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Sun TV Network

BSE: 532733|NSE: SUNTV|ISIN: INE424H01027|SECTOR: Media & Entertainment
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Directors Report Year End : Mar '16    Mar 15
The Directors are pleased to present the Thirty First Annual Report and
 Audited Financial Accounts of the Company for the financial year ended
 31st March 2016.
 
 FINANCIAL HIGHLIGHTS
 
 The financial highlights for the year ended 31st March 2016 are given
 below:
 
                                                        (Rs. in Crores)
 
 Particulars           For the year ended        For the year ended
                          Standalone                Consolidated
                  31st March,   31st March,   31st March,   31st March,
                  2016          2015          2016          2015
 
 Total Income       2,493.30      2,331.45      2,680.41      2,494.29
 
 Total 
 Expenditure
 (Excluding 
 Interest &
 Financial
 Charges)           1,178.66      1,217.24      1,300.53      1,333.45
 
 Profit before 
 interest and tax   1,314.64      1,114.21      1,379.88      1,160.84
 
 Interest &
 Financial 
 Charges                2.11          2.22          2.20          2.29
 
 Profit Before 
 Extraordinary
 items and Tax      1,312.53      1,111.99      1,377.68      1,158.55
 
 Extraordinary 
 items (net)           17.97             -         17.97             -
 
 Profit Before 
 Tax after
 Extraordinary 
 items              1,330.50      1,111.99      1,395.65      1,158.55
 
 Provision for 
 Taxation             463.25        374.76        475.49        375.96
 
 Profit before
 minority interest
 & Share in 
 Net Profit of
 Associates           867.25        737.23        920.16        782.59
 
 Share in Profit 
 from Associates           -             -         10.63         13.53
 
 Profit after taxes   867.25        737.23        930.79        796.12 
 
 Profit 
 attributable to :
 
 Owners of Equity          -             -        913.38        782.04
 
 Minority Interest         -             -         17.41         14.08
 
 Profit after taxes   867.25        737.23        913.38        782.04
 
 Accumulated
 Profit,
 beginning of the 
 year               2,227.04      2,019.14      2,195.48      1,942.77
 
 Interim Dividend     610.83        443.35        610.83        443.35
 
 Tax on Interim 
 Dividend             124.35         85.98        124.35         85.98
 
 Profit Carried
 Forward            2,359.11      2,227.04      2,373.68      2,195.48
 
 Earnings Per 
 Share (Face 
 value Rs.5/-) 
 before 
 extraordinary
 items                 21.55         18.71         22.72         19.84 
 
 Earnings Per
 Share (Face
 value Rs.5/-) 
 after 
 extraordinary 
 items                 22.01         18.71         23.18         19.84
 
 SUMMARY OF OPERATIONS
 
 The Total Income for the year ended 31st March 2016 was Rs. 2,493.30
 crores as against Rs. 2,331.45 crores during the previous year ended
 31st March 2015. Profit Before Tax after extraordinary items was Rs.
 1,330.50 crores as against Rs. 1,111.99 crores in the previous year.
 Profit After Tax after extraordinary items was Rs. 867.25 crores as
 against Rs. 737.23 crores in the previous year.
 
 BUSINESS OVERVIEW
 
 Your Company, one of the largest Television Broadcasters in India
 operating Satellite Television Channels across four languages of Tamil,
 Telugu, Kannada and Malayalam and presently airing FM radio stations
 across India continues to have sustained and increased viewership of
 its channels with Sun TV being the most watched channel in India.
 
 DIVIDEND
 
 During the financial year ended 31st March 2016, the Board of Directors
 declared the Interim Dividends of Rs. 6.00/- per equity share (120%),
 Rs. 2.00/- per equity share (40%) and Rs. 7.50/- per equity share
 (150%) at the Board Meetings held on April 30, 2015, February 12, 2016
 and March 14, 2016 respectively and have not recommended any Final
 Dividend. The dividend payout would result in a total dividend of 310%,
 i.e., Rs. 15.50/- per equity share of face value of Rs.5.00/- each for
 the financial year ended 31st March 2016. (Prev. Year of 225%, i.e., Rs
 11.25/- per equity share of face value of Rs.5.00/- each). The Payout
 ratio currently stands at 84.77%.
 
 TRANSFER TO RESERVES
 
 During the financial year 2015-16, no amount has been transferred to
 the General Reserve.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 In terms of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013
 your Directors confirm that, to the best of their knowledge and belief:
 
 - In the preparation of the Statement of Profit & Loss for the
 financial year ended 31st March, 2016 and Balance Sheet as at that date
 (financial statements), the applicable Accounting Standards have been
 followed along with proper explanation relating to material departures;
 
 - Appropriate accounting policies have been selected and applied
 consistently and made such 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 the end of the financial year and of the profit of
 the Company for that period;
 
 - Proper and sufficient care 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. To ensure this, the Company has established
 internal control systems, consistent with its size and nature of
 operations. In weighing the assurance provided by any such system of
 internal controls its inherent limitations should be recognized. These
 systems are reviewed and updated on an ongoing basis. Periodic internal
 audits are conducted to provide reasonable assurance of compliance with
 these systems. The Audit Committee meets at regular intervals to review
 the internal audit function;
 
 - The financial statements have been prepared on a going concern basis.
 
 - Proper internal financial controls were in place and that the
 financial controls were adequate and were operating effectively.
 
 - Proper systems are in place to ensure compliance of all laws
 applicable to the Company;
 
 DIRECTORS AND KEY MANAGERIAL PERSONNEL
 
 None of the Company''s directors are disqualified from being appointed
 as a director as specified in Section 164 (2) of the Companies Act,
 2013.
 
 Retirement by Rotation
 
 As per the provisions of the Companies Act, 2013, Mrs. Kavery
 Kalanithi, Director of the Company will retire at the ensuing AGM and
 being eligible, seeks re-appointment. The Board of Directors recommend
 her re-appointment.
 
 The information on the particulars of director eligible for
 re-appointment in terms of Regulation 36(3) of the Listing Regulations
 has been provided in annexure to the notice convening the Annual
 General Meeting.
 
 Key Managerial Personnel
 
 Pursuant to the provisions of Section 203 of the Companies Act, 2013
 the Key Managerial Personnel of the Company are Mr. K. Vijaykumar,
 Managing Director and Chief Executive Officer, Mr. V.C. Unnikrishnan,
 Chief Financial Officer and Mr. R. Ravi, Company Secretary.  There has
 been no change in the Key Managerial Personnel during the year under
 review.
 
 APPOINTMENT OF MR. R. MAHESHKUMAR AS PRESIDENT
 
 As a part of our ongoing effort to strengthen our Management Team the
 Company appointed Mr. R. Maheshkumar as President with effect from 1st
 November 2015. Mr. R. Maheshkumar, 46 is a Chartered Accountant with
 over 23 years'' experience out of which more than 15 years has been with
 Media Industry.
 
 CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION & ANALYSIS REPORT
 AND OTHER INFORMATION REQUIRED UNDER THE COMPANIES ACT, 2013 AND SEBI
 (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
 
 As required under Regulation 34 and Schedule V of SEBI (Listing
 Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter
 referred to as Listing Regulations) with the Stock exchanges, we
 continue to be a pioneer in benchmarking our corporate governance
 policies with the best in the media industry. The report on Management
 Discussion and Analysis, Corporate Governance as well as the Auditor''s
 certificate regarding compliance of conditions of Corporate Governance
 forms part of the Annual Report.
 
 Various information required to be disclosed under the Companies Act,
 2013 and Schedule V of SEBI (LODR) Regulations, 2015 is set out in the
 Annexure - I and forms part of this report.
 
 AUDITORS AND SECRETARIAL AUDITORS
 
 Pursuant to the provisions of Section 139 and other applicable
 provisions, if any, of the Companies Act, 2013 and the Rules framed
 thereunder, as amended from time to time, the appointment of M/s. S.R.
 Batliboi & Associates LLP, Chartered Accountants (ICAI Firm
 Registration No: 101049W) as the Auditors of the Company approved by
 the Shareholders at the 29th Annual General Meeting (AGM), for a term
 of three years, i.e. till the conclusion of 32nd AGM, which was subject
 to ratification at every AGM, be and is hereby ratified to hold the
 office from the conclusion of this AGM till the conclusion of the 32nd
 AGM of the Company to be held in the year 2017, at such remuneration
 plus applicable taxes, out-of-pocket expenses, etc., as may be mutually
 agreed between the Board of Directors of the Company and the Auditors.
 
 As per the provisions of Section 204 of the Companies Act, 2013 and
 Rule 9 of The Companies (Appointment and Remuneration of Managerial
 Personnel) Rules, 2014, the Company has appointed Smt. Lakshmmi
 Subramanian, Senior Partner of M/s. Lakshmmi Subramanian & Associates,
 a firm of Company Secretaries in Practice to undertake the Secretarial
 Audit of the Company. The Secretarial Audit Report is annexed herewith
 as Annexure VI.
 
 There are no qualifications, reservations or adverse remarks or
 disclaimers in the Auditors and Secretarial Auditors Report.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 In accordance with Section 135 of the Companies Act, 2013, the Company
 has constituted a Corporate Social Responsibility Committee. The CSR
 Committee of the Company has approved a CSR policy. The Annual report
 on CSR activities as required under Companies (Corporate Social
 Responsibility Policy) Rules, 2014 has been appended in Annexure II to
 this Report. Further details relating to the Corporate Social
 Responsibility Committee are provided in the Corporate Governance
 Report, which forms part of this report.
 
 SUBSIDIARY COMPANIES
 
 Your Company has two subsidiaries viz., M/s. Kal Radio Limited and M/s.
 South Asia FM Limited. There has been no material change in the nature
 of business of the subsidiaries.  Shareholders interested in obtaining
 a copy of the audited annual accounts of the subsidiary companies may
 write to the Company Secretary. In terms of proviso to sub section (3)
 of Section 129 of the Act, the salient features of the financial
 statement of the subsidiaries is set out in the prescribed Form AOC  1
 as Annexure V which forms part of the annual report.
 
 MATERIAL SUBSIDIARY COMPANY
 
 As per Regulation 16 of the Listing Regulations, your Company has no
 material subsidiary company, whose turnover or net worth exceeds 20% of
 the consolidated turnover or net worth respectively of your Company and
 its subsidiaries in the immediately preceding accounting year.
 
 TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
 
 In terms of Section 125 (2) of the Companies Act, 2013, an amount of
 Rs. 0.02 crores being unclaimed dividend pertaining to the financial
 year 2007-08, had been transferred during the current year to the
 Investor Education and Protection Fund established by the Central
 Government.
 
 PUBLIC DEPOSITS
 
 Your Company has not accepted any Deposits from the public in terms of
 Section 73 of the Companies Act, 2013 during the financial year under
 review.
 
 PARTICULARS OF EMPLOYEES
 
 Sun TV Network Limited had 1906 employees as of 31st March 2016
 (previously 2005). In accordance with the provisions of Section 197
 (12) of the Companies Act, 2013 read with Rule 5 of The Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the
 required information is annexed and forms part of this Report. However,
 as per the provisions of Section 136 of the Companies Act, 2013, the
 Directors Report is being sent to all the Shareholders of the Company
 excluding the aforesaid annexure. Any shareholder interested in
 obtaining a copy of the said annexure may write to the Company
 Secretary at the Registered Office of the Company.
 
 SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
 
 There were no significant or material orders passed by the regulators
 or courts or tribunals impacting the going concern status and Company''s
 operations in future.
 
 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
 THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE
 REPORT
 
 There were no material changes and commitments affecting the financial
 position of the Company occurred between the end of financial year to
 which this financial statements relate to and the date of this Report.
 
 INFORMATION AS REQUIRED UNDER SECTION 134(3)(m) OF THE COMPANIES ACT,
 2013 READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014
 
 (A) CONSERVATION OF ENERGY
 
 The Company is engaged in Satellite Television Broadcasting operations
 and the information, as intended under Section 134 (3)(m) does not
 arise.
 
 (B) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
 
 The Company uses the latest high definition (HD) digital technology in
 broadcasting its programs. The outdated technologies are constantly
 identified and updated with latest innovations.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 As required by Accounting Standard  AS 21 on Consolidated Financial
 Statements issued by The Institute of Chartered Accountants of India,
 the Audited Consolidated Financial Statements of the Company are
 attached. The Audited Consolidated Financial Statements also account
 for the minority interest of your Company''s subsidiary South Asia FM
 Limited pursuant to the strategic alliance with Red FM.
 
 CEO/CFO CERTIFICATION
 
 The Managing Director & Chief Executive Officer and the Chief Financial
 Officer have submitted a certificate to the Board regarding the
 financial statements and other matters as required under Regulation
 17(8) of the Listing Regulations, which forms part of the report.
 
 APPRECIATION AND ACKNOWLEDGMENT
 
 Your Directors take this opportunity to place on record their deep
 appreciation of the dedication, hard work, solidarity, co-operation,
 support and commitment of employees at all levels in maintaining the
 sustained growth of your Company and remain in the forefront of media
 and entertainment business.
 
 Your Directors thank and express their gratitude for the support and
 co-operation received from the Central and State Governments mainly the
 Ministry of Information and Broadcasting and the Department of
 Telecommunication and other stakeholders including viewers, producers,
 vendors, financial institutions, banks, investors, service providers as
 well as regulatory and governmental authorities and stock exchanges,
 for their continued support.
 
                                    On behalf of the Board
 
 Place: Chennai                     Kalanithi Maran
 
 Date: July 8, 2016                 Chairman
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