28 Apr 2017 | Livemint.com

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Zee Entertainment Enterprises Ltd.

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  • 530.00 -2.20 (-0.41%)
  • Vol: 217233
  • BSE Code: 505537
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NSE

  • 535.55 0.00 (0%)
  • Vol: 1616918
  • NSE Code: ZEEL
  • PREV. CLOSE
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  • OPEN PRICE
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  • BID PRICE (QTY.)
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    0.00(0)

Zee Entertainment Enterprises Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

COMPANY'S GOVERNANCE PHILOSOPHY

The convergence of governance practices brings to the fore the critical role played by the Board to ensure governance framework enjoins higher level of transparency and effective governance standards to enhance the competitiveness and to protect long term interests of all stakeholders. Corporate Governance, which assumes great deal of importance at Zee Entertainment Enterprises Limited (ZEE), is intended to ensure consistent value creation for all its stakeholders. ZEE believes that the governance practices must ensure adherence and enforcement of the sound principles of Corporate Governance with the objectives of fairness, transparency, professionalism, trusteeship and accountability, while facilitating effective management of the businesses and efficiency in operations. The Board is committed to achieve and maintain highest standards of Corporate Governance on an ongoing basis. ZEE Board has approved and implemented a comprehensive Corporate Governance Manual, containing guidelines covering decision making, authority levels, the policies and processes, which provide an effective and flexible governance framework in the Company realizing the need to ensure an effective mechanism of checks and balances with transparency and accountability as the hallmark.

POLICIES

In compliance with the requirements of Listing Agreements with Stock Exchanges, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), SEBI regulations and Companies Act, 2013, Board of Directors of the Company has approved various policies, as detailed herein:

WHISTLE BLOWER & VIGIL MECHANISM POLICY

As per Section 177 of the Companies Act, 2013 and Regulation 22 of Listing Regulations a comprehensive Whistle Blower and Vigil Mechanism Policy has been approved and implemented within the organization. The policy enables the employees and directors to report instances of any unethical act or suspected incidents of fraud or violation of Companies Code of Conduct or ethics policy. This Policy (copy of which is uploaded on the website of the Company) safeguards whistleblowers from reprisals or victimization.

CODE OF CONDUCT

The Company has also adopted a Code of Conduct for the Members of the Board of Directors and Senior Management, and all the Directors and senior functionaries as defined in the said Code provide their annual confirmation of compliance with the Code. Copy of the Code is available on the website of the Company www.zeetelevision.com Besides the Code, the Company has also put in place a Policy on Ethics at Work Place which is applicable to all employees. The role and responsibilities of Independent Directors as prescribed in Schedule IV of the Companies Act, 2013 and/or prescribed in Listing Regulations forms part of the appointment letters issued to Independent Directors.

A declaration affirming compliance with the Code of Conduct by the Members of the Board and Senior Management Personnel is given below:

DECLARATION

I confirm that the Company has obtained from all Directors and Senior Management Personnel of the Company their affirmation of compliance with the Code of Conduct for Members of the Board and Senior Management of the Company for the financial year ended March 31, 2016.

RELATED PARTY TRANSACTION POLICY

In compliance with the requirements of Regulation 23 of Listing Regulations, the Board of Directors of the Company has approved a Related Party Transaction Policy, to facilitate management to report and seek approval for any Related Party Transaction proposed to be entered into by the Company. The said Related Party Transaction Policy can be viewed on www.zeetelevision.com

POLICIES & CODE AS PER SEBI INSIDER TRADING REGULATIONS

In accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated and approved (i) an Insider Trading Code to regulate dealing in the securities of the Company by designated persons in compliance with the regulations; and (ii) a Policy for Fair Disclosure of Unpublished Price Sensitive Information.

Mr M Lakshminarayanan, Chief Compliance Officer & Company Secretary of the Company is Compliance Officer for the purposes of Insider Trading Code, while Mr. Mihir Modi, Chief Finance & Strategy Officer of the Company has been appointed as Chief Investor Relations Officer for the purpose of Fair Disclosure Policy.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

Independent Directors are familiarized with their roles, rights and responsibilities in the Company as well as with the nature of industry and business model of the Company through induction programs at the time of their appointment as Directors and at regular intervals through deep-dive on various business segments of the Company. While review and approval of quarterly and annual financial statements of the Company are taken up detailed presentation covering inter alia economy and industry overview, key regulatory developments, strategy and performance of individual channels / profit centres is made to the Board.

Apart from the above policies, the Board has in accordance with the requirements of Companies Act, 2013 and Listing Regulations approved and adopted Policy for determining Material Subsidiary, Remuneration Policy, Material Events Determination and Disclosure Policy, Document Preservation Policy and Corporate Social Responsibility Policy. These policies can be viewed on Companies Website at www.zeetelevision.com

BOARD OF DIRECTORS

COMPOSITION AND CATEGORY OF DIRECTORS

ZEE has a balanced Board with combination of Executive and Non-Executive Directors to ensure independent functioning and the current composition of the Board is in conformity with Regulation 17(1) of Listing Regulations. Independent Directors of the Company provide appropriate annual certifications to the Board confirming satisfaction of the conditions of their being independent as laid down in Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) Listing Regulations.

None of the directors of the Company are related inter-se except for Dr Subhash Chandra, Non-Executive Chairman, who is the father of Mr Punit Goenka, Managing Director and CEO of the Company.

None of the Directors of the Company hold any securities of the Company, except Mr. Adesh Kumar Gupta.

BOARD PROCEDURE

The Board Meetings of the Company are governed by a structured agenda. The Board meetings are generally held at the Registered and Corporate office of the Company at Mumbai. The Company Secretary in consultation with Chairman, and the Managing Director & Chief Executive Officer finalizes the agenda of the Board meetings. All major agenda items, backed up by relevant and comprehensive background information, are sent well in advance of the date of the Board meeting(s) to enable the Board members to take informed decision. Any Board Member may, in consultation with the Chairman and with the consent of all Independent Directors present at the meeting, bring up any matter at the meeting for consideration by the Board. Senior management personnel are invited from time to time to the Board meetings to make requisite presentations on relevant issues or provide necessary insights into the operations / working of the Company and corporate strategies.

The Board periodically reviews Compliance Reports in respect of various laws and regulations applicable to the Company.

BRIEF PROFILE OF THE DIRECTORS PROPOSED TO BE APPOINTED/REAPPOINTED AT THE ANNUAL GENERAL MEETING

Dr Subhash Chandra, 65, Non-Executive Chairman of the Company and promoter of the Essel Group of Companies is a self-made man who has consistently demonstrated his ability to identify new businesses and lead them on the path of success.

Dr. Chandra is rightly referred to as the Media Moghul. With his pioneering vision and entrepreneurial mindset to achieve growth, he revolutionized the television industry by launching the country's first satellite television channel - Zee TV in 1992 and later the first private news channel Zee News.

For his contributions to the industry, Dr. Chandra has been awarded the International Emmy Directorate Award at 39th International Emmy Awards night in New York and has also been Honored with the Doctorate of Business Administration by the University of East London. Dr. Chandra's immense contribution to the socio - economic wellbeing, was recognised by Canada India Foundation by honoring him with the Global Indian Award.

As at March 31, 2016, apart from the Company Dr Subhash Chandra holds directorship in five (5) other Indian Public Limited Companies viz. Essel Infraprojects Limited, Essel Propack Limited, Zee Media Corporation Limited, Essel Highways Limited and Essel Utilities Distribution Company Ltd. Dr. Subhash Chandra also holds directorship in a Section 8 Company viz., Adhikaar Foundation. Dr Chandra does not hold any securities of the Company in his name as at March 31, 2016.

Mr. Adesh Kumar Gupta, 59, Chartered Accountant, Company Secretary and AMP from Harvard is a professional with rich experience of over 35 years in Corporate Strategy, M&A, Business restructuring, Fund raising, Taxation etc. During his distinguished career of over 3 decades in Aditya Birla Group, Mr Adesh Kumar Gupta held various senior positions (including Board positions) in companies in varied business including Indian Rayon, Birla Global Finance, Aditya Birla Nuvo Ltd and Grasim Industries Ltd. Post his retirement as Whole-Time Director & CFO of Grasim Industries Ltd, Mr. Gupta ventured into Business Finance & Corporate Service space as Designated Partner of Progressive Consulting & Business Advisory LLP.

Mr Adesh Kumar Gupta was awarded with Best CFO award by ICAI, IMA and Business Today. He had also represented FICCI as a Member of NACAS (National Accounting and Auditing Standards) which was instrumental in setting up Accounting Standards in India.

Apart from being Designated Partner of Progressive Consulting & Business Advisory LLP, Mr. Adesh Kumar Gupta currently sits on the Boards of Aditya Birla Insurance Broker Ltd and Aditya Birla Trustee Company Pvt Ltd.

As at March 31, 2016, Mr Adesh Kumar Gupta holds 218 Equity Shares of Rs. 1 each (0.00%) and 4578 Preference Shares of Rs. 1 each (0.00%) of the Company.

Prof. Sunil Sharma, 48, is a faculty at IIM Ahmedabad and did his Doctorate in Business Policy (Strategic Management). Prof. Sunil Sharma worked in Corporate Sector for 16 years before he shifted to academia and joined IIM Ahmedabad. His past corporate stints were with Mckinsey & Company, ONGC and NTPC. As a consultant he has advised organisations - both Indian and MNCs -operating in Oil & Gas, Telecom, Health and Mining Sectors in the areas of change management, organisation structure, cost optimisation, financial transformation, sales force productivity enhancement, strategy and leadership development and as a corporate professional, he has led teams in operations, maintenance, purchase, performance management and planning functions.

His research interests are in the areas of capability building, strategic decision making, entrepreneurship, risk and uncertainty, innovation, organisation, learning, leadership and management consulting. He has presented papers in leading international conferences and his work on capability building and growth challenges has been published in international journals.

Apart from the Company Prof. Sharma does not hold directorship in any other Indian Public Limited Companies. As on March 31, 2016, Prof. Sharma does not hold any securities of the Company.

Prof (Mrs) Neharika Vohra, 49, a Professor in Organisational Behaviour at IIM Ahmedabad, holds two post-graduate degrees and was first ranker in Graduation and Post-graduation in Psychology in India. She also holds Phd. in Social Psychology from University of Manitoba, Canada.

Prof (Mrs) Neharika Vohra has vast experience of over 24 years in MBA teaching, executive education, leadership development programs etc and has authored various books and research papers in top international journals such as Science, American Psychologist, and Journal of Personality and Social Psychology. She has been recipient of various awards and recognition in her professional field including 'Best Teacher Award' by University of Manitoba, 'Young Psychologist Award' by International Union of Psychologists. 'Learning Luminary Award' by OD Roundtable and 'Woman Achievers Award' by FICCI Ladies organisation.

Apart from the Company Prof (Mrs) Vohra does not hold directorship in any other Indian Public Limited Companies. As on March 31, 2016, Prof (Mrs) Vohra does not hold any securities of the Company.

In compliance with the requirements of Regulation 25 of the Listing Regulations and Section 149 read with Schedule IV of the Companies Act, 2013, the Independent Directors of the Company met on March 14, 2016 to review performance of the Chairman, Managing Director and other Non-Independent Directors, evaluate performance of the Board and review flow of information between the management and the Board.

Details of Board Committees are as mentioned herein:

A) AUDIT COMMITTEE

Constitution:

As at March 31, 2016, the Audit Committee of the Board comprised of four (4) Directors including Mr Manish Chokhani, Independent Director as Chairman and Prof. Sunil Sharma, Independent Director, Mr Adesh Kumar Gupta, Independent Director and Mr. Ashok Kurien, Non-Executive Director as its Members.

During the year under review, seven (7) meetings of the Audit Committee were held on May 21, 2015, July 14, 2015, October 14, 2015, January 15, 2016, February 6, 2016, March 14, 2016 and March 29, 2016.

Terms of reference

The Terms of reference and role of the Audit Committee are as per Regulation 18 and Schedule II part C of the Listing Regulations and Section 177 of Companies Act, 2013. The Committee meets periodically and inter alia:

• Reviews Accounting and financial reporting process of the Company;

• Reviews Audited and Un-audited financial results;

• Reviews Internal Audit reports, risk management policies and reports on internal control system;

• Discusses the larger issues that are of vital concern to the Company including adequacy of internal controls, reliability of financial statements/other management information, adequacy of provisions for liabilities and whether the audit tests are appropriate and scientifically carried out in accordance with Company's current business and size of operations.;

• Reviews and approves of transactions proposed to be entered into by the Company with related parties including any subsequent modifications thereto;

• Reviews functioning of Whistle Blower & Vigil Mechanism Policy; and

• Recommends proposals for appointment and remuneration payable to the Statutory Auditor, Internal Auditor and Chief Financial Officer.

The Audit Committee also reviews adequacy of disclosures and compliance with all relevant laws. Additionally, in compliance with requirements of Regulation 24 of the SEBI Listing Regulations, the Audit Committee reviews operations of Subsidiary Companies viz., its financial statements, significant related party transactions, statement of investments and minutes of meetings of its Board and Committees.

Audit Committee meetings are generally attended by the Managing Director & Chief Executive Officer, Chief Financial Finance & Strategy Officer and representative of Statutory

Auditors of the Company. Internal Auditors attend Audit Committee Meetings wherein the Internal Audit reports are considered by the Committee. The Company Secretary acts as the Secretary of the Audit Committee.

B) NOMINATION AND REMUNERATION COMMITTEE

Constitution

As at March 31, 2016 the Nomination and Remuneration Committee comprises of Prof. (Mrs) Neharika Vohra, Independent Director as Chairperson and Mr Adesh Kumar Gupta, Independent Director and Mr. Subodh Kumar, Non-Executive Vice-Chairman as Members.

During the year under review the Committee met twice on April 16, 2015 and October 14,  2015.

Terms of reference

The terms of reference of the Nomination and Remuneration Committee include:

• Formulation of guidelines for evaluation of candidature of individuals for nominating and/ or appointing as a Director on the Board including but not limited to recommendation on the optimum size of the Board, age / gender / functional profile, qualification / experience, retirement age, number of terms one individual can serve as Director, suggested focus areas of involvement in the Company, process of determination for evaluation of skill sets, etc.

• Formulation of the process for evaluation of functioning of the Board - individually and collectively;

• Recommending nominations / appointments to the Board, including Executive Directors / Independent Directors and/or Members of Board Committees, and suggest the terms of such appointments;

• Recommending all elements of remuneration package of Whole-time Directors including increment / incentives payable to them within the limits approved by the Board / Members; and

• Deciding and approving issuance of Stock Options, including terms of grant etc under the Company's Employee Stock Option Scheme

Performance Evaluation Criteria for Independent Directors

Performance of each of the Independent Directors are evaluated every year by the entire board with respect to various factors like personal traits which include business understanding, communicate skills, ability to exercise objective judgment in the best interests of the Company and on specific criteria which include commitment, guidance to Management, deployment of knowledge and expertise, management of relationship with various stakeholders, independence of behaviour and judgment, maintenance of confidentiality and Contribute to corporate governance practice within the Company.

Remuneration Policy

The guiding principle of the remuneration policy of the Company is that the remuneration and other terms of engagement / employment shall be competitive enough to ensure that the Company is in a position to attract, retain and motivate right kind of human resource(s) for achieving the desired growth set by the Company's management year on year thereby creating long-term value for all stakeholders of the Company

Remuneration payable to Executive Directors

As at March 31, 2016, the Board comprises of only one Executive Director viz. Mr. Punit Goenka, Managing Director & Chief Executive Officer. During the year under review, Mr Subodh Kumar, who held the position of Executive Vice Chairman with effect from January 22, 2014 resigned from his Executive position as at close of October 15, 2015 and continues as Non-Executive Vice Chairman with effect from October 16, 2015

Remuneration payable to Non-Executive Directors

During financial year 2015-16 Non-Executive Directors were paid sitting fee at the rate of Rs. 30,000/- for attending each meeting(s) of the Board and Committees thereof, other than Stakeholders Relationship Committee.

The Non-Executive Directors are additionally entitled to remuneration up to an aggregate limit of 1% of net profits of the Company by way of Commission for each financial year, as approved by the Members at the Annual General Meeting held on July 15, 2015. Within the aforesaid limit, the commission payable each year is determined by the Board based inter alia on the performance of, and regulatory provisions, applicable to the Company. As per the current policy, the Company pays equal amount of commission to Non-executive Directors on a pro-rata basis.

STAKEHOLDERS RELATIONSHIP COMMITTEE

Constitution

As at March 31, 2016, the Stakeholders Relationship Committee of the Board comprises of Mr Ashok Kurien, Non-Executive Director as Chairman and Mr Punit Goenka, Managing Director & CEO as the Member.

During the year under review, Stakeholders Relationship Committee met five (5) times on April 9, 2015, July 7, 2015, October 1, 2015, November 18, 2015 and January 7, 2016.

Terms of reference

Terms of reference of the Stakeholders Relationship Committee is to supervise and ensure efficient transfer of equity and preference shares of the Company and proper and timely attendance of investors' grievances. The Committee has delegated the power of approving requests for transfer, transmission, rematerialisation, and dematerialization etc of shares of the Company to the executives in the Secretarial Department of the Company.

RISK MANAGEMENT COMMITTEE

Constitution

The Risk Management Committee of the Board comprises of Mr Subodh Kumar, Non­Executive Director as Chairman and Mr Adesh Kumar Gupta, Independent Director, Mr Punit Goenka, Managing Director & CEO, Mr Mihir Modi, Chief Finance & Strategy Officer and Mr M Lakshminarayanan, Chief Compliance Officer & Company Secretary as its Members.

During the year under review the Committee met once on March 29, 2016.

Terms of reference

Terms of reference and the scope of the Risk Management Committee inter alia include (a) assisting the Board in fulfilling its Corporate Governance oversight responsibilities with regard to the identification, evaluation and mitigation of strategic, operational and other risks; (b) approving, implementing and monitoring the risk management framework / plan and associated practices within the Company; and (c) reviewing and approving risk-related disclosures.

OTHER BOARD COMMITTEES

In addition to the above, the Board has constituted following Committees to exercise powers delegated by the Board as per the scope mentioned herein:

I) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

I n compliance with the requirements of Section 135 read with Schedule VII of the Companies Act 2013, the Board has constituted Corporate Social Responsibility Committee comprising of Mr Subodh Kumar, Non-Executive Vice Chairman as its Chairman, Prof Sunil Sharma, Non-Executive Independent Director and Mr. Punit Goenka, Managing Director & CEO as Members. A detailed report on CSR activities undertaken by the Company during FY 15-16 forms part of this Annual Report. The CSR Committee met twice during FY 15-16 on February 5, 2016 and March 29, 2016.

II) FINANCE SUB-COMMITTEE

With a view to facilitate monitoring and expediting any debt fund raising process, approve financing facilities that may be offered and/or sanctioned to the Company by various Banks and/or Indian Financial Institutions from time to time, in the form of Term Loans, Working Capital facilities, Guarantee Facilities, etc., including the acceptance of terms and conditions of such facilities being offered and exercising such other authorities as may be delegated by the Board from time to time, the Board has constituted a Finance Sub-Committee comprising of Mr Ashok Kurien, Non-Executive Director and Mr. Punit Goenka, Managing Director & Chief Executive Officer as its Members.

III) CORPORATE MANAGEMENT COMMITTEE

The Board has also constituted a Corporate Management Committee comprising of Key Managerial Personnel of the Company to review, approve and/or grant authorities for managing day-to-day affairs of the Company within the powers delegated by the Board.

The Finance Sub-Committee and Corporate Management Committee meet as and when required to deliberate and decide on various matters within their respective scope or powers delegated by the Board.

DISCLOSURES

The Whistle Blower & Vigil Mechanism Policy approved by the Board has been implemented and no personnel has been denied access for making disclosure or report under the Policy to the Vigilance Officer and/or Audit Committee.

There are no materially significant related party transactions between the Company and its promoters, directors or key management personnel or their relatives having any potential conflict with interests of the Company at large. Transactions with related parties including material related party transaction with one of the wholly owned subsidiary of the Company Taj Television (India) Private Limited are disclosed elsewhere in the Annual Report.

There has not been any non-compliance by the Company and no penalties or strictures imposed by SEBI or Stock Exchanges or any other statutory authority on any matter relating to capital markets, during the last three years.

COMPLIANCE WITH NON-MANDATORY REQUIREMENTS

The Company has complied with all mandatory requirements of the Listing Regulations and the status of compliance with non-mandatory requirements of SEBI Listing Regulations are as detailed hereunder:

Audit Qualification - The financial statements of the Company are unqualified.

Chairman's Office - An office with requisite facilities is provided and maintained at the Company's expense for use by its Non-Executive Chairman. The Company also reimburses all travel and other expenses incurred in his furthering the Company's business interests.

Separate posts of Chairman and CEO - The Board currently consists of separate Chairman who is a Non-executive member of the Board and a Managing Director who is also a Chief Executive Officer of the Company.

MEANS OF COMMUNICATION

The Company has promptly reported all material information including declaration of quarterly financial results, press releases, etc. to all Stock Exchanges where the securities of the Company are listed. Such information is also simultaneously displayed immediately on the Company's corporate website www.zeetelevision.com  The quarterly, half yearly and annual financial results and other statutory information were generally communicated to the shareholders by way of an advertisement in a English newspaper viz. 'Daily News & Analysis (DNA)' and in a vernacular language newspaper viz. 'Punya Nagari (Marathi)' as per requirements of the Listing Regulations. The financial and other information are filed by the Company on electronic platforms of NSE and BSE.

Official press releases, presentations made to institutional investors or to the analysts and transcripts of Con-call are displayed on Company's corporate website, www.zeetelevision.com

Management Discussions and Analysis Report and Business Responsibility Report forming part of annual report are annexed separately

GENERAL SHAREHOLDER INFORMATION

Date, Time and Venue of Shareholder's Meeting  Meeting :

Annual General Meeting

Day & Date : Tuesday the 26th day of July, 2016

Time : 11 a.m.

Venue : Nehru Auditorium, Nehru Centre Dr. Annie Besant Road, Worli, Mumbai- 400 018

Financial Year : 2015-2016

Record Date : July 22, 2016

Dividend Payment Date : On or after August 1, 2016

Registered office

18th Floor A Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai - 400 013, India Tel: +91-22-7106 1234 Fax: +91-22-2300 2107

6. Corporate Identification Number L92132MH1982PLC028767

7. Listing on Stock Exchanges  

BSE Limited (BSE), Phiroze Jeejeebhoy Towers,  Dalal Street, Mumbai 400 001

The National Stock Exchange of India Limited (NSE)  Exchange Plaza, Bandra Kurla Complex, Bandra East Mumbai 400 051

Company has paid requisite Listing Fees to the Stock Exchanges for FY 2015-16

8. Stock Code

BSE 505537(Equity) 717503 (Preference)

NSE ZEEL EQ (Equity) ZEEL-P1(Preference)

Note: Consequent to Consolidation of Face Value of Preference Shares from Rs. 1 to Rs. 10 each, with effect from April 1, 2016, Stock Code of Preference Shares at NSE has changed to ZEEL-P2.

Reuters ZEE.BO (BSE) ZEE.NS (NSE)

Bloomberg Z IN (BSE) NZ IN (NSE)

9. ISIN No. Equity - INE256A01028

__Preference Shares -INE256A04014 (INE256A04022 - post consolidation)_

10. Registrar & Share Transfer Agent

Link Intime India Pvt Ltd (w.e.f. June 16, 2016)  C-13, Pannalal Silk Mills Compound, LBS Road, Bhandup West, Mumbai 400 078, India  Tel: +91-22-2594 6970  Fax: +91-22-2594 6969  E.Mail: rnt.helpdesk@linkintime.co.in

Dividend

As per the terms of issue of 6% Cumulative Redeemable Non-Convertible Preference Shares of Re 1 each, the Company had on April 13, 2016, paid Dividend @ 6% on the Preference Shares for the Financial Year 2015-16 to Preference Shareholders at the close of March 31, 2016.

The Board of Directors have recommended payment of Equity Dividend @ Rs. of 2.25 per share on paid up value of Re 1 per share i.e. 225% on the paid up equity capital of the Company and such Equity Dividend shall be payable upon approval by the Members of the Company on the outstanding capital as at the Record Date.

Equity Dividend, if approved by Members at the ensuing Annual General Meeting, will be paid to all those equity shareholders whose name appear in the Register of Members of the Company, after giving effect to all valid share transfers in physical form lodged with the Company or its Registrars on or before July 22, 2016 and in the list of beneficial owners furnished by National Securities Depository Limited and/or Central Depository Services (India) Limited, in respect of shares held in electronic form, as at the end of the business on July 22, 2016.

Dividend for the financial year ended March 31, 2009, which remains unpaid or unclaimed, will be due for transfer to the Investor Education and Protection Fund on completion of seven years. Members who have not encashed their dividend warrant(s) issued by the Company or ETC Networks Limited (since merged with the Company) for the financial year ended March 31, 2009, or any subsequent financial year(s), are requested to seek issue of duplicate warrant(s) by writing to the Registrar and Share Transfer Agent of the Company.

Information in respect of unclaimed dividend of the Company and ETC Networks Ltd. for the subsequent financial years and date(s) when due for transfer to Investor Education and Protection Fund is given below:

Change of Address

Members holding equity share in physical form are requested to notify the change of address/dividend mandate, if any, to the Company's Registrar & Share Transfer Agent, at the address mentioned above.

The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding equity share in dematerialized form are requested to submit their PAN, notify the change of address/dividend mandate, if any, to their respective Depository Participant (DP).Members holding shares in physical form can submit their PAN, notify the change of address/dividend mandate, if any, to the Company/Registrar & Share Transfer Agent.

Share Transfer System

Equity/Preference Shares sent for physical transfer or for dematerialization are generally registered and returned within a period of 7 days from the date of receipt of completed and validly executed documents.

Dematerialization of Shares & Liquidity

To facilitate trading of Equity an Preference shares of the Company in dematerialised form the Company has made arrangements with both the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Shareholders can open account with any of the Depository Participant registered with any of these two depositories. As on March 31, 2016, 99.84% of

the equity shares of the Company is held by 88,610 equity shareholders in the dematerialized form and the balance 0.16% is held by 801 equity shareholders in physical form and 99.83% of the preference shares of the company is held by 85,906 preference shareholders in the dematerialized form and the balance 0.17% held by 855 preference shareholders in physical form. Entire equity and preference shareholding of the promoters in the company is held in dematerialized form.

15. Sub-division of Shares

Pursuant to the approval of the members at the Meeting held on October 25, 1999, the Company had sub-divided the nominal face value of its equity shares from Rs. 10 per share to Re 1 per share, with effect from December 6, 1999. From this day onwards trading in equity shares of Re 1 each commenced and consequently the equity shares of Rs. 10 each ceased to trade on the exchanges.

For the shareholders who were holding Equity shares in physical form, the Company had sent intimation to seek exchange of the old certificates of face value of Rs. 10 each with new certificate of face value of Rs. 1 each. For the shareholders holding shares in demat form, the depositories automatically gave the effect of splitting of face value of shares by way of a Corporate action dated December 23, 1999.

Shareholders who could not exchange their old Equity certificates earlier for the new certificates and who are desirous of exchanging the same, should write to the Company or its Registrar and Share Transfer agent requesting for sub-divided share certificate and attaching old share certificate in original

17 Shareholders' Correspondence

The Company has attended to all the investors' grievances / queries / information requests except for the cases where the company is restrained due to some pending legal proceedings or court/statutory orders.

I t is the endeavor of the Company to reply all letters / communications received from the shareholders within a period of 5 working days.

All correspondence may be addressed to the Registrar & Share Transfer Agent at the address given above. In case any shareholder is not satisfied with the response or do not get any response within reasonable period, they may approach the Chief Compliance Officer & Company Secretary of the Company.