DIRECTORS' REPORT TO THE MEMBERS, Your Directors have pleasure in presenting their 34th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2015 During the year under review, on a standalone basis, your Company did not generate revenue. Your Directors are exploring various business options and the same are expected to get implemented soon. On a standalone basis, your Company posted loss of Rs. 471.01 lakhs as against loss of Rs. 352.07 lakhs in the previous year. On a consolidated basis, your Company's revenues stood at Rs. 6723.44 lakhs as against Rs. 5896.56 lakhs in the previous year. The revenues from operations were Rs. 6542.88 lakhs as against Rs. 5896.56 lakhs in the previous year thereby registering a growth of 11%. Your Company also registered a profit (after tax) of Rs. 201.81 lakhs against the loss of Rs. 99.14 Lacs during the previous year. 2. DIVIDEND: In view of the losses incurred by the Company during the year under review, your Directors do not recommend any dividend for the financial year ended 31st March 2015. 3. INCREASE IN THE PAID-UP & ISSUED SHARE CAPITAL: During the year under review, the Company made an allotment of 6,500,000 equity shares of Rs. 10/- each at par on a preferential basis to the following promoters viz., (1) Ferrari Investments and Trading Company Private Limited (2) Meridian Holding and Leasing Company Private Limited. The said preferential issue was approved by the shareholders at the 33rd Annual General Meeting of the Company held on 8th August 2014. Subsequent to the aforesaid allotment, the issued and paid-up share capital of the Company stands increased from Rs. 588,352,760 (Rupees Fifty Eight Crores Eighty Three Lacs Fifty Two Thousand Seven Hundred and Sixty Only) divided into 58,835,276 (Five Crores Eighty Eight Lacs Thirty Five Thousand Two Hundred and Seventy Six) equity shares of Rs. 10/- (Rupees Ten Only) each to Rs. 653,352,760 (Rupees Sixty Five Crores Thirty Three Lacs Fifty Two Thousand Seven Hundred and Sixty Only) divided into 65,335,276 (Six Crores Fifty Three Lacs Thirty Five Thousand Two Hundred and Seventy Six) equity shares of Rs. 10/- (Rupees Ten Only) each. 4. FINANCE: During the year under review, your Company did not raise any capital from the capital markets either by way of issue of equity shares /ADR/GDR / or any debt by way of debentures. The Company continued to get financial assistance from its lenders within the overall facilities to meet the working capital requirements. 5. PARTICULARS OF LOANS, GUANARNTEES OR INVESTMENTS: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 6. DEPOSITORY SYSTEM: The Company's equity shares are compulsorily tradable in electronic form. As of 31st March 2015, 99.99% of the Company's total paid-up capital representing 65,333,311 equity shares is in dematerialized form. In view of the benefits offered by the depository system, members holding shares in physical mode are advised to avail the demat facility. 7. PUBLIC DEPOSITS: Your Company did not invite or accept deposits from public during the year under review. 8. SUBSIDIARY COMPANIES: No new subsidiary was incorporated / acquired by the Company during the year under review. Next Radio Limited ("NRL"): NRL is into the business of broadcasting. It was among the first private players to venture into private FM broadcasting and has established "Radio One" as the premium FM Brand in top 7 cities of the country viz. Delhi, Mumbai, Chennai, Kolkata, Bangalore, Pune, and Ahmedabad. NRL operates under frequency 94.3 MHz in all its cities except for the city of Ahmedabad where it operates under the frequency 95 MHz. During the year under review, the revenues of NRL stood at Rs. 6723.44 lakhs as against Rs. 5896.56lakhs in the previous year. The revenues from operations increased by 11% and stood at Rs. 6542.88 lakhs (Previous Year: Rs. 5896.56 lakhs). NRL also registered profit (after tax) of Rs. 673.96 lakhs against the profit of Rs. 253.88lakhs for the previous year. The other three (3) subsidiaries viz., (a) Next Outdoor Limited, (b) One Audio Limited and (c) Digital One Private Limited are currently not operational. 9. CONSOLIDATED FINANCIAL STATEMENTS: Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard and forms part of the Annual Report. 10. AUDITED FINANCIAL STATEMENTS OF THE COMPANY'S SUBSIDIARIES: The audited financial statements, the Auditors Report thereon and the Board's Report for the year ended 31st March 2015 for the Company's subsidiary i.e. Next Radio Limited is annexed to this Report. Further a summary of the financial position of all the subsidiaries is also provided in the report. 11. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS: Report on Corporate Governance and Management Discussion and Analysis Report for the year under review, together with a Certificate from the J. U. Poojari & Associates, Practicing Company Secretaries regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. 12. DIRECTORS: The Board, at its meeting held on 18th June 2015, on the recommendation of the Nomination and Remuneration Committee, re-appointed Mr. Tariq Ansari as the Whole-time Director of the Company designated as the Chairman and Managing Director for a period of three (3) years, subject to the approval of the shareholders. As on the date of this report, the Company's Board consists of the following Independent Directors: (1) Mr. Narayan Varma (2) Mr. Adille Sumariwalla (3) Mr. Venkat Idupuganti (4) Mr. Dilip Cherian (5) Ms. Monisha Shah (6) Mr. Rajbir Singh Bhandal The period of office of the aforementioned Directors was liable to retire by rotation under the erstwhile Companies Act, 1956. In terms of Section 149 and other applicable provisions of the Companies Act, 2013, the aforementioned Directors, being eligible and offering themselves for appointment, are proposed to be appointed as Independent Directors for a term of five (5) years commencing from 23rd January 2015. The appointment of the aforementioned Directors has been approved by the Board of Directors at its meeting held on 23rd January, 2015 Brief Profile of the aforementioned proposed appointees together with other disclosures in terms of Clause 49 of the Listing Agreement are provided in the Notes to the Notice. 13. BOARD & COMMITTEE MEETINGS: During the year under review, the following Board/Committee Meetings were convened and held: (a) Seven (7) Board Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. (b) Four (4) Audit Committee Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. (c) One (1) Nomination & Remuneration Committee Meetings were held, details of which are given in the Corporate Governance Report. 14. BOARD EVALUATION: Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee and the Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 15. REMUNERATION POLICY: The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 16. EMPLOYEE REMUNERATION: The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section (12) of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming the part of this report as Annexure C. 17. EMPLOYEE STOCK OPTION PLAN: Pursuant to the Company's Employee Stock Option Scheme 2008, the Board of Directors has, on the recommendation of the Nomination & Remuneration Committee, at its meeting held on 23rd January 2015, granted 200,000 stock options to one of its employees. Details as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Option Purchase Scheme) Guidelines, 1999, are attached as Annexure B. 18. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that: (a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2015 and of the profit and loss of the Company for the financial year ended 31st March, 2015; (c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the annual accounts have been prepared on a 'going concern' basis; (e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. 19. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made 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 are placed before the Audit Committee as also the Board for approval. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. 20. AUDITORS: M/s. Haribhakti & Co. LLP, Chartered Accountants, (Firm Registration No. 103523W), Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. A certificate to the effect that their appointment, if made, will be within the limits prescribed under Section 141 of the Companies Act, 2013, has been obtained from them. The Board, on the recommendation of the Audit Committee, recommends the appointment of M/s. Haribhakti & Co. LLP, as the Statutory Auditors of the Company for the financial year 2015-16. 21. SECRETARIAL AUDIT: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s.J. U. Poojari & Associates, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year ended 31st March 2015. The Report of the Secretarial Audit Report is annexed herewith as Annexure 'A'. Directors' explanation on the comments of the Secretarial Auditor for the yearended 31st March 2015 as set out in his Secretarial Audit Report dated 18th June 2015 is as follows: (i) With reference to sub-clause (a) of clause (v) of the said report wherein the Secretarial Auditor hasmentioned non-filing of Form MGT-14 in respect of the resolution passed at the Board Meeting held on 29th April 2014 relating to re-appointment of Mr. Tarique Ansari, Managing Director of the Company, the Board would like to inform you that the said Form shall be filed with the Ministry of Corporate Affairs at the earliest. (ii) With reference to sub-clause (b) of clause (v) of the said report wherein the Secretarial Auditor has mentioned non-filing of Form MGT-14 in respect of the resolutions passed at the Board Meetings held on 7th July 2014 and 17th February 2015 relating to further issue of securities, the Board would like to inform you that the said Forms shall be filed with the Ministry of Corporate Affairs at the earliest. (iii) With reference to sub-clause (c) of clause (v) of the said report wherein the Secretarial Auditor has mentioned that the remuneration to Mr. Tarique Ansari, Managing Director of the Companyin excess of the permissible limit under Section 197 read with Schedule V of the Companies Act, 2013,the Board would like to inform you that the Company had made an application to the Ministry of Corporate Affairs ("MCA") for payment of excess remuneration to Mr. Ansari. The MCA has, vide its letter dated 12th June 2015, rejected the Company's application. The Company is now in the process of filing an application to the MCA for seeking waiver for recovery of excess remuneration paid to Mr. Ansari for the period. 22. DIRECTORS' EXPLANATION ON AUDITOR'S REPORTS: The Company's exposure in its subsidiary Next Radio Limited (Formerly known as Radio One Limited) through investments is Rs. 15,602.86 lakhs. Though net worth of the subsidiary is substantially eroded, no provision for impairment on this account is considered necessary by the management taking into consideration the nature of the Radio business and gradual improvement in the performance of the subsidiary. Further, the management has obtained a valuation of the Radio business from an independent valuer and based on his report, the management does not believe that any provision is necessary against exposure in Radio business. Consequently no impairment of goodwill on consolidation is considered necessary. 23. EXTRACT OF ANNUAL RETURN: Pursuant to sub-section 3(a) of section 134 and sub-section (3) of section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the annual return as on 31st March, 2015 forms part of this report as Annexure 'D'. 24. RISK MANAGEMENT: As per the revised Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee comprising of Mr. I. Venkat, Independent Director, Ms. Monisha Shah, Independent Director and Mr. Ismail Dabhoya, Chief Financial Officer as its members on 23rd January, 2015. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are periodically discussed at the meetings of the Company. 25. VIGIL MECHANISM: Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report. 26. SEXUAL HARRASMENT POLICY: During the year under review the Company has not received any complaint from the employees related to sexual harassment. The Company has in place sexual harrasment policy which is available on the Company's website. 27. ENERGY CONVERSATION, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO: A. Conversation of Energy: NIL B. Technology Absorption: NIL C. Foreign Exchange Earning: NIL D. Foreign Exchange Outgo: NIL 28. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. For Next Mediaworks Ltd. Tarique Ansari Chairman & Managing Director (DIN: 00101820) Place: Mumbai Date : 18th June, 2015 |