(i) The efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution:
- Hub Station Optimization: Successfully implemented the first case of Hub station optimization at Pune for remote networked stations in Maharashtra, which was technologically achieved through Cloud streaming of audio content. This is a successful step towards centralized management and optimal use of manpower & resources. The other immediate effect of this has been the downsizing the Aurangabad office space and reduction in rentals and recurring operating expenses. This solution will soon be rolled out in other hub markets.
- Playout System Upgrade: We continued with the upgradation of our playout system to Zetta, adding 15 more Terrestrial stations this year with a focus on optimizing our broadcast network in the near future by using Zettas network management capability. This should help us with Centralized Management and reduced operating costs with coverage of more stations.
- RCS ZettaCloud on Triton: Implemented RCS ZettaCloud for playout of 39 deferred streams of 13 FM stations in 3 different time zones (PST, EST, GST) on the Triton audio streaming platform for Mirchi App.
- Infrastructure enhancement: With the focus on Digital businesses, we expanded the infrastructure of our existing private cloud. This not only augmented our goal of space and energy savings, but also gave us the complete control of setting up new playout systems instantly by using the scalability & flexibility parameters of the private cloud
- Enterprise Wi-Fi Implementation: Migrated 3 more locations- Bangalore, Kolkata and Pune to Enterprise Wi-Fi, thereby enhancing productivity and strengthening security.
- Two Factor authentication implemented for WFH users using SSL VPN providing increased security to user data and systems
(ii) Imported technology (imported during last three years reckoned from the beginning of the financial year): The Company has not imported any new technology in this financial year. Nevertheless, the Company has continued to use the latest equipment and software for its business activities.
(iii) The expenditure incurred on Research & Development (R & D):
The Company has not spent any amount towards research and development activities. The Company has been active in harnessing the latest technology available in the industry.
(c) 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.
I in lakhs
|Financial Year 2021-22||Financial Year 2020-21|
|Foreign exchange earnings||643.91||1,652.02|
|Foreign exchange outgo||1,212.05||1,082.85|
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 and Executive Director of the Company do not receive any remuneration or commission from the Companys holding or subsidiary companies.
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 second 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 by the Members in electronic mode basis the request being sent on firstname.lastname@example.org without payment of fee and same will also be available during the 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. Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return of the Company is available at the Companys website: (https://www.enil.co.in) at url: https://www.enil.co.in/financials-annual-reports. php.
22. Share Capital & Listing of Securities
During the financial year under review, the Company has not issued:
? any shares, debentures, bonds, warrants or securities;
¦ 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.
During the financial year under review, the Company has not bought back its shares, pursuant to the provisions of Section 68 of the Companies Act, 2013 and Rules made thereunder.
No shares are held in trust for the benefits of employees. There is no change in the capital structure of the Company during the financial year under review.
The equity shares of the Company are listed 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.
The Company has adopted the Integrated Reporting. The information related to the Integrated Reporting forms part of the Management Discussion & Analysis and Integrated Reporting has also been hosted on the website of the Company: (https://www.enil.co.in) at url: https://www.enil.co.in/financials-annual-reports. php.
24. Business Responsibility Report
As per the Regulation 34 of the Listing Regulations, the Company has published a separate Business Responsibility Report (BRR) for the financial year under review. 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 E 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. Secretarial Standards
The Company complies with the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
27. Directors Responsibility Statement
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts for the financial year ended on March 31, 2022, 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, 2022 and of the loss 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.
28. 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.
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, Members of the Company granted approval for the contracts/ arrangements/ transactions entered into and/ or to be entered into with BCCL relating to the transfer and / or availing of resources, services or obligations, for each of the five financial years of the Company commencing from April 1, 2020, exceeding ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company but not exceeding the aggregate value of 200 crore (Rupees two hundred crore only) per annum, on such terms and conditions as may be mutually agreed between the Company and BCCL.
Details of the Material Related Party Transactions 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 F to 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. co.in (url: https://www.enil.co.in/policies-and-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.
29. 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 G to this Report and also uploaded on the Companys website at www.enil.co.in (url: https:// www.enil.co.in/policies-and-code-of-conduct.php).
30. 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 2021-22 are provided in the financial statements. Please refer to the Note 8 to the standalone financial statements for details of investments made by the Company.
31. Risk Management
The Board of Directors is responsible for ensuring that the Company has appropriate systems of control in place - in particular, systems for risk management, financial and operational control, and compliance with the laws and relevant standards. Accordingly, the Board oversees the framing, implementing and the monitoring of the risk management plan for the Company. The Board also ensures the integrity of the Companys accounting and financial reporting systems, including the independent audit.
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 for the financial year under review has been carried out by Deloitte Touche Tohmatsu India Limited Liability Partnership (Deloitte), the independent Internal Auditors. Internal Audit covers key radio stations at pan India level and the 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.
The Company has adopted a Risk Management Policy pursuant to the provisions of Section 134 and all other applicable provisions of the Companies Act, 2013 and Listing Regulations and also established related procedures to inform Board Members about the risk assessment and minimization procedures. The Company has a strong Enterprise Risk Management framework which is administered by the Senior Management team and monitored by the Risk Management Committee. Major risks are identified and the mitigation measures are put in place, and the same are also reported to the Audit Committee and Board of Directors along with the action taken report. The 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 Risk Management Committee of the Company comprises of the following members as on the date of this Report:
? Mr. Vineet Jain (Non- Executive Chairman)
¦ Mr. Prashant Panday (Managing Director & CEO)
¦ Mr. N. Subramanian (Executive Director & Group CFO)
¦ Mr. N. Kumar (Independent Director) - inducted with effect from June 15, 2021
¦ Mr. Nandan Srinath (Executive President) - inducted with effect from June 15, 2021
Brief description of terms of reference and other relevant details of the Risk Management Committee have been furnished in the Report on Corporate Governance.
32. Internal Financial Controls
The Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The Company has in place adequate internal financial controls with reference to the financial 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 the adequacy and effectiveness of the Companys internal control system including internal financial controls.
33. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and applicable accounting standards, the audited consolidated financial statements are provided and form part of the Annual Report.
34. Subsidiary Companies
The Company has the following subsidiaries:
? Alternate Brand Solutions (India) Limited (ABSL), a 100% subsidiary based in India. ABSL recorded a total income of 89.52 lakhs during the financial year ended March 31, 2022. Profit after Tax stood at 32.57 lakhs for the financial year ended March 31, 2022.
¦ Entertainment Network, INC (EN, INC) and a step- down subsidiary, Entertainment Network, LLC (EN, LLC) based in the United States of America. EN, INC is a 100% subsidiary of the Company. EN, LLC is the 100% subsidiary of EN, INC. EN, INC recorded a total consolidated income of 1,000.46 lakhs during the financial year ended March 31, 2022. Consolidated loss after Tax stood at (617.88) lakhs for the financial year ended March 31, 2022.
¦ Global Entertainment Network Limited (GENL) (A company incorporated under the laws of the State of Qatar having its registered office in Doha, Qatar). In March 2021, the Company acquired 49% equity of GENL. The remaining 51% of equity stake is owned by another Company (Marhaba FM). Basis the shareholding agreement executed by the Company with Marhaba FM, the Company has controlling interest over GENL. As a result, the investment made in GENL is treated as an investment in subsidiary as per Ind AS 110- Consolidated Financial Statements. GENL recorded a total income of 472.86 lakhs during the financial year ended March 31, 2022. Profit after Tax stood at 38.03 lakhs for the financial year ended March 31, 2022.
¦ Mirchi Bahrain WLL based in the Kingdom of Bahrain, a 100% subsidiary of the Company. Mirchi Bahrain WLL became a wholly owned subsidiary of the Company in April 2021. Mirchi Bahrain WLL recorded a total income of 393 lakhs during the period ended March 31, 2022. Consolidated loss after Tax stood at (315.43) lakhs for the period ended March 31, 2022.
As per Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of the Subsidiary Companies is 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 subsidiaries.
The Company shall make available the financial statements and the related detailed information of its subsidiaries to any Member of the Company or its subsidiaries 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 by the Members in electronic mode basis the request being sent on email@example.com without payment of fee and same will also be available during the AGM. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies.
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 at the Companys website: www.enil.co.in at https://www.enil.co.in/policies-and-code-of- conduct.php
35. Significant and 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.
36. 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. For building awareness in this area, the Company has been conducting induction/ refresher programmes on a continuous basis. The Company has in place a Policy for prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, and the Company has complied with the applicable provisions of the said Act. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the financial year under review, two complaints pertaining to sexual harassment were reported to the Internal Complaints Committee of the Company. After detailed investigation and following due procedure under the applicable law, guidelines and regulations, the said two complaints were appropriately dealt with during the financial year under review and appropriate action was taken.
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 for the consistent contribution made by the employees at all levels through their hard work, dedication, solidarity and co-operation.
|For and on behalf of the Board of Directors|
|Mumbai, May 6, 2022||(DIN: 00003962)|
Entertainment Network (India) Limited,
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg, Lower Parel (West),
Mumbai - 400 013.