Saregama India Ltd Directors Report.

Your Directors are pleased to present the Seventy-Fourth Annual Report of Saregama India Limited along with the audited accounts for the year ended 31st March, 2021.

1. FINANCIAL INFORMATION

A) The performance of your Company for the year ended 31st March, 2021 is summarized below:

(Rs In lakhs)

Consolidated Standalone Consolidated Standalone
Year ended 31st March, 2021 Year ended 31st March, 2021 Year ended 31st March, 2020 Year ended 31st March, 2020
Total income 47,281.63 46,332.60 53,270.39 51,159.65
Profit/(Loss) from operations 15,190.64 14,544.50 6,034.77 6,578.96
Profit before tax 15,190.64 14,544.50 6,034.77 6,578.96
Provision for Taxation
Current tax 3,773.08 3,754.55 2,013.96 2,008.33
Deferred Tax Charged / (Credit) 71.10 88.16 -328.64 -328.64
Net profit (after tax and exceptional items) 11,346.46 10,701.79 4,349.45 4,899.27
Proposed Dividend (including tax thereon) 3,485.60 3,485.60 261.39 261.39
Transfer to general reserve NIL NIL NIL NIL
Free Reserves 32,332.56 33,978.98 24,731.85 26,934.67

Your Board is pleased to report a profit of Rs 10,701.79 lakhs on a standalone basis for the year 2020-21.

B) RESERVES

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

C) OPERATIONS/ STATE OF Company AFFAIRS/NATURE OF BUSINESS

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

D) DIVIDEND

Your Company wealth distribution philosophy aims at sharing its prosperity with its shareholders. Your Company has declared an interim dividend of Rs 20 per share on March 23, 2021 for the year ended March 31, 2021. The total equity dividend for FY21 (including dividend distribution tax) aggregated to Rs 34,85,60,240.

E) 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 Obligation and Disclosure requirements) Regulations, 2015 ("SEBI LODR 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 F.Y. 2020-21 is attached to the Financial Statements for the F.Y. 2020-21 in Form AOC-1. The Company will make available the said financial statements and related detailed information of the subsidiary companies upon request by any member of the Company or its subsidiary companies.

Pursuant to the provisions of the Act, the Audited 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 viz.www.saregama.com.

2. SHARE CAPITAL

At the beginning of the financial year, the issued and paid-up share capital of the Company was Rs 17,42,60,120 divided into 1,74,26,012 shares of Rs 10/- each.

During the year under review, 2,000 shares were allotted to eligible employees under Saregama Employee Stock Option Scheme 2013 and 2,00,000 shares were transferred from Saregama Welfare Trust to eligible employee of the Company on account of stock options exercised by the eligible employee under Saregama Employee Stock Option Scheme 2013.

At the end of the financial year, the issued and paid-up share capital of the Company was Rs 17,42,80,120 divided into 1,74,28,012 shares of Rs 10/- 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 is committed to good governance practices based on principles of integrity, fairness, transparency and accountability for creating long-term sustainable shareholder value. The Report on Corporate Governance as applicable under the SEBI LODR Regulations forms part of the Annual Report. A certificate from M/s. MR and Associates, Practicing Company Secretary regarding the compliance of the Corporate Governance requirements as per relevant provisions of SEBI LODR Regulations forms part of the Annual report. Further, information about all elements of remuneration package etc. of individual directors forms part of the Annual Report.

4. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2021 is available on the Company website on https://www.saregama.com/static/investors?srgm_tracker=footer.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL/ SENIOR MANAGEMENT PERSONNEL

A) Change in Directors

During the year under review, the following were the changes in the Board of Directors:

a. Ms. Kusum Dadoo (DIN: 06967827) was appointed as an Independent Woman Director on the Board w.e.f. June 5, 2020. She resigned as an Independent Woman Director from the Board of the Company w.e.f. February 4, 2021 due to personal reasons. She has also confirmed that there are no other material reasons for resignation except as mentioned above.

b. Mrs. Avarna Jain (DIN: 02106305) is liable to retire by rotation, and being eligible, offers herself for re-appointment as a Director of the Company.

c. Appointment of Ms. Suhana Murshed (DIN: 08572394) as an Additional Non-Executive Independent Woman Director, effective March 23, 2021 for a period of 5 consecutive years. A resolution seeking shareholdersRs approval for her appointment as an Independent Woman Director along with other required details forms part of the Notice. Further the Board is of the opinion that she possesses integrity, expertise and relevant proficiency which will bring tremendous value to the Board and to the Company. Ms. Suhana Murshed shall appear for the online proficiency self-assessment test as per the specified timeline conducted by the institute under the applicable provisions of the Act.

d. Pursuant to SEBI LODR Regulations dated May 9, 2018, a special resolution is required to be passed for continuing the directorship of any person as a non-executive director who has attained the age of seventy five years. In view of the above, it is proposed to obtain shareholdersRs approval at the ensuing Annual General Meeting for continuing the Directorship of Mr. Santanu Bhattacharya (DIN: 01794958) who will attain the age of 75 years during FY 2021-22.

e. Re-appointment of Mr. Noshir Naval Framjee (DIN: 01646640) as an Independent Director on the Board of the Company for a term of 5 (five) consecutive years (on the basis of the report on his performance evaluation done by the Board) and continuation of his Directorship as he has attained the age of seventy five years, subject to MemberRss approval at the ensuing Annual General Meeting.

B) Independent Directors Declaration

The company has received the necessary declaration from the Independent Directors that they meet the criteria of

independence as provided in Section 149 of the Act. Further, the Company has formulated a Code of Conduct for Directors

and Senior Management Personnel and all the Directors and Senior Management Personnel have complied with the Code.

C) Board Evaluation

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

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 addition, the Chairperson was also evaluated on the key aspects of his role.

D) Familiarisation Programme For Independent Directors

Pursuant to the requirement of Securities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014, the Company has in place a programme for familiarisation of the Independent Directors with the Company, details of which is available on the website of the company.

https://www.saregama.com/static/investors?srgm_tracker=footer

E) Key Managerial Personnel

During the year under review, there were no changes in Key Managerial Personnel.

6. POLICIES

A) Vigil Mechanism/Whistle Blower Policy

The Company has adopted 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 Company Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The policy of vigil mechanism is available on the Company website (Weblink: https://www.saregama.com/static/investors?srgm_tracker=footer)

B) Nomination And Remuneration Policy

The Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and other Employees pursuant to the provisions of the Act and Regulation 19 of the SEBI LODR Regulations is available on the website of the Company https://www.saregama.com/static/investors?srgm_tracker=footer.

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 Company 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 performance of duties

C) Corporate Social Responsibility (CSR)

The brief outline of the CSR Policy of the Company along with the Annual Report on CSR activities is set out in "Annexure A" of this report. The policy is available on the Company website.

(Weblink: https://www.saregama.com/static/investors?srgmj:racker=footer)

D) Dividend Distribution Policy

Since the Company falls into Top 500 listed entities as per market capitalization as on March 31, 2021, the Board of Directors at its meeting held on May 12, 2021 adopted a Dividend Distribution policy in terms of Regulation 43A of SEBI LODR Regulations and the same is available on the website of the Company https://www.saregama.com/static/investors?srgm_tracker=footer. Further, it is also annexed as "Annexure B".

7. 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. The intervening gap between the meetings was within the period prescribed under the Act and Regulation 17 of SEBI LODR Regulations.

Currently, the Board has Five (5) committees, namely, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility (RsRsCSRRsRs) Committee, StakeholdersRs Relationship Committee and Finance Committee. Since the Company falls into Top 500 listed entities as per market capitalization as on March 31, 2021, the Board of Directors at its meeting held on May 12, 2021 has constituted a Risk Management Committee in line with SEBI LODR Regulations.

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.

The Audit Committee comprises of following members:

Name of the Member Position Category of Director
Mr. Umang Kanoria Chairman 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.

8. PARTICULARS OF EMPLOYEES

The information on top 10 employees and employees who were in receipt of remuneration of not less than Rs 1,02,00,000 (Rupees One Crore and two lakh only) during the year or Rs 8,50,000 (Rupees Eight Lakh Fifty Thousand Only) per month during any part of the said year as required under Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is 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 shareholders excluding the aforesaid Annexure. Any member interested in obtaining a copy of the same may write to the Company Secretary.

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 C".

9. 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 44 to the financial Statement.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/ transactions entered by the Company with the Related Parties during the financial year were on an ArmRss length basis and were in compliance with the applicable provisions of the Act and the SEBI LODR Regulations.

Further, there were no material contracts/arrangements/ transactions entered by the Company with the Related Parties during the financial year.

11. RISK MANAGEMENT

The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a Company 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 Company operating environment and they emerge on a regular basis. The Company 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 Company competitive advantage. In the opinion of the Board, there are no such risks, which may threaten the existence of the Company.

12. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Audit Committee reviews the adequacy and effectiveness of the Company internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company risk management policies and systems.

13. AUDITORS

A) Statutory Auditors

M/s BSR & Co. LLP, Chartered Accountants, Firm Registration No. 101248W/W-100022 was appointed as Statutory Auditors of the Company for a period of 5 years by the shareholders at the Annual General Meeting held on July 28, 2017. The Statutory Auditors report does not contain any qualification/reservation/adverse remark or disclaimer.

B) Internal Auditors

M/S Ernst and Young have been appointed as Internal Auditors for FY 2020-21.

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, have been appointed as Secretarial Auditor, to undertake Secretarial Audit of the Company for the financial year 2020-21. The report of the Secretarial Auditor is annexed to this report as "Annexure D". The Secretarial Audit report does not contain any qualification/reservation/ adverse remark or disclaimer.

D) Cost Auditors

Pursuant to section 148 and applicable provisions of the Act and 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 March 31, 2021. Your Directors have on the recommendation of the Audit Committee, appointed M/s. Shome and Banerjee, Cost Accountants, as the Cost Auditor to audit the cost records for the financial year ending March 31, 2021. Remuneration payable to the Cost Auditor is subject to ratification by the members of the Company. Accordingly, a resolution seeking membersRs ratification for the remuneration payable to Shome and Banerjee, Cost Accountants, is included in the Notice convening the Annual General Meeting, along with relevant details, including the proposed remuneration.

14. DIRECTORSRs 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 March 31, 2021 and to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2021, and of the profit and loss of the company for that year on that date;

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

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down proper systems of internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. 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:

(Rs In lakhs)

Particulars Current Year Previous Year
Foreign Exchange used 2,135.19 8,338.05
Foreign Exchange earned 10,183.89 9,264.34

16. EMPLOYEES STOCK OPTION SCHEME 2013

The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them. With a view to providing an opportunity to the employees of the Company to share the growth of the Company and to create long term wealth, the Company has an Employee Stock Option Scheme (ESOS), viz., the Saregama Employee Stock Option Scheme 2013 (ESOS 2013). 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) Regulations, 2014, as amended ("SEBI (SBEB) Regulations") and a certificate from Statutory Auditors to that effect shall be placed at the Annual General Meeting.

At the Annual General Meeting held on July 19, 2019, the ESOS 2013 scheme was amended for implementation through the Trust which will be administered under the guidance, advice and direction of the Nomination & Remuneration Committee in accordance with the provisions of the Act and SEBI (SBEB) Regulations. The Board of Directors has facilitated setting up of Saregama Welfare Trust to implement the ESOS 2013 scheme which has been formed by the Company. The Company shall provide financial assistance to the Trust for the secondary acquisition of equity shares of the Company for the purpose of implementation of ESOS 2013 scheme. The terms and conditions for the financial assistance provided shall be in compliance with the Act read with Companies (Share Capital and Debenture) Rules, 2014 and SEBI (SBEB) Regulations. During the year ended March 31, 2021, the Trust has purchased 1,18,641 equity shares through secondary acquisition.

At the Annual General Meeting held on July 19, 2019, the shareholders approved the gradual cancellation of the SAR 2014 and SAR 2018 schemes and the continuance of the ESOP 2013 scheme albeit with certain amendments. The Nomination and Remuneration Committee at its meeting held on January 17, 2020 cancelled 2,00,000 Stock Appreciation rights issued to eligible employee which was 100% vested after 1 year and the said options has been exercised by the eligible employee on January 19, 2021. The aforesaid 2,00,000 equity shares were then transferred to the said eligible employee from Saregama Welfare Trust.

Disclosures with respect to Stock Options as required under Regulation 14 of the SEBI (SBEB) Regulations, is available on the Company website Rswww.saregama.comRs.

17. STOCK APPRECIATION RIGHTS SCHEME 2018

At the Annual General Meeting held on July 19, 2019, the shareholders approved the gradual cancellation of the SAR 2014 and SAR 2018 schemes and the continuance of the ESOP 2013 scheme albeit with certain amendments. During the year under review, the Nomination and Remuneration Committee on June 30, 2020 granted ESOPs under the Saregama ESOP Scheme 2013 in lieu of SAR 2018 and as a result of the above, the SAR scheme 2018 stands cancelled.

18. RIGHTS ISSUE

Out of 53,38,628 equity shares issued for cash at a premium of Rs 35/- (issue price - Rs 45/-) pursuant to the Rights Issue in 2005, allotment of 5,290 (31.03.2020 - 5,290) equity shares (relating to cases under litigation / pending clearance from concerned authorities) are in abeyance as on 31st March, 2021.

19. RATIO ANALYSIS
KEY RATIOS

STANDALONE

March 2021 March 2020
Net Profit Margin 1 25% 10%
Operating Profit Margin 1 29% 14%
Debt to Equity Ratio 2 - 2%
Interest Coverage Ratio 2 558.0 22.8
Current Ratio 2.0 2.0
Debtor Turnover (Days) 75.3 80.5
Inventory Turnover (Days) 3 206.0 126.0
Return on Networth 1 30% 17%

Note:

1. Increase in Operating profit margin, Net Profit Margin and Return on Networth is due to high profits for the year.

2. Interest Coverage ratio and Debt-Equity Ratio are not relevant for the current year as company has zero debt as on 31st MarchRs21.

3. Inventory turnover ratio is higher due to lower retail sales volume due to COVID-19 and higher inventory of digital films under production.

20. BUSINESS RESPONSIBILITY REPORT

Regulation 34 of SEBI LODR Regulations requires top 1,000 listed entities based on market capitalization (calculated as on March 31 of every financial year), a business responsibility report describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified by the Board from time to time.

Since Saregama India Limited falls in Top 1,000 listed entities as on March 31, 2020, Business Responsibility Report for the year ended March 31, 2021 as stipulated under Regulation 34(3) of SEBI LODR Regulations is annexed as "Annexure E".

21. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meeting and General Meeting.

22. 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 year under review, the Company has not received any complaints on sexual harassment and no complaints were pending to be resolved as on March 31, 2021.

23. DELISTING OF EQUITY SHARES FROM CALCUTTA STOCK EXCHANGE

The Board of Directors of the Company at its Meeting held on October 28, 2020 approved, inter alia, a proposal for voluntary delisting of the Company equity shares from Calcutta Stock Exchange ("CSE") only as there has been no trading in the Equity Shares of the Company listed on CSE for several years. CSE does not have nationwide trading terminal. Hence, such listing was serving no useful purpose. Accordingly, the Equity Shares of the Company were delisted from CSE w.e.f. December 7, 2020 in response to the application made by the Company with CSE Limited for voluntary delisting of its equity shares pursuant to Regulations 6 and 7 of the SEBI (Delisting of Equity Shares) Regulations, 2009. The Equity Shares of the Company continue to remain listed on both NSE and BSE.

24. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

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 were no material changes and commitment affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

c) During the year under review, there were no significant or material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation.

d) There are no instances of fraud reported by the Auditors during the financial year ended March 31, 2021.

e) During the year under review, there were no companies which have become or ceased as subsidiary Company, associates and joint ventures.

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

25. ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation to its stakeholderRss, 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. The Directors mourn the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

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: May 12, 2021
Place: Kolkata