Zee expects to recover dues from related parties over 12-24 months; HR firm to review Goenka’s compensation

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Published: January 23, 2020 4:00:58 AM

On the operating front, Zee conveyed that it would be in a position to convert 50% of profit to cash as the investment phase of the company was concluding.

Subhash Chandra will remain chairman emeritus at Zee Entertainment.Subhash Chandra will remain chairman emeritus at Zee Entertainment.

Punit Goenka, the CEO of Zee Entertainment Enterprises, on Wednesday said the company was expecting to recover trade receivables of Rs 750 crore from two entities over the next 12 to 24 months. In its quarterly results announcement, the company had said that Zee had agreed to a revised plan with these customers on recovering the dues and their ability to repay. In a conference call on Wednesday, Goenka said that the company had appointed a third party to deep dive into the finances of these companies and the outcome was that the money could be recovered over a period of time.

Goenka added that he would be the sole representative of the family on the board of the company, following the promoter family’s stake coming down to 4.87%. The reconstitution of the board would be complete by February, after names of new members were ratified by the board. Subhash Chandra will remain chairman emeritus at Zee Entertainment.

Goenka said that he would continue to serve the company as CEO till the board wanted him to do so. The board has also appointed an external human resource consulting firm to review the compensation of the CEO. Goenka’s current remuneration is Rs 8.3 crore. Following the resignation of Subodh Kumar and Neharika Vora in November, new independent directors would be appointed in February. In an investor call on Wednesday, Goenka said that the company had taken feedback from analysts and decided to park surplus cash in liquid assets. At the end of December 2019, cash and cash equivalents stood at Rs 1,767 crore.

Given that related party transactions and outstanding payments from some of these entities became a concern for investors, Goenka informed analysts that the audit committee had initiated an internal audit of related party transactions. The company was of the view that the money could be recovered from both Siti Cable and Dish TV. The company said it had taken a Rs 37-crore charge on account of delay in payments from these entities. The company said that it is of the view that the dues from both Dish and Siti would be recovered over 12-24 months.

On the operating front, Zee conveyed that it would be in a position to convert 50% of profit to cash as the investment phase of the company was concluding. Even operationally, Goenka said that the December quarter was a weak one as ad revenues were impacted due to a slowdown. “The worst phase is behind us and that growth will happen,” he added.

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