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HT Media Ltd.

BSE: 532662 | NSE: HTMEDIA |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE501G01024 | SECTOR: Media & Entertainment

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

Dear Members,

The Directors are pleased to present their Report, together with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended on March 31, 2018.

FINANCIAL RESULTS (STANDALONE)

Your Company’s performance during the financial year ended on March 31, 2018, along with previous year’s figures is summarized below:

(Rs. in Lacs)

Particulars

2017-18

2016-17

Total Income

1,59,878

1,58,893

Earnings before interest, tax, depreciation and amortization (EBITDA) from continuing operations

43,121

24,034

Add: Exceptional Item

(1,405)

-

Less: Depreciation

9,674

9,747

Less: Finance cost

6,960

7,868

Profit/(Loss) before tax from continuing operations

25,082

6,419

Less: Tax Expense

- Current tax

-

-

- Adjustment of current tax related to earlier periods

618

(825)

- Deferred tax charge/(credit)

3,090

1,093

Total tax expense

3,708

268

Profit for the year

21,374

6,151

Add: Other Comprehensive Income (net of tax)

56

(5,502)

Total Comprehensive Income for the year (net of tax)

21,430

649

Opening balance in Retained Earnings

1,12,779

1,07,669

Add: Profit/ (Loss) for the year

21,374

6,151

Less: Items of other Comprehensive Income recognized directly in Retained Earnings

- Re-measurements of post-employment benefit obligation (net of tax)

(108)

61

Less: Dividend paid

931

931

Less: Tax on Dividend

56

56

Add: Adjustment of accumulated surplus of HT Media Employee Welfare Trust

9

7

Total Retained Earnings

1,33,283

1,12,779

DIVIDEND

Your Directors are pleased to recommend a dividend of RS.0.40 per Equity Share of RS.2/- each i.e. @ 20% (previous year -RS.0.40 per Equity Share of RS.2/- each i.e. @ 20%), for the financial year ended on March 31, 2018 and seek your approval for the same.

The proposed equity dividend payout (including Corporate Dividend Distribution Tax) would entail an outflow of RS.11.22 Crores (previous year RS.9.87 Crores).

The Dividend Distribution Policy framed pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) is appearing as “Annexure-A”, and is also available on the Company’s website viz. www.htmedia.in.

COMPANY PERFORMANCE AND FUTURE OUTLOOK

A detailed analysis and insight into the financial performance and operations of your Company for the year under review and future outlook, is appearing in Management Discussion and Analysis, which forms part of the Annual Report.

SCHEME OF ARRANGEMENT

With the view to create a separate and focused entity to support the ‘Entertainment & Digital Innovation Business’ of the Company, and to capitalize the growth opportunities in a focussed manner, the Board of Directors at its meeting held on August 25, 2017, approved a Scheme of Arrangement between the Company and Digicontent Limited (wholly owned subsidiary company) and their respective shareholders and creditors u/s 230 to 232 read with Section 66 and other applicable provisions of the Companies Act, 2013 (“Scheme”), which is subject to requisite approval(s). The Scheme, inter-alia, envisages demerger of ‘Entertainment & Digital Innovation Business’ of the Company and transfer and vesting thereof into Digicontent Limited, on a going concern’ basis w.e.f. March 31, 2018 (Appointed Date).

Pursuant to the directions of Hon’ble National Company Law Tribunal (‘NCLT’), meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company were convened on June 9, 2018, wherein, the Scheme was approved by them with requisite majority. The petition seeking sanction of the Scheme, is pending before NCLT.

RISK MANAGEMENT

Your Company has a robust risk management framework to identify, evaluate and mitigate business risks. The Company has constituted a Risk Management Committee of Directors which reviews the identified risks and appropriateness of management’s response to significant risks. A detailed statement indicating development and implementation of a risk management policy for the Company, including identification of various elements of risk, is appearing in the Management Discussion and Analysis.

EMPLOYEE STOCK OPTION SCHEME

The information required to be disclosed pursuant to the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI’s circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 (“SEBI ESOP Regulations”) is available on the Company’s website viz. www.htmedia.in. The ‘HTML Employee Stock Option Scheme’ and ‘HTML Employee Stock Option Scheme - 2009’ are in compliance with SEBI ESOP Regulations. Further, during the year under review, voting rights on the shares of the Company held by HT Media Employee Welfare Trust were not exercised in accordance with SEBI ESOP Regulations.

ALTERATION OF OBJECTS CLAUSE OF MEMORANDUM OF ASSOCIATION

During the year under review, the Company has altered the Objects Clause of Memorandum of Association to enlarge/ broaden the existing objects, which can be advantageously combined with the existing businesses of the Company. Further, education business was incorporated in the Objects Clause, in view of its synergy with the existing businesses of the Company. The Members have accorded their approval to the aforesaid alterations in the Objects Clause of the Memorandum of Association, by an overwhelming majority, by way of postal ballot.

SUBSIDIARY COMPANIES

During the year under review, your Company incorporated a wholly owned subsidiary company namely, ‘HT Digital Ventures Limited’. The name of this Company was changed to ‘Digicontent Limited’ (‘DCL’) w.e.f. October 24, 2017. As on March 31, 2018 DCL holds 42.83% equity stake in another subsidiary company namely, ‘HT Digital Streams Limited’.

Your Company has acquired “Desimartini.com” business from Topmovies Entertainment Limited, a wholly-owned subsidiary company during FY-18, as a ‘going concern’ on slump-sale basis.

The Hon’ble National Company Law Tribunal (‘NCLT’) vide its order dated October 17, 2017 sanctioned a composite Scheme of Capital Reduction and Arrangement (“Scheme”) under the applicable provisions of the Companies Act, 1956 and the Companies Act, 2013 between the Subsidiary Companies viz. Firefly e-Ventures Limited (“Firefly”), HT Digital Media Holdings Limited (“HT Digital”) and HT Mobile Solutions Limited (“HT Mobile”) and their respective shareholders and creditors, for capital reduction of HT Digital and Firefly, and demerger of HT Campus Undertaking of Firefly and transfer and vesting thereof to and in HT Mobile. Accordingly, the said Scheme has come into effect from the Appointed Date i.e. June 30, 2016.

During the year under review, a Scheme of Arrangement between two subsidiary companies viz. India Education Services Private Limited (‘Demerged Company’) and Hindustan Media Ventures Limited (‘Resulting Company’) and their respective shareholders under Sections 230 to 232 and other applicable provisions ofthe Companies Act, 2013, for the demerger of Business-to-Consumer segment (B2C) from the Demerged Company and vesting thereof to the Resulting Company on a ‘going concern’ basis, was approved by the Board of Directors of the respective companies, subject to requisite statutory and other approvals.

In terms of the applicable provisions of Section 136 of the Companies Act, 2013, the Financial Statements of subsidiary companies for the financial year ended on March 31, 2018 are available for inspection by the Members of the Company at the registered office of the Company during business hours. The same are also available on the Company’s website viz. www.htmedia.in.

A report on the performance and financial position of each of the subsidiary company in the prescribed Form AOC-1 is annexed to the Consolidated Financial Statements and hence, not reproduced here. The ‘Policy for determining Material Subsidiary(ies)’, is available on the Company’s website viz. www.htmedia.in.

The contribution of the subsidiary companies to the overall performance of your Company is outlined in Note No. 53 of the Consolidated Financial Statements for the financial year ended March 31, 2018.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Directors

During the year under review, Shri N.K. Singh, Non-executive Independent Director tendered resignation from the Board of Directors of the Company w.e.f. November 28, 2017. The Board places on record its deep appreciation for the valuable contribution made by Shri N.K. Singh during his tenure on the Board of Directors of the Company.

Further, on the recommendation of the Nomination & Remuneration Committee, the Board of Directors accorded its approval to the following:

a) Appointed Shri Vivek Mehra (DIN: 00101328) as Non-executive Independent Director w.e.f. January 12, 2018, for a period of 5 (five) consecutive years, for a term upto March 31, 2022, subject to approval of the Members.

b) Re-appointed Smt. Shobhana Bhartia (DIN: 00020648) as Chairperson & Editorial Director (Managing Director in terms of Companies Act, 2013) for a period of 5 (five) years w.e.f. July 1, 2018, subject to approval of the Members.

c) Appointed Shri Praveen Someshwar (DIN: 01802656) as Managing Director & Chief Executive Officer of the Company for a period of 5 (five) years w.e.f. August 1, 2018, subject to approval of the Members.

The Board commends for approval ofMembers at the ensuing Annual General Meeting (AGM), the appointment/re-appointment of:

(1) Shri Vivek Mehra as Non-executive Independent Director; (2) Smt. Shobhana Bhartia as Chairperson & Editorial Director; and (3) Shri Praveen Someshwar as Managing Director & Chief Executive Officer.

In accordance with the provisions of the Companies Act, 2013, Shri Shamit Bhartia retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Your Directors commend re-appointment of Shri Shamit Bhartia, for approval of the Members at the ensuing AGM.

All the Independent Directors of the Company have confirmed that they meet the criteria of independence as prescribed under both, the Companies Act, 2013 and SEBI Listing Regulations. The Independent Directors have also confirmed that they have complied with the ‘Code of Conduct’ of the Company.

Brief resume, nature of expertise, details of directorship held in other companies of the Directors proposed to be appointed / re-appointed at the ensuing AGM, along with their shareholding in the Company as stipulated under Secretarial Standard-2 and Regulation 36 of the SEBI Listing Regulations, is provided in the Notice of the ensuing AGM.

Key Managerial Personnel

Shri Rajiv Verma stepped down as Chief Executive Officer ofthe Company. He was relieved from his duties w.e.f. June 30, 2018. The Board places on record its sincere appreciation for the dedicated efforts put in by him during his tenure.

Further, on the recommendation of Nomination and Remuneration Committee, the Board of Directors appointed Shri Praveen Someshwar as Managing Director & Chief Executive Officer (KMP u/s 203 of the Companies Act, 2013) w.e.f. August 1, 2018.

PERFORMANCE EVALUATION

In line with the requirements under the Companies Act, 2013 and the SEBI Listing Regulations, the Board undertook a formal annual evaluation of its own performance and that of its Committees & Directors.

The Nomination and Remuneration Committee framed questionnaires for evaluation of performance of the Board as a whole, Board Committees (viz. Audit Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Nomination and Remuneration Committee); Directors and the Chairperson, on various criteria outlined in the ‘Guidance Note on Board Evaluation’ issued by SEBI on January 5, 2017.

The Directors were evaluated on various parameters such as, value addition to discussions, level of preparedness, willingness to appreciate the views of fellow directors, commitment to processes which entail amongst other matters, risk management, compliance and control, commitment to all stakeholders (shareholders, employees, vendors, customers etc.), familiarization with relevant aspects of company’s business / activities etc. Similarly, the Board as a whole was evaluated on parameters which included its composition, strategic direction, focus on governance, risk management and financial controls.

A summary report of the feedback of Directors on the questionnaire(s) was considered by the Nomination & Remuneration Committee and the Board of Directors. The Board would endeavour to use the outcome of the evaluation process constructively, to improve its own effectiveness and deliver superior performance.

AUDITORS

Statutory Auditors

In compliance of the of provisions the Companies Act, 2013 with respect to mandatory rotation of Statutory Auditors, the Members of the Company at their 15th AGM held on September 25, 2017, have appointed Price Waterhouse & Co Chartered Accountants LLP (PwC) [Firm Registration No. 304026E/E-300009], as Statutory Auditors of the Company, to hold office for a term of 5(five) consecutive years.

The Auditors’ Report of PwC on Annual Financial Statements (Standalone and Consolidated) for the financial year ended on March 31, 2018, is an unmodified opinion i.e. it does not contain any qualification, reservation or adverse remark.

Cost Auditor

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, and on the recommendation of the Audit Committee, the Board of Directors has appointed M/s. K.G. Goyal & Associates, Cost Accountants, New Delhi (Registration No. FRN000024), as Cost Auditors, to carry out the cost audit of records of FM Radio business of the Company in relation to the financial years ended / ending March 31, 2017, March 31, 2018 and March 31, 2019.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board of Directors had appointed Shri N.C. Khanna, Company Secretary-in-Practice (C.P No. 5143) as Secretarial Auditor, to conduct the Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report is annexed herewith as “Annexure - B”. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instance of fraud to the Audit Committee, pursuant to Section 143 (12) of the Companies Act, 2013 and rules made thereunder.

RELATED PARTY TRANSACTIONS

All contracts /arrangements /transactions entered into by the Company with related parties during the year under review, were in ordinary course of business of the Company and on arms’ length terms. The related party transactions were placed before the Audit Committee for review and approval. During the year, the Company did not enter into any contract /arrangement /transaction with related party, which could be considered material in accordance with the Company’s ‘Policy on Materiality of and dealing with Related Party Transactions’ and accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable. The aforesaid Policy is available on the Company’s website viz. www.htmedia.in.

Reference of the Members is invited to Note no. 36 of the Standalone Annual Financial Statements, which sets out the related party disclosures as per Ind AS-24.

CORPORATE SOCIAL RESPONSIBILTY

As a responsible corporate citizen, your Company is committed to undertake socially useful programmes for welfare and sustainable development of the community at large. The Company has in place, the Corporate Social Responsibility (CSR) Committee of Directors in terms of Section 135 of the Companies Act, 2013. The composition and terms of reference of the CSR Committee are provided in the Report on Corporate Governance which forms part of the Annual Report. The CSR Committee has formulated and recommended to the Board, a CSR Policy outlining CSR projects/activities to be undertaken by the Company, during the year under review. The CSR Policy is available on the Company’s website viz. www.htmedia.in.

The Annual Report on CSR for FY 18 is annexed herewith as “Annexure - C”.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013, your Directors state that:

i. in the preparation of the annual accounts for the financial year ended on March 31, 2018, the applicable Accounting Standards have been followed and there are no material departures;

ii. such 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 as on March 31, 2018; and of the profit of the Company for the year ended on March 31, 2018;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a ‘going concern’ basis;

v. proper internal financial controls were in place and that such internal financial controls were adequate and operating effectively; and

vi. systems have been devised to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating effectively.

DISCLOSURES UNDER THE COMPANIES ACT, 2013

Borrowings and Debt Servicing: During the year under review, your Company has met all its obligations towards repayment of principal and interest on loans availed.

Particulars of loans given, investments made, guarantees /securities given: The details of investments made and loans/ guarantees/securities given, as applicable, are given in the notes to the Annual Standalone Financial Statements.

Board Meetings: A yearly calendar of board meetings is prepared and circulated in advance to the Directors. During the financial year ended on March 31, 2018, the Board met six times on May 19, 2017, July 18, 2017, August 25, 2017, October 17, 2017, January 12, 2018 and February 6, 2018. For further details of these meetings, Members may please refer Report on Corporate Governance which forms part of this Annual Report.

Committees of the Board: At present, seven standing committees of the Board of Directors are in place viz. Audit Committee, Nomination & Remuneration Committee, CSR Committee, Banking & Finance Committee, Investment Committee, Stakeholders’ Relationship Committee and Risk Management Committee. During the year under review, the recommendations of the aforesaid Committees were accepted by the Board.

Remuneration Policy: The Remuneration Policy of the Company on appointment and remuneration of Directors, Key Managerial Personnel & senior management, as prescribed under Section 178 (3) of the Companies Act, 2013 and SEBI Listing Regulations, is available on the Company’s website viz. www.htmedia.in. The Remuneration Policy, includes, inter-alia, the criteria for appointment of Directors, KMPs and senior management personnel, their remuneration structure and disclosures in relation thereto.

Vigil Mechanism: The Vigil Mechanism, as envisaged in the Companies Act, 2013 & rules made thereunder, and the SEBI Listing Regulations, is addressed in the Company’s “Whistle Blower Policy”. In terms of the Policy, directors/employees/stakeholders of the Company may report concerns about unethical behaviour, actual or suspected fraud or any violation of the Company’s Code of Conduct. The Policy provides for adequate safeguards against victimization of the Whistle Blower. The Policy is available on the Company’s website viz. www.htmedia.in.

Particulars of employees and related disclosures: In accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details of employees remuneration are set out in the “Annexure - D” to this Report. In terms of the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Board’s Report is being sent to the Members without this annexure. However, the same is available for inspection by the Members at the Registered Office of the Company during business hours, 21 days before the ensuing AGM. Members interested in obtaining a copy of the said Annexure, may write to the Company Secretary at the Registered Office of the Company.

Disclosures under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as “Annexure - E”.

Extract of Annual Return: An Extract of the Annual Return for the financial year ended on March 31, 2018 in Form MGT-9 is annexed herewith as “Annexure - F”.

Corporate Governance: The report on Corporate Governance in terms of SEBI Listing Regulations, forms part of this Annual Report. The certificate issued by Company Secretary-in-Practice, is annexed herewith as “Annexure - G”.

Conservation of energy, technology absorption and foreign exchange earnings & outgo: The information on conservation of energy, technology absorption and foreign exchange earnings & outgo is annexed herewith as “Annexure - H”.

SECRETARIAL STANDARDS

Your Directors state that applicable revised Secretarial Standards i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively have been duly followed by the Company.

GENERAL

Your Directors state that no disclosure is required in respect of the following matters as there were no transactions/events in relation thereto, during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme of the Company.

There was no change in the share capital of the Company during the year under review.

The Company has not transferred any amount to the General Reserve during the year under review.

The Board of Directors at its meeting held on July 18, 2018 have accorded ‘in-principle’ approval to a draft term sheet and the transactions contemplated therein, including the broad contours of a proposed composite scheme of arrangement and amalgamation under Sections 230-232 and other applicable provisions of the Companies Act, 2013, between your Company, HT Music & Entertainment Company Limited (wholly owned subsidiary company) (HTM), Next Radio Limited (NRL), and Next Mediaworks Limited (NMW) and their respective shareholders. Insofar as your Company is concerned, the said Scheme provides, inter-alia, demerger of the FM radio business of HT Media Limited (except the radio stations operated in Hyderabad and Uttar Pradesh), on a ‘going concern’ basis and transfer and vesting of the same to NMW, and amalgamation of HTM with NMW. Save and except to the above, no material changes/ commitments have occurred after the end of the financial year 2017-18 and till the date of this report, which would affect the financial position of your Company.

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the ‘going concern’ status and Company’s operations in future.

Your Company has in place adequate internal financial controls with reference to the financial statements. The internal control system is supplemented with an extensive program of internal audits and their reviews by the management. The in-house internal audit function supported by professional external audit firms, conduct comprehensive risk focused audits across locations and functions to maintain a proper system of control. The Audit Committee of the Board oversees the adequacy and effectiveness of the internal control environment through regular reviews of the audit findings.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the co-operation extended by all stakeholders, including Ministry of Information & Broadcasting and other government authorities, shareholders, investors, readers, advertisers, browsers, listeners, customers, banks, vendors and suppliers. Your Directors also place on record their deep appreciation of the committed services of the executives and employees of the Company.

For and on behalf of the Board

(Shobhana Bhartia)

Date: July 18, 2018 Chairperson & Editorial Director

Place: New Delhi DIN: 00020648

Director’s Report