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Zee Entertainment Enterprises Ltd.

BSE: 505537 | NSE: ZEEL |

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Series: EQ | ISIN: INE256A01028 | SECTOR: Media & Entertainment

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Annual Report

For Year :
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Director’s Report

Your Directors are pleased to present the 39th Annual Report of your Company’s business and operations along with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31, 2021.

1. FINANCIAL RESULTS

The financial performance of your Company for the financial year ended March 31, 2021 is summarized below: C million)

Particulars

Standalone Year Ended

Consolidated Year Ended

31.03.2021

31.03.2020

(Restated)*

31.03.2021

31.03.2020

Revenue from Operations

66,654

72,935

77,299

81,299

Other Income

2,624

2,309

1,104

2,836

Total Income

69,278

75,244

78,403

84,135

Total Expenses

51,988

60,269

64,580

71,705

Share of Associates / Joint Ventures

-

-

(1)

(24)

Exceptional Items

(1,266)

(2,843)

(1,266)

(2,843)

Profit Before Tax

16,024

12,132

12,556

9,563

Provision for Taxation (net)

4,814

4,614

4,625

4,317

Profit after Tax

11,210

7,518

7,931

5,246

*refer note 50 of Standalone financial statements for details.

There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of Zee Entertainment Enterprises Limited (‘the Company’ or ‘ZEE’). Based on the internal financial control framework and compliance systems established in the Company, the work performed by Statutory, Internal, Secretarial Auditors and reviews performed by the management and/or the Audit Committee of the Board, your Board of Directors (‘Board’) is of the opinion that the Company’s internal financial controls are adequate and working effectively during the financial year 2020-21.


CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of the Companies Act, 2013 (‘Act’), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) and applicable Accounting Standards, the consolidated audited financial statements of the Company for the financial year 2020-21 together with the Auditors’ Report form part of this Annual Report.

2. COVID-19

The outbreak of Coronavirus (COVID-19) pandemic has caused significant disturbance to the economic activity across the globe. Businesses have been forced to temporarily cease or limit their operations since Mar-20 in India. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing and closures of non-essential services triggered significant disruptions across businesses, resulting in one of the worst economic slowdowns that the country has seen.

As an industry leader, your Company ensured that audiences continued to receive entertainment content through their television sets or mobile phones as they stayed indoors during the lockdown. The Company was quick to embrace and utilize technological solutions to create as much fresh content as possible for its consumers despite the restrictions imposed during the lockdown. From shooting at home, to shifting shoot locations outside containment zones, to acquiring licensed content, the Company tried to keep the consumers engaged with unique solutions. It also leveraged technology solutions across its key functions, to create a bedrock for creative innovations in content

offering. The Company enabled remote content production on mobile phones and professional cameras by using AV production technologies to support broadcast, digital and social platforms. These initiatives ensured that your Company stayed connected with its audience through the period of disruption.

The health and safety of all employees has always been the top priority of your Company. In line with the guidelines issued by the Government, the Company implemented key measures across every touchpoint to ensure the safety of its people. The Company has always been agile in adapting to change, which made the transition to ‘Work from Home’ operations swift and smooth, ensuring business continuity and minimal disruption to viewers. The teams were quick to adapt to the new way of working with all the meetings across business verticals and functions being conducted online. For critical operations which needed people to be present onsite, proactive steps were taken in transforming the workspace keeping social distancing norms at the fore. Safety and hygiene protocols, including alternate seating arrangements, a clean desk policy and temperature screening at all entry points ensured safety of the employees. Your Company also set up a 24-hour emergency helpline with doctors and counsellors to address medical queries and the emotional well-being of its people. The Company also partnered with various companies for providing services like testing kits, isolation facilities, ambulance and food delivery services for employees and their families. Your Company continued to take critical steps in ensuring the safety of its people by initiating a vaccination program for all its employees and their families as soon as the government allowed private sector’s participation.

3. DIVIDEND

Equity Shares: Your Directors has recommended payment of ? 2.50 per equity share of the face value of ? 1 each as final dividend for the financial year ended March 31, 2021, subject to the approval of the Members of the Company at the ensuing Annual General Meeting (‘AGM’). This final dividend shall be payable on the outstanding Equity Share Capital of the Company as on Record Date i.e. September 3, 2021. The expected outflow on account of equity dividend, based on current Paid-up Equity Share Capital of the Company, would aggregate to ? 2401 million.

In view of the changes made under the Income-tax Act, 1961, by amending the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. Accordingly, the company shall make the payment of the final dividend after deduction of tax at source.

The dividend recommended is in accordance with the Dividend Distribution Policy of the Company which is available on the Company’s website at www.zee.com.

Preference Shares: In accordance with the terms of Listed 6% Cumulative Redeemable Non-Convertible Preference Shares issued as Bonus Shares in 2014 (‘Bonus Preference Shares’), the Company had remitted an aggregate Preference Dividend of ? 466.8 million, comprising of:

• Pro-rata Preference Dividend of ? 0.11145 on the redemption value of ? 2 per Bonus Preference Share for the period from April 1, 2020 till the Redemption date of March 5, 2021; and

• Preference Dividend of ? 0.12 per share for FY 2020-21 on the Bonus Preference Shares of ? 2 per share post redemption.

Transfer to Reserves

The closing balance of the retained earnings of the Company for financial year 2020-21, after all appropriation and adjustments was ? 65,047 million.

4. BUSINESS OVERVIEW

During the year under review, your Company, like almost every other company, faced disruption due to COVID-19. The nationwide lockdown implemented in the first quarter and the economic slowdown which followed created massive headwinds in the first half of the fiscal. There was an impact on both operations as well as financial performance during the year due to the pandemic. Original content production came to a complete halt for a period of around 3 months leading to a drop in viewership and revenue. As per the FICCI EY Report, Indian M&E industry declined by 13% YoY in CY20. The decline was led mainly by advertising which saw a degrowth of 25%.

Television industry advertising revenues saw a degrowth of 22% in CY20 and your Company performed slightly better with 20% decline in its advertising revenues. The subscription revenues of the Company were resilient and registered a 5.2% like-to-like growth during the year. In January 2020, TRAI, the industry regulatory body had issued a set of amendments to the tariff order which had been implemented earlier that year. These changes were legally challenged by various broadcasters, distributors and industry bodies. As the court had mandated that a status quo be maintained on the subscription pricing till the verdict is announced, the ability of your Company to grow broadcast subscription revenue was limited during the year. Digital content consumption got a boost in the last fiscal due to absence of fresh content on television for around 3 months. ZEE5 capitalized on this trend by releasing over 75 shows and original movies on the platform last year which led to a growth in its paid subscriber base. ZEE5 has firmly established itself as the biggest publisher of original digital content in India, catering to audiences across the country. During the year, movie production and distribution calendar was impacted due to cinema halls being completely or partially shut for most of the year. Zee Music Company’s plans were also hampered due to lack of new movies released during the year, however, the music label continued to expand its music library through acquisition of music titles across languages. As per the

FICCI-EY report, the Indian M&E industry is expected to grow at a CAGR of 17% to reach ? 2,234 billion by 2023.

In the Domestic Broadcast Business, your Company exited the year with an all-India viewership share of 18.9% in the last quarter. The Company launched 2 new channels, further strengthening its position as a pan-India network with the widest language footprint.

In the Hindi General Entertainment segment, Zee TV was the #3 channel during the year and &TV continued to focus on the viewers from the states of the Hindi heartland with its programming line-up. Zee Anmol was relaunched on the DD FreeDish platform in June 2020 which led to a sharp jump in its viewership.

In the Hindi movie segment, your Company’s portfolio of movie channels further strengthened its #1 position, driven by a strong catalogue of movies across genres.

In the Regional markets, Zee Kannada continued to be the #1 channel and Zee Telugu showed strong improvement in market share as the #2 player. Zee Bangla and Zee Marathi lost their #1 positions during the year and are working on a content revamp plan to help win back leadership. Zee Keralam became the fastest GEC to reach #2 position in April 2021 in less than 2.5 years of launch. The new entrants in the portfolio - Zee Biskope, Zee Punjabi, Zee Thirai and Zee Pichhar, exhibited strong performance in the first year.

In the International Broadcast Business, your Company continued to expand the reach of its channels across geographies with new distribution partnerships. Company’s content in 18 languages, including 8 foreign languages, is available in more than 170 countries.

ZEE5, your Company’s OTT platform, witnessed significant growth across all user parameters. The platform had 72.6mn and 6.1mn global MAUs and DAUs, respectively in March 2021, with an average watch-time of 156 minutes per viewer during the month. Along with releasing a strong slate of original shows and movies, the platform also entered into partnerships with key players across the digital eco-system to make its content available to a wider audience. ZEE5 continued with its global expansion with launch in key international markets, including USA in June 2021.

Zee Studios launched ZeePlex during the year, a pay-per-view platform which enabled consumers to watch new movies from the comfort of their homes while cinema halls continued to remain shut for most of the year. Zee Studios produced/distributed 8 movies during the year, with a mix of theatrical, ZeePlex and direct to digital (ZEE5) releases. Zee Music Company, your Company’s music publishing arm, continued to expand its music catalogue across languages and maintained its position as the second most subscribed music channel on YouTube. Zee Live, the live entertainment vertical, launched digital entertainment IPs across various entertainment genres due to restrictions on large physical gatherings.

5. CHANGES IN CAPITAL STRUCTURE

During the year under review, your Company had:

• Redeemed 20% of Nominal value of Bonus Preference Shares, on the 7th anniversary and as per the terms of its issuance, resulting in outflow of ? 4034 million towards the said redemption at the rate of ? 2 per Preference Share. Consequent to this redemption, the face value of Preference Share was changed to ? 2 each. As required under Section 55 of the Act, an amount equivalent to such Redemption value was credited to Capital Redemption Reserve Account of the Company. Further, pursuant to the provisions of the Income-tax Act, 1961, the said redemption amount was treated as dividend and necessary taxes were deducted thereon;

• Issued and allotted 21,240 Equity Shares of ? 1 each upon exercise of stock options granted under the Company’s ESOP Scheme.

Consequent to the above redemption and issuance of securities, the Paid-up Share Capital of the Company as on March 31, 2021 stood at ? 4,994,389,099 comprising of 960,504,475 equity shares of ? 1 each and 2,016,942,312 Bonus Preference Shares of ? 2 each. Subsequent to closure of the financial year, your Company had issued and allotted 11,240 equity shares upon exercise of stock options granted under the ESOP Scheme.

As on March 31, 2021, promoters’ shareholding in the Company was 3.99%.

6. CREDIT RATING

During the year under review, Brickwork Ratings India Private Limited had revised the rating assigned to the Company as the issuer of the Listed Bonus Preference Shares to ‘BWR AA-’ denoting Credit Watch with Negative Implications due to decline in profitability and margin for the year ended FY20. Subsequently, the rating was revised to ‘BWR A’.

7. SUBSIDIARIES, ASSOCIATES & JOINT VENTURES

As on March 31, 2021, your Company had 26 (twenty-six) subsidiaries comprising of 8 (eight) domestic subsidiaries and 18 (eighteen) overseas direct and step-down subsidiaries, one Associate and one Joint Venture Company.

During the year under review:

• Zee TV USA. Inc, an overseas subsidiary of the Company was dissolved with effect from May 1, 2020.

• Zee Technologies (Guangzhou) Limited, an overseas subsidiary of the Company was dissolved with effect from December 9, 2020.

• 49% equity stake in Fly-By-Wire International Private Limited, subsidiary of the Company was sold with effect from July 31, 2020.

• The Company sold 100% equity stake in its four wholly owned subsidiaries namely Zee Unimedia Limited, Zee Digital Convergence Limited, India Webportal Private Limited and Zee Network Distribution Limited to another wholly owned subsidiary Company namely Zee Studios Limited (earlier known as Essel Vision Productions Limited). Accordingly, Zee Unimedia Limited, Zee Digital Convergence Limited, India Webportal Private Limited ceased to be direct wholly owned subsidiaries of the Company and became step-down subsidiaries of the Company with effect from September 30, 2020. Likewise, Zee Network Distribution Limited ceased to be direct wholly owned subsidiary of the Company and became step-down subsidiary of the Company with effect from October 22, 2020.

• The Board of Directors of the Company had, at its meeting held on December 17, 2020, subject to requisite approvals, considered and approved to transfer its Digital Publishing Business Division to Rapidcube Technologies Private Limited (‘Rapidcube’) through a Business Transfer Agreement at a consideration of ? 638 million. The Company is in process of obtaining requisite Regulatory approvals for the said transaction.

• The Company has acquired film production and distribution business as a going concern, on a slump sale basis from Zee Studios Limited (formerly known as Essel Vision Productions Limited), a wholly owned subsidiary of the Company, for a cash consideration of ? 2695 million and on such terms and conditions as contained in the Business Transfer Agreement (‘BTA’) with effect from close of the business hours on February 28, 2021.

Apart from the above, there was no change in the number of Subsidiary/ Associate/Joint Venture of the Company either by way of acquisition or divestment or otherwise during the year under review.

Your Company has obtained a certificate from its Statutory Auditors certifying that the Company is in compliance with the FEMA regulations with respect to the downstream investments.

In accordance with the provisions of Regulation 16(1)(C) of the Listing Regulations pertaining to the thershold for determining Material Subsidiary of the Company, ATL Media Limited, a wholly owned overseas subsidiary was a Material Subsidiary of the Company during the financial year 2020-21.

The policy for determining material subsidiaries of the Company is available on the website of the Company at www.zee.com.

In compliance with Section 129 of the Act, a statement containing the salient features of the financial statements of all subsidiary, associate and joint venture companies of the Company in the prescribed Form AOC-1 forms part of this Annual Report as Annexure A.

In accordance with Section 136 of the Act, the Audited Financial Statements including the Consolidated Financial Statements and related information of the Company and the financial statements of each of subsidiary companies are available on the website of the Company at www.zee.com.

8. EMPLOYEE STOCK OPTION SCHEME

An aggregate of 36,185 Stock Options, issued by the Company in pursuance of ZEE ESOP Scheme 2009 to Mr. Punit Misra, President - Content and International Markets, were outstanding as on April 1, 2020. Upon exercise of vested Stock Options by Mr. Punit Misra, 21,240 Equity Shares were issued and allotted to him during FY 20-21 and 14,945 unvested Stock Options were outstanding as on March 31, 2021.

Requisite disclosures as required under Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is annexed to this Annual Report as Annexure B. The Statutory Auditors of the Company M/s. Deloitte Haskins & Sells LLP, Chartered Accountants have certified that the Company’s Employee Stock Option Scheme has been implemented in accordance with Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the shareholders.

Subsequent to closure of the financial year, 11,240 Equity Shares were issued and allotted to Mr. Punit Misra upon exercise of options vested in April 2021.

9. CORPORATE SOCIAL RESPONSIBLITY

During the year under review, total CSR obligation of the Company was ? 499.18 million.

The Company had contributed an aggregate of ? 500.04 million towards various CSR Projects detailed in the Annual Report on CSR annexed to this report which includes the CSR expenditure of ? 96.90 million, allocated for the ongoing project and transferred to ‘the Unspent CSR Account for FY 2020-21’ of the Company on April 29, 2021 as per provision of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 (‘CSR Rules’) as amended from time to time.

Your Company has obtained a certificate from its Statutory Auditors certifying that Company’s CSR expenditures towards ex-gratia payments to Daily Wage Earners, incurred during the financial year ended March 31, 2021, are in accordance with the General Circular No. 15 /2020 dated April 10, 2020 of Ministry of Corporate Affairs and provisions of Section 135 of the Act and CSR Rules.

In compliance with the provisions of Section 135 of the Act and CSR Rules as amended from time to time, Annual report on CSR activities for the financial year ended March 31, 2021 is annexed to this Annual Report as Annexure C.

10. CORPORATE GOVERNANCE AND POLICIES

In order to maximize shareholders value on a sustained basis, your Company has been constantly reassessing and benchmarking itself with well-established Corporate Governance practices besides strictly complying with the requirements of Listing Regulations, applicable provisions of the Act and

applicable Secretarial Standards issued by the Institute of Company Secretaries of India (‘ICSI’).

In terms of Schedule V of the Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company form part of this Annual Report. Management Discussion and Analysis Report and Business Responsibility Report as per Listing Regulations are presented in separate sections form part of this Annual Report.

In compliance with the requirements of the Act and the Listing Regulations, your Board had approved various Policies including Code of Conduct for Directors and Senior Management, Policy for Determining Material Subsidiary, Document Preservation Policy, Policy for Determination of Materiality of Events and Information, Fair Disclosure Policy, CSR Policy, Whistle Blower & Vigil Mechanism Policy, Policy on Dealing with Materiality of Related Party Transaction, Remuneration Policy, Insider Trading Code and Dividend Distribution Policy. These policies & codes along with the Directors Familiarization Program and terms and conditions for appointment of Independent Directors are available on Company’s website at www.zee.com.

In compliance with the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of your Board had fixed various criteria for nominating a person on the Board which inter alia includes the requirement of desired size and composition of the Board, age limits, qualification, experience, areas of expertise and independence of individual. The Committee had also approved in-principle that the term of an Independent Director shall not exceed 3 years.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

I. Board of Directors

The Company has a balanced Board with combination of Executive

and Non-Executive Directors. The Board currently comprises of 9 (nine)

Directors including 1 (one) Executive Director, 2 (two) Non-Executive

Directors and 6 (six) Independent Directors which includes one Independent

Woman Director.

During the year under review:

a. Mr. Punit Goenka was re-appointed as Managing Director & CEO of the Company at last AGM for a period of 5 (five) years with effect from January 01, 2020.

b. Ms. Alicia Yi was appointed as an Additional Director in the category of Independent Director of the Company with effect from April 24, 2020.

c. Mr. Subhash Chandra resigned as a Non-Executive Director of the Company with effect from August 18, 2020 and was appointed as Chairman Emeritus with effect from August 19, 2020.

d. Mr. R Gopalan was appointed as Chairman of the Board of Directors of the Company with effect from August 18, 2020.

e. Mr. Sasha Mirchandani and Mr. Vivek Mehra were appointed as Additional Directors in the category of Independent Directors of the Company with effect from December 24, 2020.

f. Mr. Manish Chokhani, upon completion of his second term as an Independent Director, ceased to be a Director of the Company on close of business hours on March 31, 2021. However, considering his contribution as an Independent Director, he was appointed as an Additional Director in the category of Non-Executive Non-Independent Director of the Company with effect from April 1, 2021.

Requisite intimations with respect to the changes in Directors during the year had been made to and approved by the Ministry of Information and Broadcasting.

In terms of Section 161 of the Act, Mr. Sasha Mirchandani, Mr. Vivek Mehra and Mr. Manish Chokhani shall hold office as Directors of the Company till the ensuing AGM. Your Company has received notices from Member(s) proposing their appointment and requisite proposals seeking your approval for the appointment of these Directors form part of the Notice of the ensuing AGM. Your Board recommends these proposals for approval of the Shareholders.

Declaration of independence from Independent Directors

In terms of Section 149 of the Act and Regulation 16 (1) (b) of the Listing Regulations, Mr. R Gopalan, Mr. Adesh Kumar Gupta, Mr. Piyush Pandey, Mrs. Alicia Yi, Mr. Sasha Mirchandani and Mr. Vivek Mehra are Independent Directors of the Company.

The Company has received the following declarations from all the Independent Directors confirming that:

• they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder, as well as of Regulation 16 (1) (b) of the Listing Regulations.

• in terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, they have registered themselves with the Independent Director’s database maintained by the Indian Institute of Corporate Affairs.

• in terms of Regulation 25(8) of the Listing Regulations, they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.

In terms of Regulation 25(9) of the Listing Regulations, based on the declarations from Independent Directors, the Board of Directors has ensured the veracity of the disclosures made under Regulation 25(8) of the Listing Regulations by the Independent Directors of the Company.

Number of meetings of the Board

During the financial year 2020-21, the Board of Directors met 9 (Nine) times. The details of the meetings of the Board of Directors of the Company convened and attended by the Directors during the financial year 202021 are given in the Corporate Governance Report which forms part of this Annual Report.

Retirement by rotation

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and the Articles of Association of the Company, Mr. Ashok Kurien, Non-Executive Director of the Company is liable to retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. Your Board recommends his re-appointment. A resolution seeking shareholders’ approval for his re-appointment along with other required details form part of the AGM Notice.

The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.

11. Key Managerial Personnel

Key Managerial Personnel of the Company as on March 31, 2021 comprised of Mr. Punit Goenka, Managing Director & CEO, Mr. Rohit Kumar Gupta, Chief Financial Officer and Mr. Ashish Agarwal, Chief Compliance Officer & Company Secretary.

12. PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and Listing Regulations, the evaluation of annual performance of the Directors, Board and Board Committees was carried out for the financial year 2020-21. The details of the evaluation process are set out in the Corporate Governance Report is annexed to this Annual Report.

Performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated in a separate meeting of Independent Directors.

Further, at the board meeting, followed by the meeting of the independent directors, the performance of the Board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

13. BOARD COMMITTEES

In compliance with the requirements of Act and Listing Regulations, your Board has constituted various Board Committees including Audit Committee, Risk Management Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. Details of the constitution of these Committees are available on the website of the Company at www.zee.com. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.

14. AUDITORS

Statutory Audit

At the 35th Annual General Meeting held on July 12, 2017, the Shareholders had approved the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants having Firm Registration No. 117366W/W-100018 as Statutory Auditors of the Company until the conclusion of 40th AGM to be held in the year 2022 subject to ratification by the Shareholders every year. Pursuant to the amendment to Section 139 of the Act, with effect from May 7, 2018, the requirement of seeking Shareholders’ ratification for continuance of Statutory Auditor at every AGM is no longer applicable and accordingly, the Notice of ensuing AGM does not include the proposal for seeking Shareholders’ ratification for continuance of Statutory Auditors.

The Statutory Audit Report of M/s Deloitte Haskins & Sells LLP., Chartered Accountants do not contain any qualification, reservation or adverse remarks on Standalone Audited Financial Results of the Company for the financial year 20-21.

Further, the Auditors’ qualification in respect of modified opinion on Consolidated Audited Financial Results has been dealt with in Note no. 36 of the Notes to the consolidated audited financial statements. The matter is subjudice relating to a dispute in an overseas subsidiary of the Company. The Auditors’ Report is enclosed with the financial statements in the Annual Report.

Secretarial Audit

During the year under review, M/s. Vinod Kothari & Co., Company Secretaries (Firm Registration No. P1996WB042300) were appointed as Secretarial Auditors to conduct the Secretarial Audit of your Company for the financial year ended March 31, 2021. The unqualified Secretarial Audit report is annexed to this Annual Report as Annexure E.

Further, pursuant to the provisions of Regulation 24A read with SEBI Circular no. CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Secretarial Compliance Report, issued by Secretarial Auditors of the Company, confirming that the Company had complied with all applicable SEBI Regulations/circulars/ guidelines during the financial year ended March 31, 2021, was filed with the stock exchanges and is annexed to this report as Annexure F. The remarks provided in these reports are self-explanatory.

Cost Audit

In compliance with the provisions of Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014, M/s. Vaibhav P Joshi & Associates, Cost

Accountant, (Firm Registration No. 101329) was appointed as Cost Auditor to conduct the Audit of Cost Records of the Company for financial year 2020-21. Requisite proposal for ratification of remuneration payable to the Cost Auditor for FY 2020-21 by the Members as required under the Rule 14 of Companies (Audit and Auditors) Rules, 2014, forms part of the Notice of ensuing AGM.

The Company has maintained cost accounts and records in accordance with the provisions of Section 148(1) of the Act read with the Companies (Cost Records and Audit) Rules, 2014.

15. HUMAN RESOURCES & PARTICULARS OF EMPLOYEES

Human Capital is the most precious asset for us. In a business of entertainment, where our creative boundaries are pushed every day, balanced teams have allowed us to continue to spot new opportunities, engage with our employees who we consider as our partners in a value-creating manner. The ideas which people bring to the table are priceless and we over-invest in ensuring that our workplace offers the most conducive environment to enhance this process of transforming ideas into extraordinary stories.

The organization has embarked on a journey to win in the new evolved market construct through a strategic roadmap for Zee 4.0. This has created a new version of the Company through restructuring of organization by Aggregating Content Creation, Integrating Digital assets, Streamlining International business, Integrating Revenue & Monetization Teams, A new platform for movies, the Music business. These busineses will be supported by corporate teams covering HR, Finance, Investor Relations, Procurement, Legal, Secretarial, Regulatory, Technology, Data and Corporate Communications that will be organized horizontally. The strategic restructuring will leverage the collective experience and expertise of the leadership team from diverse consumer segments, helping us immensely in achieving our set goals for the future. Furthermore, Success of ZEE 4.0 also requires realignment of the internal ecosystem through a series of initiatives under organization transformation built on the bedrock of 4 fountainheads viz. - Exponential thinking, Relentless Focused execution, Seamless collaboration, Hunger for impact. The incredible efforts put in by the HR team has also been recognized industry wide with Zee bagging the prestigious title of “Best HR Team of the Year” and also being awarded the 1st Runner up position for “Excellence in Learning & Development” at the 6th edition of Business World People’ HR Excellence Summit & Awards, 2021.

Our focus will be on reinventing our existing business models, with a sharp focus on maximizing our core, expanding into adjacent spaces and exploring new areas of business. We will furthermore strengthen this by focusing on the 9 key anchors viz. Culture, Collaboration, Capability, Leadership, Performance & Rewards, Communication, Employee Experience, Diversity & Employer Brand which will help align to the goals of Zee 4.0. As on March 31, 2021, your Company had 3,338 employees.

Requisite disclosures in terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with statement showing names and other particulars of employees drawing remuneration in excess of the limits prescribed under the said rules is annexed to this report as Annexure D.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is into the business of Broadcasting of General Entertainment Television Channels and extensively uses world class technology in its Broadcast Operations. However, since this business does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3) (m) of the Act read with the Companies (Accounts) Rules, 2014, are Nil / Not applicable. The information, as applicable, are given hereunder:

Conservation of Energy: Your Company, being a service provider, requires minimal energy consumption and every endeavor is made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.

Technology Absorption: Your Company has now evolved into a globally dispersed media engine which revolves around use of most advanced technologies. The developments during the last year have completely transformed the media architecture which now revolves around the use of cloud-based interfaces and use of remote access to manage content, channels and delivery networks. The architecture now uses massively redundant storage and access architectures to make the entire operations highly resilient and assure continuity of services, customer interaction and revenues. A major addition to the Man Machine Interface has been to add analytics and customer interfaces to the media machine, assuring deliveries of curated customer preferred content based on well proven models. The new technology model has been well validated during the continuing COVID-19 crisis with serious impairments in physical access as well as constraining of content inputs without affecting the deliverables globally. Your organization achieved end to end digital transformation and automation of content supply chain and operations which empowered linear and digital platform business continuity and access to entertaining content by consumers during lockdown. Your organization adopted next generation modern cloud based creative collaboration, editing, content review solutions to create entertaining content remotely.

Foreign Exchange Earnings & Outgo: During the financial year 2020-21, the Company had Foreign Exchange earnings of ? 4,828 million and outgo of ? 1,584 million.

17. DISCLOSURES

i. Particulars of loans, guarantees and investments: Particulars of loans, guarantees and investments made by the Company as required under Section 186 (4) of the Act and the Listing Regulations are contained in Note No. 38 to the Standalone Financial Statements.

ii. Transactions with Related Parties: All contracts/arrangements/ transactions entered by the Company during the financial year with related parties were on an arm’s length basis, in the ordinary course of business and in compliance with the applicable provisions of the Act, Listing Regulations and Policy on dealing with and materiality of Related Party Transactions. During FY 2020-21, there were no material Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other Designated Persons which may have a potential conflict with the interest of the Company at large.

All related party transactions, specifying the nature, value, terms and conditions of the transactions including the arms-length justification, were placed before the Audit Committee for its approval and statement of all related party transactions carried out was placed before the Audit Committee for its review on a quarterly basis. During the year under review, there have been no material related party transactions entered into by the Company as defined under Section 188 of the Act and Regulations 23 of the Listing Regulations and accordingly, no transactions are required to be reported in Form AOC-2 as per Section 188 of the Act.

iii. Risk Management: Your Company has well-defined operational processes to ensure that risks are identified and the operating management is responsible for identifying and implementing the mitigation plans for operational and process risks. Key strategic and business risks are identified and managed by senior management team with active participation of the Risk Management Committee. The risks that matter and their mitigation plans are updated and reviewed periodically by the Risk Management Committee of your Board and integrated in the Business plan for each year. The details of constitution, scope and meetings of the Risk Management Committee forms part of the Corporate Governance Report. In the opinion of the Board, currently, there are no risks that may threaten existence

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iv. Vigil Mechanism: The Company has a Whistle Blower Policy and has established the necessary vigil mechanism for directors and employees, in confirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations, to report concerns about unethical behavior. The details of the policy have been disclosed in the Corporate Governance Report, which form part of this Annual Report and is also available on website of the company at www.zee.com.

v. Internal Financial Controls and their adequacy: Your Company has adequate internal financial controls and processes for orderly and efficient conduct of the business including safeguarding of assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically and at the end of each financial year and provides guidance for strengthening of such controls wherever necessary. As part of Enterprise Risk Assessment and Internal Control evaluation, with a view to enhance related effectiveness of control, your Company has confirmed that its systems and processes for film acquisition are operating effectively. During the year under review, no fraud has been reported by the Auditors to the Audit Committee or the Board.

vi. Compliance with Secretarial Standards: Your Company has complied with the applicable Secretarial Standards, issued by the Institute of Company Secretaries of India, relating to Board Meetings and General Meetings.

vii. Deposits & Unclaimed Dividend/Shares: Your Company has not accepted any public deposit under Chapter V of the Act.

During the year under review, in terms of the applicable provisions of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time (‘IEPF Rules’), unclaimed dividend declared by the Company for financial year 2012-13 aggregating to ? 2.49 million was transferred to Investors Education and Protection Fund.

Further, during the year under review, in compliance with the requirements of IEPF Rules, your Company had transferred 108,778 Unclaimed Equity Shares of ? 1 each to the beneficiary account of IEPF Authority.

The said Unclaimed Dividend and/or Unclaimed Equity Shares can be claimed by the Shareholders from IEPF authority after following process prescribed in IEPF Rules. During FY 2020-21, an aggregate of 3,499 Unclaimed Equity Shares of the Company were re-transferred by the IEPF Authority to the beneficiary accounts of respective Claimants, upon specific refund claims and completion of verification process by the Company and IEPF Authority.

viii. Annual Return: Pursuant to the amended provisions of Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, Annual Return in Form MGT-7 is available on website of the Company at www.zee.com.

ix. Sexual Harassment: Your Company is committed to provide safe and conducive working environment to all its employees (permanent, contractual, temporary and trainees etc.) and has zero tolerance for sexual harassment at workplace. In line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder, your Company has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace and has constituted Internal Complaints Committee across various locations to redress complaints received regarding sexual harassment.

During the year under review, one complaint was received by the Company and was investigated in accordance with the procedure and resolved.

Hence, no complaint is pending at the end of financial year 2020-21.

x. Regulatory Orders: No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and operations of the Company in future.

xi. Managing Director of the Company doesn’t receive any remuneration or commission from any of its subsidiaries.

18. RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, in relation to the Annual Accounts for the

financial year 2020-21, your Directors confirm that:

(a) The Annual Accounts of the Company have been prepared on a going concern basis;

(b) In the preparation of the Annual Accounts, the applicable accounting standards had been followed and there is no material departures;

(c) The accounting policies selected were applied consistently and the judgments and estimates related to these annual accounts have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as on March 31, 2021, and, of the profits of the Company for the financial year ended on that date;

(d) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, to safeguard the assets of the Company and to prevent and detect any fraud and other irregularities;

(e) Requisite internal financial controls to be followed by the Company were laid down and that such internal financial controls are adequate and operating effectively; and

(f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

19. ACKNOWLEDGEMENTS

Employees are vital and most valuable assets of your Company. Your Directors value the professionalism and commitment of all employees of the Company and place on record their appreciation of the contribution and efforts made by all the employees in ensuring excellent all-round performance. Your Board also thank and express their gratitude for the support and co-operation received from all stakeholders including viewers, producers, customers, vendors, advertising agencies, investors, bankers and regulatory authorities.

For and on behalf of the Board Punit Goenka

Managing Director & CEO

Vivek Mehra

Director

Place: Mumbai Date: May 20, 2021

Director’s Report