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डेक्कन क्रॉनिकल होल्डिंग्स

बीएसई: 532608  |  NSE: DCHL  |  ISIN: INE137G01027  |  Media & Entertainment

खोजें डेक्कन क्रॉनिकल होल्डिंग्स कनेक्शन Mar 11
निदेशकों की रिपोर्ट वर्षांत : Sep '12
Dear Shareholders,
 
 The Directors take pleasure in presenting the 10th Annual Report and
 the Audited Accounts of your Company for the year ended 30,h September,
 2012 together with the Auditors'' Report thereon.
 
 Financial Year
 
 The Company has extended its financial year by six months consequent
 upon which, the Balance sheet and profit and loss account
 under consideration is made up from 1st April, 2011 to 30th September,
 2012.Thus the financial year 2011 -12 are for Eighteen months.  The
 company has since obtained permission from the Registrar of Companies,
 Ministry of Corporate Affairs, Andhra Pradesh, to extend the financial
 year ending 31 March, 2012 till 30lh September, 2012 and also,
 extension of time for holding the Annual General Meeting by a period of
 three months i.e till 31!t March, 2013.
 
 Financial Results
 
 Your Company''s summarized financial results for the year under review
 is as under:
 
                                                          (Amount in Rs)
 
 Particulars                               2011 -12            2010-11
 
 Total Revenue                       8,43,41,42,713    10,31,70,52,071
 
 Profit/(Loss) before interest, 
 tax and depreciation               (3,08,27,39,095)    3,47,47,09,567
 
 Less: Interest and financial 
 charges                             7,33,87,72,125       59,01,14,992
 
 Profit/(Loss) before 
 depreciation & tax                (10,42,15,11,220)    2,88,45,94,575
 
 Less: Depreciation                    81,23,44,856       51,57,35,240
 
 Profit/(Loss)before tax           (11,23,38,56,076)    2,36,88,59,335
 
 Tax charge (current 
 and deferred)                        (82,98,19,351)      74,30,31,452
 
 Net profit/(Loss) for the year    (10,40,40,36,725)    1,62,58,27,883
 
 Appropriations & Adjustments:             -
 
 Effect of change in treatment 
 of franchise rights/others                               51,36,48,000
 
 Transfer to debenture 
 redemption reserve                                       50,00,00,000
 
 Transfer to general reserve                              60,00,00,000
 
 Surplus / (Deficit)for 
 the year                         (10,40,40,36,725)        1,21,79,883
 
 Balance in Profit & 
 Loss Account                       5,27,38,39,980      5,26,16,60,097
 
 Balance carried forward           (5,13,01,96,754)     5,27,38,39,980
 
 Dividend
 
 Due to lack of profits, your Directors are unable to propose any
 payment of dividend for the year under review.
 
 Liquidity Crisis / Restatement of liabilities
 
 During the period under review, your company suffered a reverses and
 liquidity constraints on account of termination of IPL Franchise
 agreement by BCCI, mismatch in the cash inflows and out flows of
 odyssey outlets business and accumulation of receivables. The
 management with a view to arrest losses and liquidity constraints has
 reviewed its policies in the interest of the Company and in the process
 some of the liabilities have been restated.
 
 Management Discussion and Analysis
 
 A detailed Management Discussion and Analysis covering operations
 review and outlook is provided in the Annual Report.
 
 Buy back of Equity Shares
 
 Pursuant to the Buy Back of shares announced during the previous
 financial year, your Company has completed the same and bought back the
 agreed 3,45,00,000 Equity shares of Rs. 21- each . The buyback issue was
 closed on 3rd January, 2012 consequent upon which, the paid up share
 capital of the Company as on 30th September,2012 stands reduced toRs.
 41,79,44,438/-consisting of 20,89,72,219 equity shares of Rs.  2/- each
 fully paid-up..
 
 Directors
 
 During the year, Mr. Krishan Premnarayen, Independent director has
 resigned from the board of directors and he was relieved of his
 directorship with effect from 30.01.2012. Mr N. Krishnan, Managing
 Director of the company has also resigned and he was accordingly
 relieved of his duties with effect from 20.07.2012.  Further, Mr. M
 Sukumar Reddy, Mr.Gurumurthy Kumar and Mr. V Suresh, independent and
 non executive directors have also tendered their resignations and the
 some have since been accepted by the board with effect from 08th
 December 2012. The board of directors placed on records its gratitude
 and appreciation for the services rendered by the above Directors
 during their tenure.
 
 On 08'' December 2012, board of directors inducted Dr V Lakshmana
 Charya, Mr Venkateswarlu Malapaka and Mr Suresh Srinivasan as
 additional directors, who are independent and non executive and the
 Company filed relevant forms with Registrar of Companies for the above
 appointments and resignation of the Directors. In view of the resignation
 of independent directors and induction of additional directors, the
 board of directors reconstituted the Audit committee, Investor
 grievances committee and Remuneration committee in compliance with
 clause 49 of the listing agreement with stock exchanges.
 
 The aforesaid additional directors, who were appointed by the board are
 liable for retirement at the ensuing annual general meeting and being
 eligible for reappointment, are proposed to be appointed as directors
 liable to retire by rotation in accordance with section 257 of the
 companies Act, 1956. Notices have been received, proposing the
 candidature of Dr V Lakshmana Charya, Mr Venkateswarlu Malapaka and Mr
 Suresh Srinivasan from some of the share holders of the company with
 relevant deposit amount. Your board of directors recommends their
 appointment as Independent and non executive directors liable to retire
 by rotation.
 
 Mr. T. Vinayak Ravi Reddy, Vice Chairman and Director was appointed as
 Vice chairman and Managing director at the meeting of Board of
 Directors held on 22.02.2013 for the remaining period of his tenure of
 office, subject to the approval of the same by the shareholders. The
 relevant resolution proposing the candidature of Mr.T Vinayak Ravi
 Reddy as Vice chairman and Managing Director is included in the notice
 convening this annual general meeting
 
 Commercial papers / Debentures
 
 The company has raised debt through commercial papers and some of them
 have been repaid on the due dates and the remaining commercial papers
 valued at Rs. 270 Crores are outstanding and yet to be closed and
 similarly the debt raised through debentures worth Rs. 481.65 Crores
 could not be redeemed on due dates due to liquidity problems.
 
 Investor protection fund
 
 The unclaimed dividend amounting to Rs. 25,475/- pertaining to the
 financial year 2004-05 is due for transfer to the Investor Education
 and Protection Fund (IEPF) as per the regulations of the Companies
 Act,1956.
 
 Shares Pledge by the Promoters/Directors
 
 As a result of the Lenders invoking the pledge of shares made by the
 Promoters of the Company as collateral security for the financial
 assistance provided to the Company , the promoters share holding as
 reflected in the depository has come down from 38.40% to 32.66% as at
 31 st December 2012. The Promoters have contested the invocation of the
 pledge and appropriation of the value by the lenders and the matter is
 pending to be resolved.
 
 Franchise rights of Deccan Chargers
 
 Franchise rights of Deccan Chargers
 
 Your Company is the owner of the Hyderabad Franchise Deccan Chargers
 of the Indian Premier League (IPL), created by the Board of Control for
 Cricket in India (BCCI).This is an indefinite right and the Company can
 operate the franchise as long as the IPL tournaments are conducted by
 BCCI. The consideration for acquiring the franchise rights of Rs.428.04
 Crores is payable to BCCI over a period of 10 years, which is
 renewable, in equal installments commencing from 2008 (IPL-1 ).The
 income accrues to the Company on this Franchise by way of share
 comprising of central revenue from BCCI, ticket sales, sponsorship etc.
 
 During this accounting period, BCCI terminated the IPL Franchise of the
 Company unilaterally under the pretext of breach of some of the terms
 of the Franchise Agreement. As per the orders ofthe Hon''ble High Court
 of Bombay, the parties viz., BCCI and the Company approached an
 Arbitrator for resolution of the disputes.  Company filed claim
 petition before the Arbitrator against BCCI claiming damages/
 compensation for loss suffered by the company on various counts on
 account of actions of BCCI.  Pending outcome of the arbitration, income
 on this disputed loss of profit has not been recognized for the period
 under review.
 
 Legal Cases
 
 During the period under review, some creditors filed cases against the
 Company and its Directors including petitionsfor winding up of the
 Company, in the High Court of Andhra Pradesh. The management has taken
 and been taking all diligent steps under legal advice, to defend the
 company in all the litigation. Since the matters are sub-judice, the
 exact liability of the Company can''t be ascertained at this point of
 time.
 
 The Ministry of Corporate Affairs has ordered an Inspection of Books of
 Accounts and other records under section 209A of the Companies Act, 1956
 and your company is taking steps to provide the necessary
 documents/records to comply with the order.
 
 Listing at Stock Exchanges
 
 The National Stock Exchange of India Limited has suspended the trading
 of securities of the Company vide email dated 15 January, 2013 with
 effect from 23.01.2013 due to non compliance of some of the provisions
 of the listing agreement. Steps have been already initiated to comply
 with the provisions of listing agreement and in the process, the
 Company has since applied the Stock Exchange for revocation of the
 suspension and the same is awaited.
 
 Report on Corporate Governance
 
 As required under Clause 49 of the Listing Agreement with the Stock
 Exchanges a report on Corporate Governance is given in the Annual
 Report. Certificate of the Auditor regarding compliance with the
 conditions of Corporate Governance is also given.
 
 Replies on the comments/ notes to accounts /Observations made by the
 Statutory Auditors
 
 Your directors noted for future guidance the observations of Statutory
 Auditors in the Auditors Report.
 
 Reply to Auditors Qualifications/ Notes to Accounts/ Observations
 
 Note No. 27.01 Regarding the Contingent Liabilities: The same will be
 taken into account when the liabilities get crystallized.
 
 Note No.27;06 Regarding managerial remuneration: Due to no
 profits/inadequacy of profits, remuneration paid to the executive
 directors resulted in excess of permissible limit as such, the company
 will take appropriate steps to obtain necessary approvals from the
 central government.
 
 Note No.27.10 read with paragraph No.f) iii) of the report of the
 Auditors regarding Confirmation of Balances: Without reciprocal action
 from the Debtors and Creditors and in the absence any dispute regarding
 their amounts, the Company has accounted for the amounts due from the
 debtors and due to the creditors as per its books of accounts. The
 Company is in the process of obtaining confirmation from the parties
 wherever possible. In the absence of any note or information contrary
 to the Balances shown by the Company in respect of Debtors and
 Creditors, no adverse inference can be drawn for any negative or
 variation impact on the profit and loss of the company and
 consequently, no provision for any uncertain or imaginary adverse
 variation can be made in the books of accounts of the Company. Some
 of the lenders have got the properties mortgaged to them transferred in
 their names and some out of those lenders gave an option to the Company
 to buy back the properties conveyed to them. So far, these lenders have
 not confirmed the amounts of loan if any adjusted by the transfer of
 properties, how the values and consideration have been arrived at, the
 reschedulement of loan, if any, or refund of excess over the liability
 etc., and in the absence of the same, recognition of the sale or the
 profit or loss on sale of assets or adjustment of loan account will not
 arise.
 
 Note No.27.11 read with paragraph No. 4(f)(ii) of the report of the
 Auditors regarding restructuring of operations and Reinstatement of
 Assets and Liabilities: Consequent upon slowdown in the overall
 economy, downward trend in the industrial growth and additional costs
 in running the business and industry and failure in performance of the
 payment obligations by the parties against receivables or discharge of
 corresponding liabilities by them, the management felt it reasonable
 and expedient to review the policies with regard to the above and other
 core sectors of business and reinstate the assets and liabilities in
 line with the changed scenario. It is in this context, the management
 decided to reinstate the assets and liabilities as per the arrangement
 reached between the concerned parties, in the financial statements. As
 per the arrangement, the Company captured the value of precious
 intangible asset i.e., the Brands known as Deccan Chronicle and Andhra
 Bhoomi, for an agreed sum of Rs 2,905.32 Crores as against the value of
 around Rs.3,700.00 crores as arrived by the Valuation Consultant in his
 report. By virtue of the aforesaid review of policies and consequential
 reinstatement of assets and liabilities as per the arrangement, Rs.
 2,905.32 Crores representing the value of the Brands has now been shown
 an intangible asset under development against receivables with
 corresponding liability to the amount in the form of borrowings from
 various lenders. The Management after careful consideration feels that
 capturing of Brands will do well to the Company and enhances the
 enterprise value of your company. In addition, the Brands have been
 synonymous with the Company as its main business is associated with the
 same. In modern environment, Corporate value and earning power are
 decided and generated by both class of assets, often more by
 intangibles than tangibles and more so, in the news paper industry.
 Moreover, the objective of the management in the above process is to
 help a realistic assessment of company''s real economic value done at
 any given point of time. In view of these reasons and substantial
 information and inputs with statistical and mathematical support, the
 company and its management are quite confident that there would not be
 any shortfall requiring any provisioning or any impact on the loss
 reported for the year under subject. The parties are in the process of
 concluding the transfer of ownership over the brands to the Company to
 the extent of Rs 2,905.32 crores where only few technicalities are left
 and hence, these amounts are shown under the Head Intangible Assets
 under Development -Brand on the Assets side under Fixed Assets with
 corresponding liability in the form -of borrowings have been reinstated
 in the Balance Sheet.
 
 Note No.27.13:
 
 The Company''s operations of odyssey dealing in retail trading outlets
 in the products like books, publications, periodicals, toys,.
 
 Compact Disks and music CDs etc., has been severely affected due to
 heavy competition from the online merchandised sales and the same
 coupled with adverse market conditions, forced the company to scale
 down its operations and discontinue the sales outlets at various places
 in order to rationalize the business operations by reducing the losses.
 The Management feels that scaling down the Odyssey operations will
 arrest further losses on the above count of business. Hence a sum of
 Rs.65.91 Crores has been written off towards termination of lease
 deposits, assets, loans and advances etc and steps are initiated to
 recover some of the lease deposits and loans and advances due from
 outlet owners.
 
 NoteNo.27.14:
 
 The Company has been making serious efforts to resolve outstanding
 issues with banks, financial Institutions and NBFCs and creditors and
 is confident of resolving the issues by way of restructuring of the
 loan/interest accrued as per the scheme with the lenders/Creditors and
 the company is taking steps to defend the legal cases/winding up
 petitions filed by various creditors/lenders. None of the winding up
 petition was so far admitted. All the claims are contested and in few
 cases, the company raised counter claims too.
 
 Note No.27.15,27.16and 27.17:
 
 The Board of Directors has taken note of the observations of Auditors
 which are self explanatory in nature.
 
 The notes and remarks of Auditors are self-explanatory and therefore
 do not require any further clarifications.
 
 Reply to the qualification made by the Auditors under paragraph f )(i)
 of their Audit report as regards going Concern assumption: - The
 assets and liabilities are recorded on the basis that the entity will
 be able to realize its assets and discharge the liabilities in the
 normal course of business. Merely because, some commercial decisions of
 the Management did not yield the required results should not be
 considered as factor to doubt the going concern assumption. The main
 business of the Company is not affected by the adverse conditions
 reported by the Auditors in their report. The Company challenged the
 action of BCCI and raised the dispute as also, claimed
 compensation/damages for the loss caused by the actions of BCCI and
 presently, these matters are under Arbitration. There are receivables
 representing the share of central revenues due from BCCI and the same
 have not been remitted so far to the Company. The downward trend and
 slowdown in the economy resulted in losses to the Odyssey business.
 Hence the decision to scale down the operations on the above count has
 helped the company to curtail further losses and save it from being
 pushed into major crisis and irretrievable situation. Next issue is the
 winding petitions filed by some of the creditors. So far, none of the
 petition filed seeking to wind up the company was admitted as such, no
 adverse inferences can be drawn against the Going concern assumption.
 The Company is contesting all the cases. The management has been taking
 stock of the situation regularly and adjusting its priorities to tide
 over the difficulties. The company will be in a position to discharge
 its liabilities and continue the operations without any interruption.
 In view of these reasons the management is advised that there is no
 threat to the Going Concern status of the company
 
 Note 27.18 read with Paragraph No. 4 (f) (v) of the Audit report
 relating to non-disclosure of details as regards the principal overdue
 and interest etc., the same are awaited from the parties.  Some of the
 parties preferred legal routes and some others are reconciling the
 figures. The Company has all the data and once the confirmation is
 received from the parties, necessary details will be furnished.
 
 Rest of the observations of the Auditors is self explanatory and they
 are noted for guidance and compliance.
 
 Fixed Deposits
 
 During the year under review, your company has neither invited nor
 accepted any deposits from the public.
 
 Statutory Auditors
 
 The Company''s Statutory Auditors M/s. C. B. Mouli & Associates,
 Chartered Accountants, hold office up to the conclusion of the
 forthcoming Annual General Meeting. It is proposed to re- appoint M/s.
 C. B. Mouli & Associates, Chartered Accountants, Statutory Auditors of
 the Company to hold office from the conclusion of this Annual General
 Meeting until the conclusion of the next Annual General Meeting of the
 Company. The necessary resolution seeking approval of Statutory
 Auditors has been incorporated in the notice convening the Annual
 General Meeting.
 
 Particulars of Employees
 
 Information as per Section 217(2A) of the Companies Act, 1956 read with
 the Companies (Particulars of employees) Rules 1975 as amended from
 time to time forms part of this report. However, as per the provisions
 of Section 219(1) (b)(iv) of the Act, the Report and Accounts are being
 sent to all members excluding the statement containing the particulars
 of employees to be provided under section 217(2A) of the Act. Any
 member interested in obtaining such particulars may write to the
 Company Secretary/ Compliance officer at the Registered Office of the
 Company.
 
 Directors'' Responsibility Statement
 
 Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956
 with respect to Directors'' Responsibility Statement, it is hereby
 confirmed;
 
 (I) that in the preparation of the annual accounts for the financial
 year ended 30'' September, 2012, the applicable Accounting Standards
 have been followed along with proper explanations relating to material
 departures;
 
 (ii) that the directors had 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 the Company at the end of the financial year and of the
 profit or loss of the Company for the year under review;
 
 (iii) that the directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of the
 Company and for preventing and detecting fraud and other
 irregularities:
 
 (iv) that the directors had prepared the annual accounts for the
 financial year ended 30th September,2012 on a going concern basis.
 
 Conservation of Energy, Technology Absorption
 
 Particulars regarding conservation of energy, technology absorption are
 not applicable to printing and publishing of newspapers and
 periodicals.
 
 Foreign Exchange Earnings and Outgo
 
 In accordance with the provisions of Section 217(1 )(e) of the Companies
 Act, 1956, read with the Companies (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988, the information relating to
 foreign exchange earnings and outgo is provided as under:
 
                                                        (Rs. in Rupees)
 
 Particulars                             2011-12          2010-11
   
 Foreign Exchange Earnings          15,24,94,924            Nil
 
 Foreign Exchange Outgo            285,36,02,418       223,04,82,000
 
 Acknowledgements
 
 The Directors take this opportunity to thank Company''s customers,
 suppliers, bankers, financial Institutions for their consistent support
 to the Company. Your Directors express their appreciation for the
 dedicated and sincere services rendered by the employees of the Company
 at all levels. Your Directors also wish to express their gratitude to
 the Shareholders for the confidence reposed by them in the Company and
 for the continued support and co-operation.
 
                                         For and on behalf of the Board
 
                                                     T.Venkattram Reddy
 
                                                               Chairman
 
 Secunderabad, February 22,2013
स्रोत: रेलीगरे टेचनोवा

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