TO THE MEMBERS
Your Directors are pleased to present the Thirty Seventh Annual Report of yourCompany's business and operations along with the Audited Financial Statements(Annual Accounts') for the financial year ended March 31 2019.
1. RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 (the Act') in relation to theAnnual Accounts for the Financial Year 2018-19 your Directors confirm that: a) The AnnualAccounts of the Company have been prepared on a going concern basis; b) In the preparationof the Annual Accounts the applicable accounting standards had been followed and thereare no material departures;
c) The accounting policies selected were applied consistently and the judgments andestimates related to these annual accounts have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2019 andprofitsof the Company the for the year ended on that date;
d) Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 to safeguard theassets 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 downand that such internal financial controls are adequate and operating effectively. Howeverin the wake of aggressive digital expansion strategy by the Company certain internalfinancial controls were required to be enhanced in respect of acquisition of Films whichhave since been strengthened; and
f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are . effectively operating
2. FINANCIAL RESULTS
The Financial Performance of your Company for the year ended March 31 2019 issummarized below: ( Rs. MILLIONS)
|Particulars ||Standalone Year Ended ||Consolidated Year Ended |
| ||31.03.2019 ||31.03.2018 ||31.03.2019 ||31.03.2018 |
|Revenue from Operations ||68579 ||57956 ||79339 ||66857 |
|Other Income ||1894 ||9818 ||2515 ||4403 |
|Total Income ||70473 ||67774 ||81854 ||71260 |
|Total Expenses ||44299 ||40463 ||57315 ||49431 |
|Share of Associates / Joint Ventures ||- ||- ||24 ||12 |
|Exceptional Items ||(218) ||- ||(218) ||1346 |
|Profit Before Tax ||25956 ||27311 ||24345 ||23187 |
|Provision for Taxation (net) ||9406 ||8192 ||8673 ||8409 |
|Profit after Tax ||16550 ||19119 ||15672 ||14778 |
There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which affect the financial position ofthe Company. Based on the internal financial control framework and compliance systemsestablished in the Company the work performed by Statutory
Internal Secretarial Auditors and reviews performed by the management and/or the AuditCommittee of the Board your Board is of the opinion that the Company's internal financialcontrols were adequate and working effectively during the Financial Year 2018-19.
In accordance with the Dividend Distribution Policy adopted by your Board and availableon the website of the Company www.zeeentertainment.com your Directors recommend paymentof Equity Dividend of Rs. 3.50 per equity share of Rs. 1/- each and such Equity Dividendupon declaration by the Members of the Company at the ensuing Annual General Meetingshall be payable on the outstanding Equity Share Capital of the Company as at the RecordDate of July 16 2019. The outflow on account of equity dividend and the tax on suchdividend distribution based on current Paid-up Equity Share Capital of the Company wouldaggregate to Rs. 4053 million resulting in payout of 25.50% of the Consolidated NetProfits for the Financial year 2018-19.
In accordance with the terms of Listed 6% Cumulative Redeemable Non-ConvertiblePreference Shares issued as Bonus in 2014 (Bonus Preference Shares) and Unlisted Series B 6% Cumulative Redeemable Non-Convertible Preference Shares issued in accordancewith the Scheme (Unlisted Series B Preference Shares) the Company had remitted anaggregate Preference Dividend of Rs. 953.19 Million comprising of:
Pro-rata Preference Dividend of Rs. 0.11145 on the redemption value of Rs. 2 perBonus Preference Share for the period from April 1 2018 till the Redemption date of March5 2019;
Preference Dividend of Rs. 0.36 per share for FY 2018-19 on the Bonus PreferenceShares of Rs. 6 per share post redemption; and
Pro-rata Preference Dividend of Rs. 0.5819 per share on the Unlisted Series BPreference Shares of Rs. 10 each for the period from April 1 2018 until redemptiondate of March 20 2019.
4. BUSINESS OVERVIEW
During the fiscal 2019 your Company delivered another year of strong operatingperformance. All the business verticals exhibited robust performance and strengthenedtheir competitive positions. Continued viewership gains in the domestic broadcast businessalong with the strong demand across key categories for TV advertising aided advertisingrevenue growth. Advertising also got a fillip from ZEE5 as the platform began monetizingits fast-growing user base. On the subscription front your Company gained from themonetization of the recently digitized Phase-III & IV subscribers. The long-awaitedTRAI order was finally implemented during the last quarter of the year which led tonear-term disruptions for both subscription and advertising revenues. However yourCompany believes that this regulation will go a long way in empowering the consumers andimproving the transparency in the distribution value chain and will benefit companies withstrong content creating capabilities like yours in the medium term. ZEE5 the Company'sOTT offering launched in February 2018 was the fastest growing digital platforms in thecountry and offered the Indian consumers one of the widest bouquets of option forentertainment on demand. During the year your Company had a fair share of successes inits movie production business and one of the movies featured in the top-10 list of moviesreleased in FY19 in terms of net box office collections.
As per FICCI-EY report the Indian Media and Entertainment (M&E) industryregistered a growth of 13.4% in Calendar Year 18 reaching Rs. 1674 billion in size andis forecasted to register 12% CAGR over the next three years with all segments of M&Eindustry expected to register growth over this period.
During the year under review:
ZEE5 your Company's OTT offering reached 61.5 million monthly activeusers in the month of March 2019. It was the fastest growing digital entertainmentplatform and became the #2 platform in the country in its category. ZEE5 released 50+original series and movies till March 2019 across six languages making it the largestproducer of original content in the digital space. The platform has entered intopartnerships with key players across the digital eco-system to make its content availableto a wider audience;
In the Domestic Broadcast Business your company further strengthened its#1 position in the non-sports entertainment segment with an all-India viewership share of19.7%. This was led by market share gains in the regional channel portfolio and Hindimovie cluster;
In the Hindi General Entertainment segment Zee TV maintained itsposition as the number one Hindi GEC channel while maintaining its lead in the weekdayprime time. Zee Anmol was the leader during the year. However from March 1 2019 yourCompany has withdrawn Zee Anmol and Zee Anmol Cinema from DD Freedish platform which hasaffected the reach and viewership of these channels;
In the Hindi movie segment your Company's portfolio further strengthenedits #1 position driven by the strong movie catalogue;
In the Regional markets Zee Marathi and Zee Sarthak maintained itsleadership position. Zee Kannada and Zee Bangla gained market share and became the #1channels in their respective markets. Zee Tamil continued to gain viewership share led bytraction in its weekday fiction content. With launch of Zee Keralam in November 2018 yourcompany now has GEC channels in all the Southern markets and the biggest languagefootprint in the country;
In the English segment to strengthen the &' brand as a premiumproposition Zee Studios was rebranded as &flix;
In the International Business your Company continued to expand the reachof its channels across geographies with new distribution partnerships. Further yourCompany has launched its digital platform ZEE5 in international markets during the year.ZEE5 has already announced tie-ups tariff with multiple telecom partners across APACcountries to expand its reach;
Zee Studios the movie production and distribution business released 7(seven) movies during the year in two languages - Hindi and Marathi. Your company alsodistributed 6 (six) movies in India across three languages. Zee Music Company continued toexpand its music catalogue across languages and maintained its position as the #2 musicchannel by subscribers on YouTube; and
Zee Live our live entertainment business launched Arth India's firstmulti-regional culture festival and LF91 a heritage food festival during the year. Boththe events received good response from the audience.
5. CAPITAL STRUCTURE & CHANGES IN SHAREHOLDING
During the year under review your Company had:
Redeemed 20% of Nominal value of Bonus Preference Shares on the 5th anniversaryof its issuance as per the terms of the issue resulting in outflow of Rs. 4033.88 Milliontowards the said redemption at the rate of Rs. 2/- per Preference Share consequent towhich the face value of Preference Share was changed to Rs. 6/- each. As required underSection 55 of the Act an amount equivalent to such Redemption value was credited toCapital Redemption Reserve Account of the Company. Further pursuant to the provisions ofIncome Tax Act 1961 the said redemption amount was treated as Dividend pay-out andaccordingly was subjected to payment of Dividend Distribution Tax by the Company;
Prematurely redeemed 3949105 Unlisted Series B Preference Shares of Rs.10/- each at par resulting in an outflow of Rs. 39.49 Million and the amount equivalent tosuch Redemption value was credited to Capital Redemption Reserve Account of the Company;and
Issued and allotted 12880 Equity Shares of Rs. 1 each upon exercise of stockoptions granted under Company's ESOP Scheme.
Consequent to the above redemption/issuance of securities the Paid-up Share Capital ofthe Company as at March 31 2019 stood at Rs. 13062120372/- comprising of960466500 Equity shares of Rs. 1/- each and 2016942312 Bonus Preference Shares of Rs.6/- each. Subsequent to closure of the financial year your Company had issued andallotted 15265 Equity Shares upon exercise of stock options granted under the ESOPScheme.
In November 2018 your Company's Promoters had issued a Press release conveying theirintent to sell/divest up to 50% of their stake in the Company to a strategic partner toenable pursuing disruptive technological development and transform your Company in to atech-media Company. While the process of identifying strategic partner by the Promoters ison the Promoters had in the interim sold 3.42% equity stake resulting in reduction ofPromoters shareholding in the Company from 41.62% to 38.20% as at March 31 2019. As onthe date of this report consequent to further sale of shares held by Promoters afterclosure of the financial year the Promoters hold 36.70% stake in the Company.
6. CREDIT RATING
During the year under review Brickwork Ratings India Private Ltd had reaffirmed therating assigned to the Company as the issuer of the Bonus Preference Shares listed at theStock Exchanges at BWR AAA' which denotes that the instruments with this rating areconsidered as having highest degree of safety regarding timely servicing of financialobligations. In November 2018 consequent to the stake sale announcement by the Promotersretaining the BWR AAA' the rating outlook was revised by Brickwork fromStable' to Credit watch with developing implications'.
7. SUBSIDIARIES & JOINT VENTURES
As at March 31 2019 your Company had 29 (twenty nine) Subsidiaries comprising of 8(eight) domestic subsidiaries and 21 (twenty one) overseas direct and step-downSubsidiaries and one Associate and Joint Venture Company each.
During the year under review:
- Your Company sold 16.92% Equity stake in Aplab Ltd an Associate entity by way of anoff-market inter se transfer thereby reducing your Company's stake from 26.42% to9.50% consequent to which Aplab Ltd ceased to be an Associate of your Company as at March31 2019. Based on your
Company's request Aplab Ltd has initiated the process for re-classification of yourCompany's holding from Promoter / Promoter Group Category to Public category as perRegulation 31A of SEBI Listing Regulations;
- In terms of the Share Purchase Agreement executed by the Company for acquiringbalance 26% equity stake in Zee Turner Limited (a 74% subsidiary) held by TurnerInternational Pvt Ltd the said subsidiary changed its name from Zee Turner Limited toZee Network Distribution Limited w.e.f December 24 2018; and
- Fly-by-Wire International Pvt Ltd a wholly owned subsidiary shifted its registeredoffice from the State of Karnataka to State of Maharashtra for operational convenience.
Apart from the above there was no change in number of Subsidiary/Associate/ JointVenture of the Company either by way of acquisition or divestment or otherwise during theyear under review.
In line with amendments of threshold for determining Material Subsidiary as stated inRegulation 16(1)(c) of SEBI Listing regulations effective April 1 2019
ATL Media Limited Mauritius one of the overseas wholly owned subsidiaries qualifiedto be a Material Subsidiary of your Company.
In compliance with Section 129 of the Act a statement containing requisite detailsincluding financial highlights of the operation of all subsidiaries/ associate/jointventure in Form AOC-1 is annexed to this report as Annexure A.
In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements including the Consolidated Financial Statements and related information of theCompany and Audited Accounts of each of subsidiary(ies) are available on the website ofthe Company www.zeeentertainment.com These documents will also be available for inspectionduring business hours on all working days (except Saturday) at the Registered Office ofthe Company.
8. EMPLOYEE STOCK OPTION SCHEME
An aggregate of 23800 Stock Options issued by the Company in pursuance of ZEEL ESOPScheme 2009 to Mr Punit Misra CEO Domestic Broadcast Business were outstanding asat March 31 2018. During FY 2019 17300 Stock Options were further granted to Mr PunitMisra and the said Options granted shall vest with him in 3 tranches and shall beconvertible into equivalent number of Equity shares in accordance with the terms of issueupon payment of Exercise Price of Rs. 1/- per share by the Option Grantee. Upon exerciseof vested Stock options by Mr Punit Misra 12880 Equity Shares were issued and allottedto him during FY 18-19 and 28220 unvested Stock Options were outstanding as at March 312019.
Requisite disclosures as required under Regulation 14 of Securities Exchange
Board of India (Share Based Employee Benefits) Regulations 2014 is annexed to thisreport 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 SEBI Regulationsand the resolution passed by the shareholders. The said disclosure on Company's ESOPScheme will also be available on the Company's website www.zeeentertainment.com as part ofthe Annual Report.
Subsequent to closure of the financial year the Nomination and Remuneration
Committee approved grant of 24700 additional Stock Options to Mr Punit Misra onsimilar terms and had issued and allotted 15265 Equity Shares to Mr Punit Misra uponexercise of options vested in April 2019.
9. CORPORATE SOCIAL RESPONSIBLITY
Corporate Social Responsibility (CSR) at Zee is all about engaging in long-termsustainable programs that actively contribute to and support the social and economicdevelopment of the society. Accordingly as an unified approach towards CSR at Essel Grouplevel and with an intent to support long term projects focused on developing andempowering society your Company had along with other Essel group entities established aSection 8 Company in the name of Subhash Chandra Foundation. The CSR contributions of theEssel group companies are pooled into the Foundation to fund long-term projects.
During the year under review out of total CSR budget of Rs. 621.78 Million (includingunutilized CSR amount of Rs. 224.65 Million carried forward from last year) the Companyhad contributed an aggregate of Rs. 226.97 Million towards various CSR Projects detailedin the Annual Report on CSR annexed to this report. Aforesaid contributions includeremittance of Rs. 222 Million towards long term CSR Projects committed during FY 18. As atMarch 31 2019 an amount of Rs. 394.81 Million remained unutilized from out of CSR budgetdue to non-availability of suitable CSR Projects. The unutilized CSR funds have beencarried forward for funding suitable CSR projects in future.
Annual report on Corporate Social Responsibility activities initiated by the Companyduring the year under review in compliance with the requirements of Companies Act 2013is annexed to this report as Annexure C.
10. CORPORATE GOVERNANCE AND POLICIES
In order to maximize shareholder value on a sustained basis your Company has beenconstantly reassessing and benchmarking itself with well-established Corporate Governancepractices besides strictly complying with the requirements of SEBI Listing Regulationsapplicable provisions of Companies Act 2013 and applicable Secretarial Standards issuedby the Institute of Company Secretaries of India.
In terms of Schedule V of SEBI Listing Regulations a detailed report on CorporateGovernance along with Compliance Certificate
Statutory Auditors of the Company is attached and forms an integral part of thisReport. Management Discussion and Analysis Report and Business Responsibility Report asper SEBI Listing Regulations are presented in separate sections forming part of thisAnnual Report. The said Business Responsibility Report will also be available on theCompany's website www.zeeentertainment. com as part of the Annual Report.
In compliance with the requirements of Companies Act 2013 and the Listing Regulationsyour Board had approved various Policies including Code of Conduct for Directors &Senior Management Material Subsidiary Policy Insider Trading Code Document PreservationPolicy Material Event Determination and Disclosure Policy Fair Disclosure PolicyCorporate Social Responsibility Policy Whistle Blower and Vigil Mechanism Policy RelatedParty Transaction Policy Remuneration Policy and Dividend Distribution Policy. Thesepolicies & codes along with the Directors Familiarization Program and Terms andConditions for appointment of Independent Directors have been uploaded on Company'scorporate website & can be viewed on https://www.zeeentertainment.com/investors/investor-governance. In line with the amendments to SEBI (Prohibition of InsiderTrading) Regulations 2015 your Company's Insider Trading Code and the Policy on FairDisclosure of Unpublished Price Sensitive Information were revised with effect from April1 2019.
In compliance with the requirements of Section 178 of the Companies Act 2013 theNomination & Remuneration Committee of your Board had fixed various criteria fornominating a person on the Board which inter alia include the requirement ofdesired size and composition of the Board age limits qualification / experience areasof expertise and independence of individual.
The Committee had also approved in-principle that the initial term of an IndependentDirector shall not exceed 3 years.
11. DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year there has been no change in the constitution of your Board whichcontinues to comprise of 8 (eight) Directors including 4 (four) Independent Directors 1(one) Executive Director and 3 (three) Non-Executive Directors. Independent Directorsprovide their declarations both at the time of appointment and annually confirming thatthey meet the criteria of independence as prescribed under Companies Act 2013 and ListingRegulations.
During FY 2018-19 your Board met 7 (seven) times details of the date of meeting andattendance of Directors at such meetings are available in Corporate Governance Reportannexed to this report.
Dr Subhash Chandra Non-Executive Director is liable to retire by rotation at theensuing Annual General Meeting and being eligible has offered himself for reappointment.Your Board recommends his re-appointment.
During the year under review Mr Bharat Kedia resigned as Chief Financial Officer witheffect from April 29 2018 and the resultant vacancy was filled with appointment Mr RohitKumar Gupta as Chief Financial Officer of the Company with effect from September 6 2018.Accordingly the Key Managerial Personnel of the Company as at March 31 2019 comprised ofMr Punit Goenka Managing Director & CEO Mr M Lakshminarayanan Chief ComplianceOfficer & Company Secretary and Mr Rohit Kumar Gupta Chief Financial Officer.
12. PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations theevaluation of annual performance of the Directors / Board / Board Committees was carriedout for the financial year 2018-19. The details of the evaluation issued processbythe are set out in the Corporate Governance Report annexed to this Report.
13. BOARD COMMITTEES
In compliance with the requirements of Companies Act 2013 and Listing Regulations yourBoard had constituted various Board Committees including Audit Committee Risk ManagementCommittee Nomination & Remuneration Committee Stakeholders Relationship Committeeand Corporate Social Responsibility Committee. Details of the constitution of theseCommittees which are in accordance with regulatory requirements have been uploaded onthe website of the Company viz. www.zeeentertainment.com. Details of scope constitutionterms of reference number of meetings held during the year under review along withattendance of Committee Members therein form part of the Corporate Governance Reportannexed to this report.
At the 35th Annual General Meeting held on July 12 2017 the Shareholders had approvedappointment of M/s Deloitte Haskins & Sells LLP Chartered Accountants having FirmRegistration No. 117366W/W-100018 as Statutory Auditors of the Company until conclusion of40th Annual General Meeting to be held in the year 2022 subject to ratification by theShareholders every year.
Pursuant to the amendment to Section 139 of the Companies Act 2013 with effectfromMay 7 2018 the requirement of seeking Shareholders ratification for continuance ofStatutory Auditor at every Annual General Meeting is no longer applicable and accordinglythe Notice of ensuing Annual General Meeting does not include the proposal for seekingShareholders ratification for continuance of Statutory Auditors. The Company has receivedcertificate of eligibility from M/s Deloitte Haskins & Sells LLP in accordance withthe provisions of the Companies Act 2013 read with rules thereunder and a confirmationthat they continue to hold valid Peer Review Certificate SEBI Listing Regulations.
While the Statutory Audit Report of M/s Deloitte Haskins & Sells LLP. CharteredAccountants do not contain any qualification reservation or adverse remarks theStatutory Auditors in their report on standalone and consolidated financial statementshave included an Emphasis of Matter drawing Members attention to Note No 47 and Note No 42to the Notes to Standalone and Consolidated Financial Statements respectively inconnection with advances/deposits given by the Company during the year towards acquisitionof Media content and outstanding as at March 31 2019.
During the year under review the Statutory Auditors had not reported any matter underSection 143(12) of the Act and therefore no detail is required to be disclosed underSection 134(3)(ca) of the Act.
During the year under review the Secretarial Audit of your Company was carried out byM/s Vinod Kothari & Co. Company Secretaries (Firm Registration No. P1996WB042300) incompliance with Section 204 of the Companies Act 2013 and their unqualified SecretarialAudit report forms part of this Report.
Additionally in line with SEBI Circular dated February 8 2019 an Annual SecretarialCompliance Report confirming compliance of all applicable SEBI Regulations Circulars andGuidelines by the Company was issued by the Secretarial Auditor and filed with the StockExchanges.
In compliance with the requirements of Section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 M/s Vaibhav P Joshi & Associates CostAccountants (Firm Registration No. 101329) was engaged to carry out Audit of Cost Recordsof the Company for Financial Year 2018-19. Requisite proposal seeking ratification ofremuneration payable to the Cost Auditor for FY 2018-19 by the Members as per Rule 14 ofCompanies (Audit and Auditors) Rules 2014 forms part of the Notice of ensuingAnnual General Meeting.
15. HUMAN RESOURCES & PARTICULARS OF EMPLOYEES
Your Company being in the business of creativity your Board believes that people arethe ultimate differentiators and efforts are taken to attract develop and retainemployees. In order to ensure sustainable business growth and become values drivencapability strong future ready growth organization your Company over the years has beenfocusing on strengthening its talent management performance management & employeeengagement processes. Employees of your Company are trained to drive values and theybelieve live and demonstrate the 7 core values of the company - namely Customer First Gofor Big Hairy Audacious Goals (BHAG) Be Frugal Respect Humility and Integrity Speed andAgility Solve big Problems and Accountability for Results. During the year your Companyhas moved on to build a high-trust high-performance culture and as a result has beenranked amongst the top 100 India's Best Companies to Work For 2018' as well amongstthe Best Company to work for in the Media Industry in a study conducted by Great Place toWork Institute and The Economic Times. Your company has been institutionalizing thepeople philosophy framework SAMWAD (Effective Conversation) to ensure that aspart of the key objectives people managers deliver on the organization's expectations ofmanaging outcome and developing people by focusing on their talents. Your companycontinues to build the talent pipeline by engaging and hiring fresh talent from renownedcampuses building capabilities in key business functions through training and developmentinitiatives breaking the barriers of communication building a culture of appreciationrecognizing top talent and offering a seamless employee experience by migrating to SAP'sSuccessFactors Human Capital Management (HCM). As on March 31 2019 your Company had 3083employees.
Requisite disclosures in terms of the provisions of Section 197 of the Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014along with statement showing names and other particulars of employees drawing remunerationin excess of the limits prescribed under the said rules is annexed to this report asAnnexure D.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
Your Company is into the business of Broadcasting of General Entertainment TelevisionChannels and extensively uses world class technology in its Broadcast Operations. Howeversince this business does not involve any manufacturing activity most of the Informationrequired to be provided under Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 are Nil / Not applicable. The information asapplicable are given hereunder:
Conservation of Energy
Your Company being a service provider requires minimal energy consumption and everyendeavor is made to ensure optimal use of energy avoid wastages and conserve energy asfar as possible.
Your Company accelerated the use of enabling technologies towards its customerfirst initiatives with special emphasis on quality of content delivery andreliability results of which will be evident in the coming years. Your Company has nowmoved well ahead with seamless integration of digital and linear media technologies whichno longer constitute separate domains. During the year under review your Company moved toa new media architecture with hybrid storage attributes enabled with cloud and edgeplayouts and deliveries which provided unprecedented flexibility in accessing managingpost production and delivery of media across the globe which the new linear-digitalparadigm requires. During the year your Company acquired the licenses and madeoperational its own teleports which provided greater flexibility in moving to a mixedsatellite-internet distribution your Company to overhaul its entire International anddomestic networks. Your Company's new distribution network is now supported by moreadvanced customer devices for delivering higher quality higher security and formatflexibility. Apart from this your Company also made dramatic enhancement in productionand management of short form contents with cost efficient frameworks while maintainingleading edge technologies. With this your Company is now technology ready for futureregulatory requirements in terms of content attributes and rights management across theglobe and embrace new traffic and revenue management formats appropriate to the size anddiversity of the operations.
Foreign Exchange Earnings & Outgo
During the Financial Year 2018-19 the Company had Foreign Exchange earnings of Rs.3350 million and outgo of Rs. 1346 million.
17. DISCLOSURES i. Particulars of loans guarantees and investments
Particulars of loans guarantees and investments made by the Company as required undersection 186 (4) of the Companies Act 2013 and the Listing Regulations are contained inNote No 36 to the Standalone Financial Statements.
ii. Transactions with Related Parties
All contracts/arrangements/ transactions entered by the Company during the financialyear with related parties were on an arm's length basis in the ordinary course ofbusiness and in compliance with the applicable provisions of the Companies Act 2013 andListing Regulations. During FY 2018-19 there are no materially significant Related PartyTransactions by the Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Company atlarge. Details of Related Party Transactions will be available on your Company's website.
All related party transactions specifying the nature value and terms and conditionsof the transactions including the arms-length justification are placed before the AuditCommittee for its approval and statement of all related party transactions carried out isplaced before the Audit Committee for its review on a quarterly basis. During the yearunder review there have been no materially significant related party as defined underSection 188 of the Act and Regulations 23 the Listing Regulations and accordingly notransactions are required to be reported in Form AOC-2 as per Section 188 of the CompaniesAct 2013.
iii. Risk Management
Your Company has well-defined operational processes to ensure that risks are identifiedand the operating management is responsible for identifying and implementing mitigationplans for operational and process risks.
Key strategic and business risks are identified and managed by senior management teamwith active participation of the Risk Management Committee. The risks that matter (RTM)and their mitigation plans are updated and reviewed periodically by the Risk ManagementCommittee of your Board and integrated in the Business plan for each year. The details ofconstitution scope and meetings of the Risk Management Committee forms part of theCorporate Governance Report. In the opinion of the Board currently there are no risks thatmay threaten existence of the Company.
iv. Internal Financial Controls and their adequacy
Your Company has adequate internal financial controls and processes for orderly andefficient conduct of the business including safeguarding of assets prevention anddetection of frauds and errors ensuring accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. The Audit Committeeevaluates the internal financial control system periodically and at the end of eachfinancial year and provides guidance for strengthening of such controls wherevernecessary. As part of Enterprise Risk Assessment and Internal Control evaluation and witha view to enhance related effectiveness of control your Company is modifying its systemsand processes with technology enablement for film acquisition.
v. Deposits & Unclaimed Dividend/Shares
Your Company has not accepted any public deposit under Chapter V of the Companies Act2013. During the year under review in terms of the provisions of Investors Education andProtection Fund (Awareness and Protection of Investors) Rules 2014 unclaimed dividenddeclared by the Company for Financial Year 2010-11 aggregating to Rs. 1.94 Million wastransferred to Investors Education and Protection Fund.
Additionally in compliance with the requirements of The Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (IEPFRules) as amended your Company had during the year under review transferred 108070Unclaimed Equity Shares of Rs. 1 each to the beneficiary account of IEPF Authority.
The said Unclaimed Dividend and/or Unclaimed Equity Shares can be claimed by theShareholders from IEPF authority after following process prescribed in IEPF Rules. DuringFY 2019 an aggregate of 220 Unclaimed Equity Shares of the Company were re-transferred bythe
IEPF Authority to the beneficiary accounts of upon specific refund claims andcompletion of verification process by the Company and IEPF Authority.
vi. Annual Return
Annual Return of the Company for financial year ended March 31 2019 as required underSection 92 of the Companies Act 2013 will be available on the website of the Companywww.zeeentertainment.com transactions by the Company
vii. Sexual Harassment
Your Company is committed to provide safe and conducive working environment to all itsemployees and has zero tolerance for sexual harassment at workplace. In line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and rules thereunder your Company has adopted a Policy onprevention prohibition and redressal of sexual harassment at workplace and hasconstituted Internal Complaints Committee across various locations to redress complaintsreceived regarding sexual harassment. During the year under review 1 (one) complaint wasreceived by the Company and was investigated in accordance with the procedure andresolved.
viii. Regulatory Orders
No significant or material orders were passed by the tribunals which impact the goingconcern status and Company's operations in future.
Employees are vital and most valuable assets of your Company. Your Directors value theprofessionalism and commitment of all employees of the Company and place on record theirappreciation of the contribution and efforts made by all the employees in ensuringexcellent all-round performance. Your Board also thank and express their gratitude for thesupport and co-operation received from all stakeholders including viewers producerscustomers vendors advertising agencies investors bankers and regulatory authorities.
| ||For and on behalf of the Board of Directors |
| ||Punit Goenka |
| ||Managing Director & CEO |
|Place: Mumbai ||Adesh Kumar Gupta |
|Date: May 27 2019 ||Director |