Your Directors are pleased to present the Thirty Fourth Annual Report and AuditedFinancial Statements of the Company for the financial year ended March 31 2019.
The financial highlights for the year ended March 31 2019 are given below:
(Rs. in Crore)
|Particulars ||Standalone ||Consolidated |
| ||for the year ended ||for the year ended |
| ||March 31 ||March 31 ||March 31 ||March 31 |
| ||2019 ||2018 ||2019 ||2018 |
|Total Income ||3883.22 ||3002.10 ||4009.65 ||3105.29 |
|Total Expenditure ||1747.28 ||1343.70 ||1840.32 ||1410.33 |
|Profit before share of profit from || || || || |
|Joint Ventures and tax ||2135.94 ||1658.40 ||2169.33 ||1694.96 |
|Share of profit from joint ventures ||- ||- ||15.41 ||22.98 |
|Profit before tax ||2135.94 ||1658.40 ||2184.74 ||1717.94 |
|Income tax expense ||741.08 ||565.36 ||751.06 ||582.42 |
|Profit for the year ||1394.86 ||1093.04 ||1433.68 ||1135.52 |
|Profit for the year attributable to: || || || || |
|- Owners of the Company ||- ||- ||1433.27 ||1135.12 |
|- Non-Controlling Interest ||- ||- ||0.41 ||0.40 |
|Other Comprehensive Income for the year || || || || |
|Net other comprehensive income not to be reclassified to profit or loss in subsequent periods ||(0.54) ||(0.40) ||(1.31) ||(0.87) |
|Other Comprehensive Income for the year attributable to: || || || || |
|- Owners of the Company ||- ||- ||(1.29) ||(0.86) |
|- Non-Controlling Interest ||- ||- ||(0.02) ||(0.01) |
|Total comprehensive income for the year ||1394.32 ||1092.64 ||1432.37 ||1134.65 |
|Total Comprehensive Income for the year attributable to: || || || || |
|- Owners of the Company ||- ||- ||1431.96 ||1134.25 |
|- Non-Controlling Interest ||- ||- ||0.41 ||0.40 |
|Total comprehensive income for the year ||1394.32 ||1092.64 ||1432.37 ||1134.65 |
|Retained Earnings at the beginning of the year ||3487.41 ||2869.09 ||3535.73 ||2875.80 |
|Interim Dividend ||492.61 ||394.09 ||492.61 ||394.09 |
|Tax on Interim Dividend ||101.26 ||80.23 ||101.26 ||80.23 |
|Retained Earnings at the end of the year ||4287.86 ||3487.41 ||4373.83 ||3535.73 |
|Earnings Per Share (Face Value Rs. 5/-) ||35.39 ||27.74 ||36.38 ||28.81 |
SUMMARY OF OPERATIONS
The Total Income for the year ended March 31 2019 was Rs. 3883.22 crore as againstRs. 3002.10 crore during the previous year ended March 31 2018. Profit Before Tax wasRs. 2135.94 crore as against Rs. 1658.40 crore in the previous year. Profit After Taxwas Rs. 1394.86 crore as against Rs. 1093.04 crore in the previous year.
Your Company one of the largest Television Broadcasters in India operating SatelliteTelevision Channels across four languages of Tamil Telugu Kannada and Malayalam and alsoairing FM Radio Stations across India continues to have sustained and increased viewershipof its channels with Sun TV being the most watched channel in India.
Your Company commenced the transmission of new Bengali general entertainment channelSUN Bangla on February 3 2019. With 3.5 hours of programming per day SUN Bangla will beavailable as a free to air channel initially.
M/s. Kal Radio Limited subsidiary of your Company had launched 6 more FM RadioStations in Second Batch of Private FM Radio Phase III Channels catering to southerncities of India and 5 More FM Radio Stations was launched in Second Batch of Private FMRadio Phase III Channels by your Company's subsidiary M/s. South Asia FM Limited cateringto Northern Eastern & Western parts of India.
In accordance with the Dividend Distribution Policy adopted by the Board and availableon the website of the Company the Board of Directors during the financial year endedMarch 31 2019 have declared an interim dividend of Rs. 5.00 per share (100%) at theirBoard meeting held on August 10 2018 and Rs. 2.50 per share (50%) each at their Boardmeetings held on November 2 2018 February 8 2019 and March 8 2019 respectivelyresulting in a total dividend of 250% i.e. Rs. 12.50 per equity share of face value ofRs. 5.00 each for the financial year ended March 31 2019. (Prev. Year - 200% i.e. Rs.10.00 per equity share of face value of Rs. 5.00 each) and have not recommended any FinalDividend. The Payout ratio currently stands at 42.58% of current year profit after taxes.
TRANSFER TO RESERVES
During the financial year 2018 - 19 no amount has been transferred to the GeneralReserve.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 of the Companies Act 2013 your Directors to the best of theirknowledge and belief confirm that:
| In the preparation of the Statement of Profit & Loss for the financial year ended March 31 2019 and Balance Sheet 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 them 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; |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with Section 135 of the Companies Act 2013 the Company has constituteda Corporate Social Responsibility Committee. The CSR Committee of the Company has approveda CSR policy. The Annual report on CSR activities as required under Companies (CorporateSocial Responsibility Policy) Rules 2014 has been appended in Annexure I to this Report.Further details relating to the Corporate Social Responsibility Committee are provided inthe Corporate Governance Report which forms part of this report.
Your Company has two subsidiaries viz. M/s. Kal Radio Limited and M/s. South Asia FMLimited (SAFM). SAFM is a subsidiary which has been classified as Joint Venture (JV) asper Ind-AS in financial statements of the Company and accounted as per applicable Ind-ASaccounting standard framework. There has been no material change in the nature of businessof the subsidiaries. Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary companies may write to the Company Secretary. In terms ofproviso to sub section (3) of Section 129 of the Act the salient features of thefinancial statement of the subsidiaries is set out in the prescribed Form AOC-1 asAnnexure II which forms part of the annual report.
TRANSACTIONS WITH RELATED PARTIES
The information on material transactions with related parties pursuant to Section134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 in FormAOC-2 is annexed to this report as Annexure III.
AUDITORS AND SECRETARIAL AUDITORS
At the 32 Annual General Meeting (AGM) held on September 22 2017 the shareholders hadapproved the appointment of M/s. Deloitte Haskins & Sells LLP Chartered Accountants(ICAI Firm Registration No: 117366W/W-100018) as the Statutory Auditors of the Companyfor a term of five years i.e. till the conclusion of 37 AGM to be held in the year 2022.Pursuant to the amendment of Section 139 of the Companies Act 2013 the requirement ofseeking ratification for continuance of the Statutory Auditors at every AGM is no longerrequired and accordingly the Notice of ensuing AGM does not include the proposal ofseeking shareholder's ratification for continuance of Statutory Auditors.
As per the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mrs. Lakshmmi Subramanian Senior Partner of M/s. Lakshmmi Subramanian &Associates a firm of Company Secretaries in Practice to undertake the Secretarial Auditof the Company. The Secretarial Audit Report for the financial year under review isannexed herewith as Annexure IV.
The unmodified / unqualified report of Statutory Auditors and Secretarial Auditorsforms part of this report.
In pursuance of Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 M/s. S. Sundar & Associates Cost Accountants wasengaged to carry out Audit of Cost Records of the Company for the financial year 2018 -19. Requisite proposal seeking ratification of remuneration payable to the Cost Auditorforms part of the notice of ensuing Annual General Meeting.
MATERIAL SUBSIDIARY COMPANY
As per Regulation 16 of the Listing Regulations your Company has no materialsubsidiary company whose turnover or net worth exceeds 10% of the consolidated turnoveror net worth respectively of your Company and its subsidiaries in the immediatelypreceding 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. 437120 beingunclaimed dividend pertaining to the financial year 2010-11 had been transferred duringthe year to the Investor Education and Protection Fund established by the CentralGovernment.
None of the Company's directors are disqualified from being appointed as a director asspecified in Section 164 (2) of the Companies Act 2013.
RETIREMENT BY ROTATION
As per the provisions of the Companies Act 2013 Mr. K. Vijaykumar Director of theCompany will retire at the ensuing AGM and being eligible seeks re-appointment. The Boardof Directors recommend his re-appointment.
The information on the particulars of director eligible for re-appointment in terms ofRegulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 has been provided in the notice convening the Annual General Meeting.
CHANGES IN BOARD OF DIRECTORS
The Company through postal ballot dated April 26 2019 made the following changes inthe Board of Directors:
|1. Mr. R. Mahesh Kumar was appointed as a Director and Managing Director of the Company and Ms. Kaviya Kalanithi Maran was appointed as a Director and an Executive Director both with effect from April 1 2019. |
|2. Mr. K. Vijaykumar who resigned as Managing Director and Chief Executive Officer with effect from March 31 2019 and continues on the Board as an Executive Director with effect from April 1 2019. |
|3. Mr. Sridhar Venkatesh and Mr. Desmond Hemanth Theodore were appointed as Independent Directors of the Company with effect from April 1 2019. |
|4. The Independent Directors Mr. J. Ravindran Mr. Nicholas Martin Paul Mr. M.K. Harinarayanan and Mr. R. Ravivenkatesh whose first term of office expires on September 25 2019 have been appointed for a second term of five consecutive years on the Board of the Company with effect from September 26 2019. |
KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are Mr. R. Mahesh Kumar Managing Director Mr. V.C.Unnikrishnan Chief Financial Officer and Mr. R. Ravi Company Secretary.
There has been no change in the Key Managerial Personnel except appointment of Mr. R.Mahesh Kumar as Managing Director in place of Mr. K. Vijayakumar presently an ExecutiveDirector.
CHANGES IN CAPITAL STRUCTURE MEMORANDUM AND ARTICLES OF ASSOCIATION:
There is no change in the Capital Structure Memorandum and Articles of Associationduring the financial year under review.
The Company through Postal Ballot dated April 26 2019 increased its Authorised Capitalto Rs. 600 Crore (Rupees Six Hundred Crore Only) from Rs. 225 Crore (Rupees Two Hundredand Twenty Five Crore Only) the Memorandum and Articles of Association have also beenamended to be in line with the Companies Act 2013.
CORPORATE GOVERNANCE REPORT MANAGEMENT DISCUSSION & ANALYSIS REPORT AND OTHERINFORMATION REQUIRED UNDER THE COMPANIES ACT 2013 AND SEBI (LISTING OBLIGATIONS ANDDISCLOSURE REQUIREMENTS) REGULATIONS 2015
As required under Regulation 34 and Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter referred to as "ListingRegulations") with the Stock exchanges we continue to be a pioneer in benchmarkingour corporate governance policies with the best in the media industry. The report onManagement Discussion and Analysis Corporate Governance as well as the Auditor'scertificate regarding compliance of conditions of Corporate Governance forms part of theAnnual Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective is attached as part of the Annual Report and the said report willalso be available on the website of the Company.
PARTICULARS OF EMPLOYEES
Sun TV Network Limited had 1476 employees as of March 31 2019 (previously 1682). Inaccordance with the provisions of Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the required information is provided in the Annual Report which forms part of this Report.However as per the provisions of Section 136 of the Companies Act 2013 the AnnualReport is being sent to all the Shareholders of the Company excluding the aforesaidinformation. The said information is available for inspection at the registered office ofthe Company during working hours .
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant or material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There were no material changes and commitments affecting the financial position of theCompany occurred between the end of financial year to which this financial statementsrelate to and the date of this Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under Section 92(3) of the Companies Act 2013will be available on the website of the Company www.suntv.in.
NUMBER OF MEETINGS OF THE BOARD
During the financial year Six Board Meetings were held. The details of meetings arefurnished in the Corporate Governance Report. The intervening gap between the Meetings didnot exceed one hundred and twenty days.
INDEPENDENT DIRECTORS' DECLARATION
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of the Listing Regulations.
POLICY OF DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided in Section 178(3) of the Companies Act 2013 is available at theCompany's website www.suntv.in. Further information about elements of remunerationpackage of individual directors are provided in the extract of Annual Return Form MGT - 9.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENT
The Company has not given any loans or provided any guarantees and details ofInvestments covered under the provisions of Section 186 of the Companies Act 2013 aregiven in the notes to the Financial Statements (Note No. 6 & 9).
The information about internal control is set out in the Management Discussion &Analysis Report which is attached and forms part of report.
Your Company has not accepted any Deposits from the public in terms of Section 73 ofthe Companies Act 2013 during the financial year under review.
As per the provisions of Section 134 of the Companies Act 2013 and Regulation 21 ofthe Listing Regulations the Board has constituted a Risk Management Committee comprisingof Independent Directors. The Risk Management is overseen by the Risk Management Committeeof the Company on a continuous basis. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuous basis.For details please refer to the Management Discussion and Analysis report which form partof the Board's Report.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has practice of conducting structured induction and familiarizationprogramme of the independent directors as detailed in the Corporate Governance Reportwhich forms part of the Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
As per Section 177(10) of the Companies Act 2013 and Regulation 22 of the ListingRegulations the Company has a vigil mechanism to deal with instance of fraud andmismanagement if any. The details of policy are explained in the Corporate GovernanceReport. Policy on Vigil Mechanism is hosted on the website.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The financial position of each of the subsidiaries is provided in a separate statementAOC - 1 attached to the Financial Statement pursuant to first proviso of Section 129(3)of the Companies Act 2013 as Annexure II.
INDEPENDENT DIRECTORS' MEETING
As per Regulation 25 of the Listing Regulations a separate meeting of IndependentDirectors was held during the financial year. The detailed information is given in theCorporate Governance Report.
In terms of applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out a formal annual evaluation of its own performancethe directors individually as well as the functioning of its committees. A detailedexplanation has been given in the Corporate Governance Report.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted anAnti-Sexual Harassment policy in line with the provisions of the Sexual Harassment ofWomen at workplace (Prevention Prohibition and Redressal) Act 2013 and the Rulesthereunder. During the year under review no complaints on sexual harassment were received.The Company has constituted Internal Complaints Committee with four members to considerand resolve sexual harassment complaints. The Committee met once in the financial yearended March 31 2019.
INFORMATION AS REQUIRED UNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013 READ WITHRULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES 2014
(A) CONSERVATION OF ENERGY
The Company is engaged in Satellite Television Broadcasting operations and theinformation 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 itsprograms. The outdated technologies are constantly identified and updated with latestinnovations.
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
(Rs. in Crore)
|PARTICULARS ||March 31 2019 ||March 31 2018 |
|Foreign Exchange Earnings ||216.95 ||171.18 |
|Foreign Exchange Outgo ||74.18 ||70.50 |
CONSOLIDATED FINANCIAL STATEMENTS
As required by Indian Accounting Standard Ind AS 110 and Ind AS 27 on ConsolidatedFinancial Statements issued by The Institute of Chartered Accountants of India theAudited Consolidated Financial Statements of the Company are attached. The AuditedConsolidated Financial Statements also account for the non-controlling interest of yourCompany's subsidiary.
The Managing Director and the Chief Financial Officer have submitted a certificate tothe Board regarding the financial statements and other matters as required underRegulation 17(8) of the Listing Regulations and the Managing Director has confirmed theCode of Conduct as envisaged in Listing Regulations. In terms of Regulation 34 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 an Independentprofessional has given a Certificate on Corporate Governance Compliance and a Certificatestating that none of the Directors are disqualified which forms part of the report.
APPRECIATION AND ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep appreciation of thededication hard work solidarity co-operation support and commitment of employees atall levels in maintaining the sustained growth of your Company and remain in the forefrontof media and entertainment business.
Your Directors thank and express their gratitude for the support and co-operationreceived from the Central Government mainly the Ministry of Information and Broadcastingand the Department of Telecommunication and State Governments and other stakeholdersincluding viewers producers vendors banks investors service providers as well asregulatory and governmental authorities and stock exchanges for their continued support.
| ||On behalf of the Board |
|Place : Chennai ||Kalanithi Maran |
|Date : May 23 2019 ||Chairman |