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TV18 Broadcast Directors Report, TV18 Broadcast Reports by Directors
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TV18 Broadcast
BSE: 532800|NSE: TV18BRDCST|ISIN: INE886H01027|SECTOR: Media & Entertainment
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
Dear Members,
 
 The Directors have pleasure in presenting the 8th Annual Report and
 audited accounts of M/s TV18 Broadcast Limited (herein after referred
 as the ''Company'' or ''TV18'') for the financial year ended March 31,
 2013.
 
 FINANCIAL RESULTS
 
 The key financial figures on standalone performance of your Company for
 the financial year ended March 31, 2013 are summerised as under:
 
                                                      (Rs. in Lakhs)
 
 Particulars                                 Financial     Financial
                                             Year ended    Year ended 
                                             March 31,     March 31,
                                             2013          2012
 
 Total Revenues                               57,047         68,735
 
 Profit /(loss) before                        13,539         12,197
 interest and depreciation
 
 Interest                                     10,102          8,540
 
 Depreciation                                  2,291          2,446
 
 Profit /(loss) before tax                     1,146          1,211
 
 Provision for taxes /                           123            287
 deferred tax
 
 Net Profit /(Loss) after tax                  1,023            924
 
 BUSINESS OPERATIONS
 
 During the year under review your Company reported a strong operating
 performance despite a slow in advertising environment. The revenue of
 your Company during the current year was Rs. 57,047 lakhs as against
 Rs. 68,735 lakhs in the previous year. During Financial Year 2012-13
 the Company started reporting distribution revenues on a net basis
 (subscription revenue - carriage costs) which resulted in lower
 reported operating revenue and lower reported expenses leaving profit
 the same. Business News Operations showed a strong performance and
 reported an operating profit of Rs. 10,080 lakhs in Financial Year
 2012- 13 as compared to Rs. 5,470 lakhs during the previous year.
 Similarly, General News Operations broke into positive territory and
 reported an operating profit of Rs. 320 lakhs in Financial Year 2012-13
 against a loss of Rs. 430 lakhs during the previous year. The Company
 has earned a net profit of Rs. 1,023 lakhs during the current year as
 against a profit of Rs. 924 lakhs during the previous year.
 
 Audited Consolidated Financial Statements for the year ended March 31,
 2013 also forms part of the Annual Report of the Company.
 
 TRANSFER TO RESERVES
 
 Your Company has not made any transfer to the Reserves during the
 financial year 2012-13.
 
 DIVIDEND
 
 In order to conserve the resources, your Directors do not recommend any
 Dividend for the financial year ended March 31, 2013.
 
 DEPOSITS
 
 During the year under review your Company did not invited fresh
 deposits but the Company has accepted deposits in the past and as on
 March 31, 2013, the Company had an aggregate sum of Rs. 147.93 crores
 under its Fixed Deposit scheme. There was no failure in repayment of
 interest due on Fixed Deposits by the Company. Reminders were sent to
 532 Deposit holders who have not claimed repayment of their matured
 fixed deposits which became due till March 31, 2013 amounting to Rs.
 9.86 crores.
 
 The Credit Rating Agency, ICRA has affirmed the credit rating for the
 Fixed Deposit Scheme of your Company as MA- (Pronounced as MA
 Minus). The above rating which was earlier placed under Rating Watch
 with Developing Implications has now been taken off and Stable
 outlook has been assigned to the rating.
 
 Your Company conveys it''s thanks to the deposit holders for the great
 confidence shown in the Company.
 
 RIGHTS ISSUE
 
 During the year under review your Company raised Rs.  2699.16 Crores by
 successfully completing the Rights Issue of its 134,95,77,882 equity
 shares issued at Rs. 20/- per share to its existing equity shareholders
 offered in the ratio of 41 equity shares for every 11 equity shares
 held on Record Date i.e. September 17, 2012.
 
 The Rights Issue was opened on September 25, 2012 and closed on October
 15, 2012. Shares were allotted on October 23, 2012.
 
 ACQUISITION OF ETV CHANNELS
 
 During the last fiscal the Board of Directors of your Company had
 announced the plan of the Company to enter into the fast growing space
 of regional television through the acquisition of ETV Channels. During
 the year under review, your Company had remitted Rs. 1950 Crores to
 Arimas Trading Private Limited for the purpose of acquisition of equity
 securities of Equator Trading Private Limited. Equity securities are
 yet to be transferred in the name of the Company due to pending
 completion of legal formalities which are under process.
 
 CHANGES IN CAPITAL STRUCTURE
 
 During the year under review following changes were effected in the
 Share Capital of your Company.
 
 - INCREASE IN THE AUTHORISED SHARE CAPITAL
 
 Authorised Capital of your Company increased from Rs. 292,00,00,000
 (Rupees Two Hundred and Ninety Two crores only) comprising of
 146,00,00,000 equity shares of face value of Rs. 2/- each to Rs.
 1000,00,00,000 (Rupees One Thousand crores Only) comprising of
 500,00,00,000 equity shares of Rs. 2/- each.
 
 - INCREASE IN THE PAID-UP SHARE CAPITAL
 
 During the year ended March 31, 2013, the paid-up equity share capital
 of your Company increased from Rs. 72,41,63,742 comprising of
 36,20,81,871 fully paid up equity shares of Rs. 2/- each to Rs.
 342,33,19,506 comprising of 171,16,59,753 fully paid up equity shares
 of Rs. 2/- each. The increase in the paid up share capital of the
 Company was consequent to Rights Issue of 134,95,77,882 equity shares.
 
 EMPLOYEES STOCK OPTION SCHEME
 
 ''The GBN Employee Stock Option Plan 2007'' (ESOP 2007), implemented
 in accordance with the provisions of Companies Act, 1956 and the
 Securities and Exchange Board of India (Employee Stock Option Scheme
 and Employees Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines)
 as amended from time to time, is one of the Company''s instrument to
 reward employees of the Company / Holding / Subsidiary companies for
 their dedication, support and hard work.
 
 Remuneration/Compensation Committee (the Committee) of the Board of
 Directors of the Company manages the ESOP 2007. During the financial
 year ended on March 31, 2013 the Committee granted 75,00,000 options
 under ESOP 2007 to the employees of the Company/ Holding company.
 Further due to global turmoil and downfall in Indian Stock Market, the
 price of the share(s) of the Company has rendered the options, which
 have been granted and vested, unattractive and unviable to exercise.
 The exercise period for 6,51,733 options was expiring during the year.
 Therefore in order to uphold the basic objective of ESOP Scheme i.e.
 rewarding the deserving employees and in their beneficial interest, the
 exercise period for these options was extended for a further period of
 one year from the expiry of their respective current exercise period.
 
 Pursuant to sub-clause (f) of Clause 5.3 of SEBI Guidelines and in
 accordance with clause 5 read with clause 19 of ESOP 2007, the
 Committee has adjusted, in proportion to the Rights Issue ratio (i.e.
 41:11), the number of ungranted options and options that have been
 granted but not yet exercised and thereby increased 3,89,84,727 new
 options to the total pool of the options under ESOP 2007. After such
 increase the total number of options under ESOP 2007 has increased from
 existing 1,25,00,000 options to 5,14,84,727 options.
 
 The details, as required to be disclosed under Clause 12 & 19 of SEBI
 Guidelines, are provided in Annexure - A to this Report.
 
 A Certificate from the Statutory Auditor of the Company confirming the
 implementation of the ''ESOP 2007'' in accordance with the SEBI
 Guidelines and the resolutions passed by the members of the Company
 will be made available for inspection by the members at the ensuing
 Annual General Meeting of the Company.
 
 DETAILS OF UNCLAIMED SHARES AS PER CLAUSE 5A OF THE LISTING AGREEMENT
 
 As per clause 5A of the Listing Agreement, status of outstanding shares
 (pertains to IPO of the Company, which could not be credited into the
 allottees demat accounts due to incorrect particulars of demat account
 holders) lying in the ''TV18 Broadcast Limited - Unclaimed Securities
 Suspense Account (Unclaimed Suspense account) as on March 31,
 2013, is as under:
 
 Particulars                         Number of     Number of
                                     shareholders  Equity shares
 
 Aggregate number of                      2             250
 shareholders and the
 outstanding shares
 lying in the Unclaimed
 Suspense Account at
 the beginning of the
 year i.e. April 1, 2012.
 
 Number of shareholders                   -               -
 who approached to
 the Company / RTA for
 transfer of shares from
 Unclaimed Suspense
 Account during the
 year ended March 31, 2013.
 
 Number of shareholders                   -               -
 to whom shares were
 transferred from
 Unclaimed Suspense
 Account during the
 year ended March 31,2013.
 
 Aggregate Number of                      2             250
 shareholders and the 
 outstanding shares lying 
 in the Unclaimed Suspense 
 Account at the end of the 
 year i.e.  as on March 31, 2013.
 
 The voting rights on these shares are frozen till the rightful owner of
 these shares claims the shares.
 
 MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
 
 In terms of requirement of Clause 49 of the Listing Agreement with the
 Stock Exchange(s), Management''s Discussion and Analysis Report,
 disclosing the operations of the Company in detail, is provided
 separately as a part of Director''s Report.
 
 DIRECTORS
 
 Mr. Raghav Bahl and Mr. Sanjay Ray Chaudhuri, Directors of the Company,
 are liable to retire by rotation at the ensuing Annual General Meeting
 and being eligible, have offered themselves for their re-appointment.
 Brief profiles of directors being re-appointed, nature of their
 expertise in specific functional areas and relevant details of their
 directorships in other public companies and Board committee positions
 are provided in the Corporate Governance Report of the Company forming
 a part of the Annual Report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
 1956 as amended, your Directors confirm that:
 
 i) in the preparation of the annual accounts for the financial year
 ended March 31, 2013, the applicable Accounting Standards have been
 followed;
 
 ii) the Directors 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 and of profit or loss
 of the Company for the year under review;
 
 iii) the Directors have taken proper and sufficient care for
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 iv) the Directors have prepared the accounts for the financial year
 ended March 31, 2013 on a ''going concern'' basis.
 
 SUBSIDIARY COMPANIES
 
 During the year under review TV18 has acquired 2,28,000 equity shares
 of face value of Rs. 10/- each of IndiaCast Media Distribution Private
 Limited and consequently IndiaCast Media Distribution Private Limited
 has become a Wholly Owned Subsidiary of the Company.
 
 As at March 31, 2013 we have 7 subsidiaries (including step down
 subsidiaries), namely: ibn18 (Mauritius) Limited, RVT Media Private
 Limited, AeTn18 Media Private Limited, IndiaCast Media Distribution
 Private Limited, IC Media Distribution Services Private Limited,
 IndiaCast UK Limited and IndiaCast US Limited.
 
 In terms of provisions of Section 212 of the Companies Act, 1956 a
 statement of your Company''s interest in its subsidiary companies as on
 March 31, 2013 is attached as Annexure - B
 
 Pursuant to Section 212 of the Companies Act, 1956, your Company is
 required to attach the Balance Sheet, Statement of Profit & Loss and
 the Reports of the Directors'' and Auditors'' of its subsidiaries
 alongwith its Balance Sheet. However in terms of general exemption
 provided by Ministry of Corporate Affairs under Section 212(8) of the
 Companies Act, 1956 vide its circular no. 51/12/2007-CL-III dated
 February 8, 2011 the Company is not attaching the aforesaid documents
 of its subsidiaries. The annual accounts of the subsidiary companies
 will be made available to the shareholders of the Company and to the
 shareholders of the subsidiary companies seeking such information at
 any point of time and they shall also be kept for inspection by any
 shareholders at the registered office of the Company.
 
 JOINT VENTURES
 
 - Viacom18 Media Private Limited - (Through 50:50 JV of the Company
 with Viacom Inc.) Owns and operates ''Colors'', leading Hindi General
 Entertainment Channel (GEC), ''MTV'', the leading Youth Entertainment
 destination, ''Nick & Nick Jr.'', leading Kids channels, ''VhT, leading
 Premier English channel, ''Sonic'', multi- platform for animation & live
 action shows, ''Comedy Central, English comedy channel and ''Viacom18
 Motion Pictures'', a film division which focuses on film production,
 marketing and distribution.
 
 - IBN Lokmat News Private Limited - (Through 50:50 JV of the Company
 with Lokmat group) Operates ''IBN Lokmat'', the Marathi language news
 channel.
 
 - IndiaCast Media Distribution Private Limited - TV18 and Viacom18
 has announced a Strategic Joint Venture called IndiaCast for the
 purpose of Domestic and International Channel distribution, Placement
 Services and Content Syndication for TV18, Viacom18, A E Networks I
 TV18 and Eenadu Group across all platforms including Cable, DTH, IPTV,
 HITS, and MMDS. In addition to 26 channels of above mentioned group,
 IndiaCast will also distribute Sun Network Channels & Disney Channels
 in Hindi Speaking Markets (HSMs).
 
 As at March 31, 2013 TV18 is holding 100% shares of IndiaCast and
 Viacom 18 is in the process of acquiring 50% stake in IndiaCast to make
 it a 50:50 JV with the Company.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 Pursuant to Accounting Standard (AS)-21 on Consolidated Financial
 Statements read with Accounting Standard (AS) - 27 on accounting on
 Joint Ventures, prescribed by the Companies (Accounting Standards)
 Rules 2006, the Audited Consolidated Financial Statements are provided
 in this Annual Report.
 
 STATUTORY AUDITORS
 
 The term of the Statutory Auditors, M/s. Deloitte Haskins & Sells,
 Chartered Accountants, expires at the conclusion of the ensuing Annual
 General Meeting and are eligible for re-appointment.
 
 The Company has received a certificate from M/s. Deloitte Haskins &
 Sells, Chartered Accountants, to the effect that their appointment, if
 made, would be within the prescribed limits under Section 224 (1B) of
 the Companies Act, 1956 and they are not disqualified for such
 re-appointment within the meaning of section 226 of such Act.
 
 Your Board has duly examined the Report issued by the Statutory
 Auditor''s of the Company on the Accounts for the financial year ended
 March 31, 2013. The Notes forming part of Annual Audited Accounts for
 the financial year ended March 31, 2013 are self explanatory and hence
 do not call for any further clarifications.
 
 COST AUDITORS
 
 Pursuant to the Cost Audit Order as notified by the Ministry of
 Corporate Affairs (Cost Audit Branch) vide circular dated May 2, 2011
 read with Cost Accounting Records (Telecommunication Industry) Rules
 2011 as notified by the Ministry of Corporate Affairs (MCA) vide GSR
 869(E) dated December 7, 2011, the Company has appointed, M/s Pramod
 Chauhan & Associates, as the Cost Auditor of the Company for the
 financial year 2013-14 for conducting the audit of the Cost Records of
 the Company. The Cost Audit Report would be submitted to the Central
 Government within the time as prescribed in the relevant statute / MCA
 circular.
 
 The Company was required to submit the Compliance Report pertaining to
 cost records for the Financial Year 2011-12 by February 28, 2013 with
 the Central Government which the Company has submitted on January 11,
 2013.  Further for financial year 2012-13, the Company has to submit
 the Cost Audit Report by September 30, 2013, which shall be submitted
 in due course.
 
 CORPORATE GOVERNANCE
 
 Your Company has been practicing principles of good Corporate
 Governance over the years. The endeavor of the Company is not only to
 comply with the regulatory requirements but also practice good
 Corporate Governance that lays strong emphasis on integrity,
 transparency and overall accountability. A separate section on
 Corporate Governance along with a certificate from the Practicing
 Company Secretary confirming the compliance as stipulated in Clause 49
 of the Listing Agreement is annexed and forms part of this Annual
 Report.
 
 PARTICULARS OF EMPLOYEES
 
 The names and other particulars of employees are required to be set out
 as an annexure to the Directors Report as required under Section
 217(2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975 as amended by Companies
 (Particulars of Employees) Rules, 2011. In terms of the provisions of
 section 219(1) (b)(iv) of the Companies Act, 1956, the Annual Report
 excluding the aforesaid annexure is being sent out to the members and
 others entitled to receive the Annual report of the Company. However
 any member who is interested in obtaining such information may send a
 written request for the same to the Company Secretary of the Company at
 the Corporate Office address of the Company.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORP- TION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the
 Companies (Disclosures of particulars in the report of the Board of
 Directors) Rules, 1988, the following information is provided:
 
 A.  Conservation of Energy
 
 Your Company is not an energy intensive unit; however possibilities are
 continuously explored to conserve energy and to reduce energy
 consumption at production & editing facilities, studios and
 workstations of the Company.
 
 B.  Technology absorption
 
 Your Company is conscious of implementation of latest technologies in
 key working areas. Technology is ever- changing and employees of your
 Company are made aware of the latest working techniques and
 technologies through workshops, group e-mails, and discussion sessions
 for optimum utilization of available resources and to improve
 operational efficiency.
 
 C.  Foreign Exchange Earnings and Outgo
 
 Disclosure of foreign exchange earnings and outgo as required under
 Rule 2(C) is given in Note no. 31 of Notes forming part of the
 financial statements forming part of the Audited Annual Accounts of
 the Company for the financial year 2012-13.
 
 The total foreign exchange earning was of Rs. 1,325.92 lakhs in the
 financial year 2012-13 as against Rs. 1,088.86 lakhs during the
 previous financial year. The total foreign exchange expenditure during
 the year under review was Rs. 4,924.52 lakhs as against Rs. 3,943.74
 lakhs during the previous financial year ended March 31, 2012.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to place on record their sincere appreciation of
 the contribution made by employees at all levels for achieving the
 outstanding performance and goals of the Company. Your Directors also
 convey their appreciation to Joint Venture partners, media agencies,
 viewers, business associates, bankers for their faith and confidence
 reposed in the Company and also would like to appreciate various
 regulatory and Government authorities for their assistance and
 co-operation and look forward to their continued support in future.
 
                            For and on behalf of the Board of Directors
 
 Place : Noida                                            Manoj Mohanka
 
 Date: 13 May, 2013                                            Chairman
Source : Dion Global Solutions Limited
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