Saregama India Director Discussions


Your Directors are pleased to present the Seventy-Sixth Annual Report of Saregama India Limited along with the Revised audited financial statements for the year ended 31st March, 2023.

1. FINANCIAL HIGHLIGHTS

A) The performance of your Company for the year ended 31st March, 2023 is summarized below:

Consolidated Standalone Consolidated Standalone
Year ended 31st March, 2023 Year ended 31st March, 2023 Year ended 31st March, 2022 Year ended 31st March, 2022
Total income 79,025.25 74,848.47 61,101.97 60,171.84
Profit/(Loss) from continuing operations 24,807.77 24,317.62 21,618.25 20,199.18
Exceptional item NIL NIL NIL NIL
Provision for Contingencies NIL NIL NIL NIL
Profit before tax from continuing operations 24,807.77 24,317.62 21,618.25 20,199.18
Provision for Taxation
Current tax 6,270.99 6,186.07 5,029.14 4986.3
Deferred Tax Charged / (Credit) 31.59 83.72 149.26 171.44
Profit for the year from continuing operations 18,505.19 18,047.83 16,439.85 15,041.44
Profit before tax from discontinued operations - - -1,177.01 -
Tax expense of discontinued operation - - -1.72 -
Profit from discontinued operation after tax - - -1,175.29 -
Total profit for the year 18,505.19 18,047.83 15,264.56 15,041.44
Interim Dividend 5,784.28 5,784.28 5,784.28 5,784.28
Transfer to general reserve NIL NIL NIL NIL
Free Reserves 1,22,253.76 1,21,582.17 1,17,058.66 1,16,641.12

Your Board is pleased to report a profit of Rs. 18,047.83 Lakhs on a standalone basis for the FY 2022-23.

B) Reserves

There is no amount proposed to be transferred to the Reserves.

C) Operations/ State of Companys Affairs/ Nature of Business

The operations/ state of the companys affairs/ nature of business forms part of the Management Discussion and Analysis Report forming part of this Annual Report.

D) Dividend

The Board of Directors of the Company at their Meeting held on Friday, 20th January, 2023 has declared an Interim Dividend of Rs. 3/- per equity share (i.e 300 % on the face value of Re. 1/- per equity share), for the financial year ended 31st March, 2023. The total payout towards equity dividend for FY 2022-23 aggregated to Rs. 5,784.28 Lakhs. The said Interim Dividend was paid on and from Tuesday, 14th February, 2023.

The dividend recommendation is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) is available on the Companys website and can be accessed at:

(Weblink: https://r.sareqama.com/resources/pdf/investor/dividend_distribution_policy_sareqama_india_limited.PDF)

There has been no change in the policy during the year. The Notice convening the 76th Annual General Meeting (AGM) of the Members of the Company includes an item no. 2 for confirmation of the said interim dividend.

E) Subsidiaries, Associate and Joint Ventures

The Company has 5 subsidiaries and 1 Joint Venture (under liquidation effective 19th September, 2016) as on 31st March, 2023. Two Subsidiaries namely, Open Media Network Private Limited and Digidrive Distributors Limited have been ceased to be the subsidiary of Saregama India Limited effective from appointed date (i.e. 1st April, 2022) pursuant to the Scheme of Arrangement between Saregama India Limited and Digidrive Distributors Limited and their respective shareholders and creditors, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and as approved by the Honble National Company Law Tribunal, Kolkata Bench.

F) Scheme of Arrangement Between Saregama India Limited And Digidrive Distributors Limited

a. The Company had filed an application before the Honble National Company Law Tribunal, Kolkata Bench (NCLT) to obtain orders for convening and/or dispensing meetings of shareholders and creditors of Saregama India Limited (Demerged Company) and Digidrive Distributors Limited (Resulting Company) in connection with a Scheme of Arrangement (Scheme) proposed to be made between the Demerged Company and the Resulting Company and their respective shareholders and creditors under Sections 230 to 232 read with other applicable provisions of the Companies Act, 2013 (Act) for demerger of the Demerged Undertaking, being the E-Commerce Distribution Business (as defined in the Scheme) of the Demerged Company, to the Resulting Company in the manner and on the terms and conditions stated in the said Scheme.

b. By an order dated 18th November, 2022, the Honble NCLT directed convening and holding of meeting of Equity Shareholders of the Demerged Company on Wednesday, 21st December, 2022 at 11:00 a.m. through video conferencing or other audiovisual means, for the purpose of approving the proposed Scheme. At the said NCLT convened Equity Shareholders meeting, the Equity Shareholders of the Demerged Company approved the said Scheme by requisite majority.

c. Thereafter, the Demerged Company and the Resulting Company filed confirmation petition under Section 230(6) read with Section 232(3) of the Act before the Honble NCLT seeking orders/ directions for sanction of the proposed Scheme. The final hearing of the confirmation petition was fixed on 28th April, 2023. After the hearing, the Honble NCLT reserved the confirmation petition for pronouncement of order. On 22nd June, 2023, the Honble NCLT sanctioned the Scheme and the appointed date fixed by the Honble NCLT to give effect to the Scheme is 1st April, 2022. The certified copy of the order sanctioning the Scheme was obtained by the Company on 26th June, 2023.

d. The Demerged Company has duly filed certified copy of the order of the Honble NCLT, sanctioning the Scheme, by filing Form INC -28 with the Registrar of Companies, West Bengal on 12th July, 2023 for giving effect to the Scheme.

e. In terms of the Scheme, the Demerged Undertaking, being the E-Commerce Distribution Business along with other identified non-core assets (as defined in the Scheme) is being demerged, transferred and vested from the Demerged Company into the Resulting Company, on a going concern basis (with effect from the Appointed Date 1st April, 2022) and in consideration thereof, the Resulting Company shall issue its equity shares to the equity shareholders of the Demerged Company in the manner as provided for in the Scheme as follows:

1 (One) fully paid up equity share of Rs. 10/- (Rupees Ten only) each of the Resulting Company, credited as fully paid up, for every 5 (Five) equity shares of Re. 1/- (Rupee One only) each held in the Demerged Company

f. In terms of the Scheme, upon allotment, the entire pre-scheme share capital of the Resulting Company as held by the Demerged Company, shall be cancelled and the Resulting Company will cease to be a subsidiary of the Demerged Company. Further, pursuant to the Scheme becoming effective and upon the investment held by the Demerged

Company in Open Media Network Private Limited (OMNPL) being demerged and transferred as part of the E-Commerce Distribution Business along with other identified non-core assets to the Resulting Company, OMNPL ceased to be a subsidiary of the Demerged Company.

g. The Demerged Company in consultation with the Resulting Company mutually fixed Thursday, 27th July 2023, as the Record

Date for the purpose of determining the shareholders of the Demerged Company, who will receive the equity shares of the Resulting Company, pursuant to the Scheme. The said equity shares issued by the Resulting Company will be listed on the BSE Limited and the National Stock Exchange of India Limited.

G) Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries have been prepared in accordance with the provisions of the Companies Act, 2013 (the Act) read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the SEBI Listing Regulations and it forms part of the Annual Report. Pursuant to Section 129 (3) of the Act, a statement containing the salient features of the financial statements of the subsidiary companies for the FY 2022-23 is attached to the Financial Statements in Form AOC-1.

Further pursuant to the provisions of Section 136 of the Act, the standalone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company at www.saregama.com under the section Investor Relations. Members desirous of obtaining the Accounts of the Companys subsidiaries may obtain the same upon request by email to the Companys email id - co.sec@saregama.com.

2. SHARE CAPITAL

At the beginning of the financial year, the issued, subscribed and paid-up Equity Share Capital of the Company was Rs. 19,28,09,490 divided into 1,92,80,949 shares of Rs. 10/- each.

Further, pursuant to the Special Resolution passed by the Members of the Company by way of Postal Ballot on 31st March, 2022, the Company has sub-divided (split) its equity share of the face value of Rs. 10/- each (fully paid-up) into 10 (ten) equity shares of face value of Re. 1 /- each (fully paid-up).

At the end of the financial year, the issued, subscribed and paid-up Equity Share Capital of the Company was Rs. 19,28,09,490 divided into 19,28,09,490 shares of Re. 1/- each.

3. CORPORATE GOVERNANCE

Your Company has adopted a Code of Conduct (the Code) for its Directors and Senior Management personnel, who have affirmed compliance with the Code. The adoption of the Code stems from the fiduciary responsibility that the Directors and the Senior Management have towards the stakeholders of the Company. Your Board of Directors are committed to good governance practices based on principles of integrity, fairness, transparency and accountability for creating long-term sustainable shareholder value.

Further, a separate Report on Corporate Governance as prescribed under the SEBI Listing Regulations together with a certificate from M/s. MR and Associates, Practicing Company Secretary is set out in the Annexure - E forming part of this Annual Report.

4. QUALIFIED INSTITUTIONAL PLACEMENT (QIP)

During the year ended 31st March, 2022, the Company had allotted and issued 18,50,937 equity shares of Rs. 10/- each at an issue price of Rs. 4,052/- per equity share, aggregating to Rs. 750 Crores (including securities premium of Rs. 748.15 Crores) on 10th November, 2021. The aforesaid issuance of equity shares was made through a QIP in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations) as amended, Section 42, Section 62, and other relevant provisions of the Act.

Out of the total funds raised through QIP, the unutilized funds aggregating to Rs. 710.48 Crores were temporarily invested in liquid investments i.e., mutual funds and bank deposits and that there was no deviation(s) or variation(s) in the use of proceeds of the QIP.

5. SUB-DIVISION (SPLIT) OF EQUITY SHARES OF THE COMPANY

Pursuant to the Special Resolution passed by the Members of the Company by way of Postal Ballot through electronic means on 31st March, 2022, the Company has sub-divided its Equity Shares of face value of Rs. 10/- each (fully paid up), into 10 (Ten) Equity Shares of face value Re. 1/- each (fully paid-up), effective from 28th April, 2022. Hence, shares have now been adjusted on account of sub-division of share done by the Company.

6. ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31st March, 2023 is available on the website of the Company and can be accessed at https://www.saregama.com/static/investors.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL/ SENIOR MANAGEMENT PERSONNEL

A) Retire by Rotation

In accordance with the provisions of the Act none of the Independent Directors are liable to retire by rotation.

As per the provisions of Section 152 of the Act, Mrs. Preeti Goenka (DIN: 05199069), Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks herself for re-appointment as a Director of the Company. The Board on the recommendation of Nomination and Remuneration Committee has recommended the said reappointment.

B) Key Managerial Personnel

The following are the changes in the Key Managerial Personnel of the Company, as per the provisions of Section 2(51) and Section 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Change in Financial Officer (CFO): During the year under review, the Company has appointed Mr. Pankaj Mahesh Chaturvedi as the CFO with effect from 11th April, 2022, and Mr. Vineet Garg, the erstwhile CFO of the Company relinquished his office as the CFO of the Company with effect from 10th April, 2022.

Company Secretary (CS): During the year under review, Ms. Kamana Goenka resigned as the Company Secretary & Compliance Officer with effect from 10th June, 2022 due to personal reasons. Ms. Priyanka Motwani, a member of the Institute of Company Secretaries of India, was appointed as the Company Secretary & Compliance Officer of the Company with effect from 2nd August, 2022.

C) Remuneration / Commission drawn from Holding / Subsidiary Company

None of the Directors of the Company have drawn any remuneration/commission from the Companys holding Company/ subsidiary Companies.

D) Declaration by Independent Directors

The Company has received the necessary declarations from each of the Independent Director under Section 149(7) of the Act, that he/she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 25(8) of the SEBI Listing Regulations and there has been no change in the circumstances which may affect their status as independent director during the year. The Board has taken on record these declarations after undertaking the due assessment of the veracity of the same.

E) Board Evaluation

Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI Listing Regulations, the Board of Directors (Board) has carried out an annual evaluation of its performance and that of its committees and individual Directors.

The Board evaluation was conducted through questionnaire designed with qualitative parameters and feedback based on ratings.

The criteria for performance evaluation of the Board included aspects like Board composition and structure; effectiveness of Board processes, information and functioning etc. The criteria for performance evaluation of Committees of the Board included aspects like the composition of Committees, effectiveness of committee meetings etc. The criteria for performance evaluation of the individual Directors included aspects on contribution to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the opinion of the Board, the Independent Directors of the Company possess relevant expertise and experience (including the proficiency).

F) Independent Directors Meeting

A separate meeting of the Independent Directors without the presence of the Chairman, the Managing Director or other Non-Independent Director(s) or any other Management Personnel was held on 19th January, 2023.

The Independent Directors reviewed the performance of Non-Independent Directors, Committees of the Board and the Board as a whole along with the performance of the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

G) Familiarisation Programme for Independent Directors

In accordance with the Code of Conduct for Independent Directors specified under the Act and the SEBI Listing Regulations, the Company has in place a familiarisation programme for all its Independent Directors. Such familiarisation programmes help the Independent Directors to understand the Companys strategy, business model, operations, markets, organisation structure, risk management etc. and such other areas as may arise from time to time. The policy on the familiarisation programmes imparted to the Independent Directors is posted on the website of the Company and may be accessed at:

(Weblink: https://r.sareqama.com/resources/pdf/investor/familiarization_proqramme_for_independent_director.pdf)

8. POLICIES

A) Vigil Mechanism/Whistle Blower Policy

In compliance with the provisions of Section 177(9) of the Act and SEBI Listing Regulations, the Company has framed a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. Besides, as per the requirement of Clause 6 of Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations as amended by SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company ensures to make employees aware of such Whistle blower Policy to report instances of leak of unpublished price sensitive information. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee and there was no such reporting during the FY 2022-23. The policy of vigil mechanism is available on the Companys website and can be accessed at:

(Weblink: https://r.saregama.com/resources/pdf/investor/whistle_blower_policy.pdf)

B) Nomination and Remuneration Policy

In compliance with the requirements of Act and Rules made thereunder and pursuant to Regulation 19 of the SEBI Listing Regulations read with Schedule II Part D to the said Regulations, the Board of Directors has a Nomination and Remuneration Policy for its Directors, Key Managerial Personnel, Functional Heads and other employees of the Company. The said Policy is available on the Companys website and can be accessed at:

(Weblink: https://r.sareqama.com/resources/pdf/investor/Nomination_and_remuneration_policy.pdf)

The salient features and objectives of the policy are as follows:

• To formulate the criteria and terms to determine qualifications, attributes and independence of Directors;

• To identify the qualification, key attributes and profile required of persons who may be appointed in Senior Management and Key Managerial positions;

• To recommend remuneration of the Directors, Key Managerial Personnel and Senior Management employees and other employees based on the Companys size of business, financial position and trends and practices prevailing in similar companies in the industry;

• To devise mechanism and carry out evaluation of the performance of Directors;

• To devise and achieve diversity on the composition of Board, an essential element to support quality of performance;

• To prepare policies or principles to retain, motivate and promote talent and create a sense of participation and ownership;

• To carry out such other functions as is mandated by Board of Directors from time to time or is enforced by any statutory notification, amendment, or modification as may be applicable;

• To perform such other functions as may be necessary or appropriate for the performance of duties.

C) Corporate Social Responsibility (CSR)

In accordance with Section 135 of the Act, as amended read with the Notification issued by the Ministry of Corporate Affairs and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy, a brief outline of which, along with the required disclosures, is given in Annexure - A, which is annexed hereto and forms a part of the Boards Report.

The Company, along with other companies of the Group, has set up the RP-Sanjiv Goenka Group CSR Trust to carry out CSR activities. The detail of the CSR Policy is also posted on the Companys website and may be accessed at:

(Weblink: https://r.sareqama.com/resources/pdf/investor/csr_policy.pdf)

D) Dividend Distribution Policy

The Company has adopted a Dividend Distribution policy in terms of Regulation 43A of SEBI Listing Regulations which is available on the Companys website can be accessed at:

(Weblink: https://r.sareqama.com/resources/pdf/investor/dividend_distribution_policv_SIL.pdf)

E) Risk Management Policy

The Company has constituted a Risk Management Committee consisting of Board Members and Senior Manager Personnel which is authorised to monitor and review Risk Management plan and risk certificate. The Committee is also empowered, inter alia, to review and recommend to the Board the modifications to the Risk Management Policy.

The Company has prepared a Risk Management policy to identify, evaluate the internal and external risks and opportunities in particular financial, operational, sectoral, sustainability (particularly, ESG related risks), information and cyber security risks. The policy also includes the business continuity plan and the measures to be undertaken for risk mitigation including systems and processes for internal control of identified risks.

Risk Management Policy enables the Company to proactively manage uncertainties and changes in the internal and external environment to limit negative impacts and capitalise on opportunities. The Company has laid down a comprehensive Risk Assessment and Minimisation Procedure in accordance with the requirements of the Act and the SEBI Listing Regulations, which is reviewed by the Risk Management Committee, and approved by the Board from time to time.

9. BOARD MEETINGS AND AUDIT COMMITTEE COMPOSITION

During the period under review, 5 (five) Board Meetings were held, details of which are given in the Corporate Governance Report forming part of this Annual Report as Annexure - E. The intervening gap between the meetings was within the period prescribed under the Act and Regulation 17 of SEBI Listing Regulations.

At the beginning of the financial year, the Board had Nine (9) committees, namely, Audit Committee (AC), Nomination and Remuneration Committee (NRC), Corporate Social Responsibility (CSR) Committee, Stakeholders Relationship Committee (SRC), Risk Management Committee (RMC), Finance Committee, Fund Raising Committee, Sub-Committee(Share transfer Committee) and Committee of Independent Directors.

During the financial year, the Fund Raising Committee, which was previously established on 16th September 2021, to oversee and manage matters related to fundraising activities, has been dissolved on 2nd August, 2022.

Details of the composition of the Board and its Committees and changes therein, and details of the Meetings held, attendance of the Directors at such Meetings and other relevant details are provided in the Corporate Governance Report forming part of this Annual Report as Annexure - E.

Further there were no instances where the Board has not accepted the recommendations made by the Audit Committee during the year under review.

The Audit Committee comprises of following members:

Name of the Member Position Category of Director
Mr. Umang Kanoria Chairperson Non-executive Independent Director
Mr. Noshir Framjee Member Non-executive Independent Director
Mr. Santanu Bhattacharya Member Non-executive Independent Director

Note - Further, details relating to the Audit Committee are provided in the Corporate Governance Report forming part of the Annual report.

10. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to the Report as Annexure - B.

Details of employee remuneration as required under provisions of Section 197 of the Act and the Rule 5(2) and 5(3) of the aforesaid Rules are provided in the Annexure forming part of the Report. In terms of the proviso to Section 136 (1) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. The said annexure is also available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary at co.sec@saregama.com.

None of the employees listed in the said Annexure are related to any Director of the Company.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of the loans given, investments made, guarantees given or securities provided during the year and the purpose for which the loans / guarantees / securities are proposed to be utilized by the recipient of such loan / guarantee / security is given in Note 11.5 and 43 to the standalone financial statements.

12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements or transactions entered by the Company with the Related Parties during the financial year were in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. All such contracts or arrangements, were entered into in the ordinary course of business and at arms length basis and approved by the Audit Committee.

Further, there were no material contracts or arrangements or transactions entered by the Company with the Related Parties during the financial year. Therefore, the Form AOC-2 is not applicable on the Company.

13. RISK MANAGEMENT

Risk Management is the process of identification, assessment and prioritisation of risks followed by coordinated efforts to minimise, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities.

The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a companys capacity to create sustainable value is the risks that the company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a companys operating environment and they emerge on a regular basis. The Companys Risk Management process focuses on ensuring that these risks are identified on a timely basis and addressed.

The Company is well aware of the above risks and as part of business strategy has put in a mechanism to ensure that they are mitigated by timely action. The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage. In the opinion of the Board, there are no such risks, which may threaten the existence of the Company.

14. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal financial control systems in all areas of operation. The Board of Directors have adopted policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and timely preparation of reliable financial information. The services of internal and external auditors are utilised from time to time, in addition to the in-house expertise and resources. The Company continuously upgrades these systems in line with the best practices in the industry.

15. AUDITORS

A) Statutory Auditors

In terms of Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s B S R & Co. LLP, Chartered Accountants (ICAI Registration No. 101248W/W-100022), were re-appointed as the Statutory Auditors of the Company for a 2nd term of five consecutive years, from the conclusion of the 75th AGM till the conclusion of the 80th AGM of the Company to be held in the year 2027. The Statutory Auditors have confirmed they are not disqualified from continuing as Auditors of the Company.

The Report given by M/s B S R & Co. LLP, Chartered Accountants on the financial statement of the Company for the year 20222023 is part of the Annual Report. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark, or disclaimer. During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act.

B) Internal Auditors

Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, M/s. PricewaterhouseCoopers Services LLP, were appointed as Internal Auditors to undertake internal audit of the Company for FY 2022-23.

C) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s M R and Associates, Practicing Company Secretaries, were appointed as the Secretarial Auditor to undertake Secretarial Audit of the Company for the FY 2022-23.

The Secretarial Audit Report for the FY 2022-23 as required under the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, is set out in Annexure - C to this Report.

D) Cost Auditors

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. Shome & Banerjee, Cost Accountants (Firm Registration No 000001) as Cost Auditors to conduct the audit of Companys cost records for the financial year ended 31st March, 2023.

Further, Pursuant to section 148 and applicable provisions of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to appoint a cost auditor for audit of cost records maintained by the Company in respect of the financial year ending 31st March, 2024. The Directors of the Company have on the recommendation of Audit Committee appointed M/s. Shome and Banerjee, Cost Accountants, as the Cost Auditor of the Company to audit the cost records for the financial year ending 31st March, 2024. Remuneration payable to the Cost Auditor is subject to ratification by the members of the Company. Accordingly, a resolution seeking members ratification for the remuneration payable to M/s. Shome and Banerjee, Cost Accountants, is included in the Notice as item no. 4 convening the 76th Annual General, along with relevant details, including the proposed remuneration.

16. MAINTENANCE OF COST RECORDS

Pursuant to the provisions of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain Cost Records under Rule 3 of the said Rules. Accordingly, the Company has duly maintained the Cost Records in the format prescribed under Rule 5 of the said Rules.

17. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliances with the provisions of section 134(3)(c) read with section 134(5) of the Act in the preparation of the annual accounts for the year ended on 31st March, 2023 and to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2023, the applicable accounting standards have been followed and there are no material departures;

b) appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) internal financial controls laid down by the Directors have been followed by the company and such internal financial controls are adequate and were operating effectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws are in place and such systems were adequate and operating effectively.

18. 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 is given below:

Particulars Current Year Previous Year
Foreign Exchange used 6,233.61 6,651.25
Foreign Exchange earned 27,798.58 17,909.74

19. RATIO ANALYSIS

KEY RATIOS STANDALONE
March 2023 March 2022
Net Profit Margin 26.0% 26.0%
Operating Profit Margin 29.0% 31.0%
Debt to Equity Ratio - -
Interest Coverage Ratio 860.9 572.2
Current Ratio 4.1 5.0
Debtor Turnover (Days) 79.5 69.0
Inventory Turnover (Days) 209.8 154.9
Return on Networth 14.6% 12.7%

Note:

1 Inventory turnover ratio is higher due to lower retail sales volume and higher number of digital films under production.

2 Interest Coverage ratio and Debt-Equity Ratio are not relevant for the current year as company has zero debt as on 31st March, 2023

3 Increase in Return on Networth is due to high profits for the year.

20. EMPLOYEES STOCK OPTION SCHEME 2013

The Company grants share-based benefits to eligible employees with a view to attract and retain the best talent, encourage employees to align individual performances with Company objectives, and to promote increased participation by the employees in the growth of the Company. With a view to providing an opportunity to the employees of the Company to be a part of the growth story of Company, they had introduced the Saregama Employee Stock Option Scheme 2013 (Scheme). The Scheme is applicable to all eligible employees and directors of the Company and its subsidiary companies. The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended (SBEB&SE Regulations).

At the Meeting of the Board of Directors held on 27th July 2023, subject to the approval of Members of the Company, the approval of the board of directors was accorded to the amendment of the Scheme to incorporate the following: (i) changes to the clauses of the Scheme which accord ease in administering the Scheme; (ii) changes to the clauses relating to vesting period, i.e., such that the vesting criteria and period of the options granted to an eligible employee shall be determined by the Nomination and Remuneration Committee and communicated to the eligible employees in the respective letter of grant.; (iii) clarification to the provisions relating to treatment of options in case of corporate action and providing clarification thereof; (iv) increase in the number of options available for grant under the Scheme from 5% of the issued and subscribed share capital of the Company on the date of the introduction of the Scheme, 26th July, 2013 to 5% of the issued and subscribed share capital of the Company on the date of this special resolution, that is as on 31st August, 2023; and (v) changes to certain clauses in order to bring the provisions of the Scheme in line with the SBEB&SE Regulations, including the manner in which options are to be dealt with in the event of death or permanent disability of an employee.

During the period under review, the Nomination and Remuneration Committee granted 14,00,000 stock options to the eligible Employees under the Scheme. The Company, during the year, allotted directly / through the employee welfare trust, 1,80,000 fully paid equity shares, upon exercise of the stock options by eligible employees under the Scheme. Applicable disclosures relating to Employees Stock Options as at 31st March, 2023, pursuant to SBEB&SE Regulations, have been placed on the website of the Company at https://www.sareqama.com/static/investors.

The Certificate from the Secretarial Auditors of the Company certifying that the Scheme is being implemented in accordance with the SBEB&SE Regulations shall be placed at the Annual General Meeting.

21. SHARES IN ABEYANCE

Out of 53,38,628 equity shares of face value Rs. 10/- each issued for cash at a premium of Rs. 35/- (issue price- Rs. 45/-) pursuant to the Rights Issue in 2005, allotment of 5,290 equity shares of face value Rs. 10/- each (equivalent to 52,900 equity shares of face value Re. 1/- each as on 31st March, 2023 after considering the effect of sub-division) (relating to cases under litigation/ pending clearance from the concerned authorities) are kept in abeyance as on 31st March, 2023.

22. LOAN FROM DIRECTOR OR DIRECTORS RELATIVES

During the year under review, there is no loan taken from the Directors or their relatives by the Company.

23. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Regulation 34 of SEBI Listing Regulations requires top 1000 listed entities based on market capitalization (calculated as on 31st March of every financial year), a Business Responsibility and Sustainability Report describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified by the SEBI from time to time.

The BRSR seeks disclosure on the performance of the Company against nine principles of the National Guidelines on Responsible Business Conduct (NGRBCs). Since Saregama India Limited falls in Top 1000 listed entities as on 31st March, 2023, Business Responsibility and Sustainability Report for the year ended 31st March, 2023 as stipulated under Regulation 34(3) of SEBI Listing Regulations is separately given and forms part of the Annual report as Annexure-D.

24. MANAGEMENT DISCUSSION AND ANALYSIS

In compliance with Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis for the year under review is presented in a separate section forming part of this Annual Report.

25. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no significant material orders passed by Regulators, Courts, or Tribunals that would impact the going concern status of the Company and its future operations.

Furthermore, there have been no material changes or commitments that could affect the financial position of the Company between the end of the Financial Year to which the Financial Statements relate and the date of this report.

26. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively issued by the Institute of Company Secretaries of India.

27. PREVENTION OF SEXUAL HARASSMENT

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The said Committee has been set up to redress complaints received regarding sexual harassment at the workplace.

During the period under review, the Company received one sexual harassment complaint, which was addressed by dismissing the individual involved in response to the reported incident. As of 31st March, 2023, there are no ongoing cases.

28. GENERAL

Your Directors state that:

a) the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

b) there are no instances of fraud reported by the Auditors during the financial year ended 31st March, 2023.

c) since the Company is not a manufacturing company, the disclosure related to conservation of energy and technology absorption is not applicable.

d) the Company has not issued any shares with differential voting rights as per the Act.

e) the Company has not issued any sweat equity shares under the Act.

f) there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

29. ACKNOWLEDGEMENT

Your Company has been able to operate responsibly and efficiently because of the culture of professionalism, creativity, integrity, ethics, good governance and continuous improvement in all functions and areas as well as the efficient utilization of the Companys resources for sustainable and profitable growth.

Your Directors would like to express their sincere appreciation to its stakeholders, financial institutions, bankers and business associates, Government authorities, customers and vendors for their co-operation and support and looks forward to their continued support in future. Your Directors also place on record, their deep sense of appreciation for the committed services by the employees of the Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Dr. Sanjiv Goenka Vikram Mehra
Chairman and Non-Executive Director Managing Director
DIN: 00074796 DIN: 03556680
Date: 27th July, 2023 Date: 27th July, 2023
Place: Kolkata Place: Kolkata