Mar 31, 2022
25. Commitments and contingent liabilities (Rs. in million) |
||||
Particulars |
As at 31.03.2022 |
As at 31.03.2021 |
||
a. |
Commitments |
|||
i) |
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) |
573.50 |
298.21 |
|
b. |
Contingent liabilities |
|||
i) |
Claims against the Company not acknowledged as debts* |
|||
Demand raised by UP Commercial Tax authorities for payment of VAT/GST on transfer of STB''s |
16.59 |
15.17 |
||
Demand raised by UP Entertainment Tax authorities for payment of Entertainment Tax |
- |
55.29 |
||
Demand raised by UP Commercial Tax authorities for payment of GST |
0.35 |
0.35 |
||
Demand raised by Rajasthan Commercial Tax authorities for payment of VAT |
- |
10.31 |
||
Demand raised by Bihar Entertainment Tax authorities for payment of Entertainment tax |
- |
63.82 |
||
Demand raised by Bihar Commercial Tax authorities for payment of VAT |
125.13 |
39.47 |
||
Demand raised by Karnataka Commercial Tax authorities for payment of VAT on transfer of STB''s |
286.97 |
237.25 |
||
Demand raised by Delhi Commercial Tax authorities for payment of VAT on Activation Charge |
9.88 |
9.92 |
||
Demand raised by Maharashtra Commercial Tax authorities for payment of VAT |
12.48 |
10.72 |
||
Demand raised by Custom Directorate of Revenue Intelligence |
- |
70.00 |
||
Demand raised by Jharkhand Commercial Tax authorities for payment of VAT |
81.63 |
70.51 |
||
Demand raised by Gujarat Commercial Tax authorities for payment of VAT |
- |
0.58 |
||
Demand raised by WB Entertainment Tax authorities for payment of Entertainment Tax |
1.26 |
1.26 |
||
Demand raised by Uttarakhand Commercial Tax authorities for payment of VAT |
9.10 |
27.17 |
||
ii) |
Guarantees |
|||
Bank guarantees |
1.81 |
1.81 |
||
iii) |
Other money for which the Company is contingently liable |
|||
Outstanding letter of credits |
- |
12.84 |
The Company has provided letter of financial support to its certain subsidiaries wherein it will provide the necessary financial support and financing arrangements to enable them to meet all its liabilities, as and when they fall due.
*The Company has paid deposit under protest towards the above claims aggregating to Rs. 446.60 million (31st'' March, 2021: Rs. 405.74 million).
(i) The Company is engaged mainly in the business of "distribution and promotion of television channels". The Board of Directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the Company''s performance, allocates resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore there is no reportable segment for the Company, in accordance with the requirements of Ind AS 108- ''Operating Segment Reporting'', notified under the Companies (Indian Accounting Standard) Rules, 2015.
The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.
The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk. Interest risk A decrease in the bond interest rate will increase the plan liability
Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability
Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries
of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Demographic risk The Company has used certain mortality and attrition assumptions in valuation of the liability.
The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions.
Regulatory risk Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act , 1972 (as
amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
No other post-retirement benefits are provided to these employees.
In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out as at 31st March, 2022 by KP Actuaries and Consultants LLP, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.
The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk. Interest risk A decrease in the bond interest rate will increase the plan liability
Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability
Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries
of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Demographic risk The Company has used certain mortality and attrition assumptions in valuation of the liability.
The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions.
Regulatory risk Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act , 1972 (as
amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
No other post-retirement benefits are provided to these employees.
In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out as at 31st March, 2022 by KP Actuaries and Consultants LLP, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
e) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
i) If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs. 3.87 million (increase by Rs. 4.14 million) [as at 31st March, 2021: decrease by Rs. 3.43 million (increase by Rs. 3.70 million)].
ii) If the expected salary growth increases (decreases) by 0.50%, the defined benefit obligation would increase by Rs. 4.17 million (decrease by Rs. 3.93 million) [as at 31st March, 2021: increase by Rs. 3.42 million (decrease by Rs. 3.25 million)].
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
g) The Company expects to make a contribution of Rs. NIL (as at 31st March, 2021: Rs. NIL) to the defined benefit plans during the next financial year.
h) The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.
i) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
j) The gratuity plan is unfunded.
1 Amount recoverable from DNL Employees Welfare Trust as at 31st March,2022: Rs. 0.07 million (As at 31st March, 2021: Rs. 0.36 million)
2 The Company has paid an amount of Rs. 16.17 million to Reliance Foundation (Enterprise in which KMP of enterprise exercising control are able to exercise significant influence) (Year 2020-21 Rs. 3.7 million) towards CSR Expenses.
3 The Company has provided letter of financial support to its certain subsidiaries wherein it will provide the necessary financial support and financing arrangements to enable them to meet all its liabilities, as and when they fall due.
4 In accordance with the Clause 34(3) of Securities and Exchange Board of India (Listing obligations & Disclosure Requirements) Regulations, 2015, advance in the nature of loans are as under:
(a) The company has given advances in the nature of Loan as defined in clause 34(3) of Securities and Exchange Board of India (Listing Obligations & Disclosures Requirements) Regulations, 2015 as under:
a) Capital Management
The Company''s management reviews the capital structure of the Company on periodical basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The Company monitors the capital structure using gearing ratio which is determined as the proportion of net debt to total equity.
The capital structure of the Company consists of NIL debt (borrowings - NIL, and offset by cash and bank balances and current investments in notes 11,9 and 12) and total equity of the Company.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans.
The funding requirements are met through a mixture of equity, internal fund generation, non-current and current borrowings. The Company''s policy is to use non-current and current borrowings to meet anticipated funding requirements.
(c) Risk management framework
The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The objective of the Company''s risk management framework is to manage the above risks and aims to :
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- provide management with reliable information on the Company''s risk exposure
- improve financial returns
(i) Market risk
Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price. Market risk comprises of three types of risks - interest risk, foreign currency, and other price risk such as equity price risk.
The Company''s activities expose it primarily to interest rate risk, currency risk and other price risk such as equity price risk. The financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and other current financial liabilities.
(ii) Liquidity risk
The Company requires funds both for short-term operational needs as well as for long-term investment needs.
The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening the balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.
(iii) Foreign currency risk
Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statements of Profit and Loss. As at the year end, the Company was exposed to foreign exchange risk arising from foreign currency payables denominated in foreign currency.
The results of Company''s operations may be affected by fluctuations in the exchange rates between the Indian Rupee against the US dollar. The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 1% against the functional currency of the Company.
For the year ended 31st March, 2022 and 31st March, 2021, every 100 basis points depreciation/ appreciation in the exchange rate between the Indian rupee and U.S. dollar will increase /decrease the Company''s profit before tax by Rs. 0.12 million (31st March, 2021 : Rs. 0.08 million).
(iv) Interest rate risk
The Company is exposed to interest rate risk on fixed deposits outstanding as at the year end. The Company is not exposed to interest rate risk on current borrowings outstanding at the year end. These exposures are reviewed by appropriate levels of management on a monthly basis. The Company invests in fixed deposits to achieve the Company''s goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.
The Company is exposed to price risks arising from fair valuation of Company''s investment in debt mutual funds. These investments are held for short term purposes. The sensitivity analysis below have been determined based on the exposure to debt funds at the end of the reporting year.
If prices had been 100 basis points higher/lower, profit before tax for the year ended 31st March, 2022 would increase/ decrease by Rs. 63.82 million (for the year ended 31st March, 2021: 57.81 million) as a result of the changes in fair value of these investments which have been designated as at FVTPL.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk primarily arises from trade receivables, balances with banks and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good credit ratings. Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Company''s policies on assessing expected credit losses is detailed in notes to accounting policies.
32. During the year ended 31st March 2019, the Company had allotted on preferential basis 28,14,48,000 equity shares of Rs.72.66 each at a premium of Rs.62.66 per share aggregating to Rs.20,450.00 million. The proceeds of preferential allotment amounting to Rs. 20,450.00 million have been temporarily invested in mutual funds, bonds and fixed deposits, pending utilisation for the same.
33. The Company has investments of Rs. 6117.22 million in subsidiaries and associates as on 31st March, 2022. The Company has made provision for impairment amounting to Rs. 256.69 million till 31st March, 2022 against these investments in subsidiaries and associates. Management is of the view that this provision is adequate and based on the projections, the management of the Company expects that these companies will have positive cash flows to adequately sustain its operations in the foreseeable future and therefore no further provision for impairment is considered necessary at this stage.
The Company has also compared the changes in the fair value of each financial asset and liability with relevant external sources to determine whether the changes is reasonable. The Company also discusses of the major assumptions used in the valuations.
For the purpose of fair value disclosures, the Company has determined classes of financial assets and liabilities on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
40. During the provisional assessment towards the license fees for the years 2011-12 to 2015-16 by the department of telecom (DOT), DOT has considered the revenue from the Cable business and other income for the purpose of calculating AGR or license fees and demanded Rs. 6278.90 million.
The company has filed three petitions before the Hon''ble TDSAT challenging the demand of license fees as raised by the Department. In all three petitions the Hon''ble TDSAT was pleased to restrain the department from taking any coercive measure for realisation of the demands.
Further the Hon''ble TDSAT in association of Unified Telecom Service Providers of India & others vs. Union of India has clearly held that imposition of interest and penalty is wholly unjustified.
42. Other Statutory Information
(i) There are no balance outstanding on account of any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
(ii) The Company has not advanced or loaned or invested fund to any other persons or entities including foreign entities (intermediary) with the understanding that intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiary) or
(b) provided any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(iii) The Company has not received any fund from any person or entities including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(iv) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income tax Act, 1961.
43. Previous year figures have been regrouped / rearranged wherever necessary to make them comparable.
44. The standalone financial statements were approved for issue by the Board of Directors on 13th April, 2022.
Mar 31, 2018
Notes :
i. Of the above, 2,644,091 (31 March, 2017 37,843,195 ; as at 1 April, 2016 31,923,370) equity shares having carrying value of Rs. 883.92 million (31 March, 2017 Rs. 3,224.41 million; as at 1 April, 2016 Rs 3,533.30 million) of investments in subsidiaries are pledged with banks against loans taken by the Company (See note 16).
ii. Of the above, Nil (31 March, 2017: 11,257,500; 1 April, 2016: 11,257,500) preference shares having carrying value of Rs. Nil (31 March, 2017: Rs. 107.05 million; 1 April, 2016: Rs. 94.54 million) of investments in subsidiaries are pledged with banks against loans taken by the Company (See note 16).
iii. Of the above, 3,982,440 (31 March, 2017: 15,241,169; as at 1 April, 2016: 9,373,622) equity shares amounting to Rs. 1,310.62 million (31 March, 2017 Rs. 277.43 million; 1 April, 2016 Rs. 452.40 million) of investments in subsidiaries are committed to be pledged with banks against loans taken by the Company.
iv. Of the above, Nil (31 March, 2017: 10,847,115; as at 1 April, 2016: 13,517,115 ) preference shares having carrying value of Rs. Nil (31 March, 2017: Rs. 110.57 million; 1 April, 2016: Rs. 118.37 million) of investments in subsidiaries are committed to be pledged with banks against loans taken by the Company.
Notes:
a) The average credit period on sales of services is 0-180 days. No interest is charged on any overdue trade receivables.
b) The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows:
* The Company has paid advance towards the above claims aggregating to Rs. 290.72 million (31 March, 2017: Rs. 314.48 million; 1 April, 2016: Rs. 201.55 million).
** Against this corporate guarantee, the obligation outstanding as on 31 March, 2018 is Rs. Nil (As at 31 March, 2017: Rs. 74.75 million, As at
1 April, 2016: Rs. 121.33 million).
30. Segment information
I. The Company is engaged mainly in the business of "distribution and promotion of television channels". The Board of Directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the Company''s performance, allocates resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore there is no reportable segment for the Company, in accordance with the requirements of Ind AS 108- ''Operating Segment Reporting'', notified under the Companies (Indian Accounting Standard) Rules, 2015. Also see note 49.
Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging Nil (at 31 March, 2017 - 8.55% to 9% per annum; at 1 April, 2016 - 8.55% to 9% per annum).
33. Finance lease as lessor
The Company has entered into finance lease arrangements for certain of its equipment which provide the Company an option to sell the assets at the end of the lease period. Future minimum lease payment and reconciliation of gross investment in the lease and present value of minimum lease payments.
Unguaranteed residual values of assets leased under finance leases at the end of the reporting period are estimated at Rs. Nil (at 31 March, 2017 - Rs. Nil at 1 April, 2016 - Rs. Nil).
The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effective interest rate contracted is approximately Nil (at 31 March, 2017 - 9% per annum, at 1 April, 2016 - 9% to 13% per annum)
34. Employee benefit plans
(i) Defined contribution plans
The Company operates defined contribution retirement benefit plans for all its qualifying employees. Where employees leave the plans prior to full vesting of the contributions, the contributions payable by the Company are reduced by the amount of forfeited contributions.
The total expense recognised in profit or loss of Rs. 25.61 million (for the year ended 31 March, 2017: Rs. 28.91 million) for provident fund contributions and Rs. 1.08 million (for the year ended 31 March, 2017: Rs. 0.46 million) for Employee State Insurance Scheme contributions represents contributions payable to these plans by the Company at rates specified in the rules of the plans. As at 31 March, 2018, contributions of Rs. 5.08 million (as at 31 March, 2017: Rs. 5.45 million, as at 1 April, 2016: Rs. 6.52 million) due in respect of 2017-2018 (2016-2017) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the respective reporting periods.
(ii) Defined benefit plans Gratuity plan
Gratuity liability arises on retirement, withdrawal, resignation, and death of an employee. The aforesaid liability is calculated on the basis of 15 days salary (i.e. last drawn salary plus dearness allowance) for each completed year of service or part thereof in excess of 6 months, subject to a maximum of Rs. 2 million (previous year Rs. 1 million) Vesting occurs upon completion of 5 years of service.
The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.
e) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
i) If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs. 3.11 million (increase by Rs. 3.38 million) [as at 31 March, 2017: decrease by Rs. 2.9 million (increase by Rs. 3.11 million)] [as at 1 April, 2016: decrease by Rs. 3.32 million (increase by Rs. 3.34 million)].
ii) If the expected salary growth increases (decreases) by 0.50%, the defined benefit obligation would increase by Rs. 3.04 million (decrease by Rs. 2.85 million) [as at 31 March, 2017: increase by Rs. 3.08 million (decrease by Rs. 2.90 million)] [as at 1 April, 2016: increase by Rs. 3.37 million (decrease by Rs. 3.43 million)].
"The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
f) The average duration of the benefit obligation represents average duration for active members at 31 March, 2018: 16.01 years (as at 31 March, 2017: 16.40 years; as at 1 April, 2016: 17.34 years).
g) The Company expects to make a contribution of Rs. 13.20 million (as at 31 March, 2017: Rs. 13.70 million; as at 1 April, 2016: Rs. 19.28 million) to the defined benefit plans during the next financial year.
h) The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.
i) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. j) The gratuity plan is unfunded.
k) Experience on actuarial gain/(loss) for benefit obligations :
36. Related Party Disclosures I. List of related parties
a. Related parties where control exists
i. Subsidiaries held directly
1 Den Mahendra Satellite Private Limited
2 Den Mod Max Cable Network Private Limited
3 DEN Krishna Cable TV Network Private Limited
4 DEN Pawan Cable Network Private Limited
5 DEN BCN Suncity Network Private Limited
6 DEN Harsh Mann Cable Network Private Limited
7 Den Classic Cable TV Services Private Limited
8 Den Bindra Network Private Limited
9 Den Ashu Cable Private Limited
10 Shree Siddhivinayak Cable Network Private Limited
11 Drashti Cable Network Private Limited
12 Den MCN Cable Network Private Limited
13 Mahadev Den Cable Network Private Limited
14 DEN Patel Entertainment Network Private Limited
15 Den Digital Cable Network Private Limited
16 DEN Malayalam Telenet Private Limited
17 Den-Manoranjan Satellite Private Limited
18 Den Supreme Satellite Vision Private Limited
19 Den Nashik City Cable Network Private Limited
20 Radiant Satellite (India) Private Limited
21 Den Radiant Satelite Cable Network Private Limited
22 Den Prince Network Private Limited
23 DEN Varun Cable Network Private Limited
24 DEN Crystal Vision Network Private Limited
25 Meerut Cable Network Private Limited
26 Den Jai Ambey Vision Cable Private Limited
27 Den Fateh Marketing Private Limited
28 Den Enjoy Cable Networks Private Limited
29 Den Maa Sharda Vision Cable Networks Private Limited
30 Den F K Cable TV Network Private Limited
31 Den Pradeep Cable Network Private Limited
32 Den Satellite Cable TV Network Private Limited
33 DEN Ambey Cable Networks Private Limited
34 Den Budaun Cable Network Private Limited
35 Den Aman Entertainment Private Limited
36 Den Kashi Cable Network Private Limited
37 Den Futuristic Cable Networks Private Limited
38 Den Rajkot City Communication Private Limited
39 Den Elgee Cable Vision Private Limited
40 Den Malabar Cable Vision Private Limited
41 Amogh Broad Band Services Private Limited
42 Galaxy Den Media & Entertainment Private Limited
43 Bali Den Cable Network Private Limited
44 Mahavir Den Entertainment Private Limited
45 Den Citi Channel Private Limited
46 Fab Den Network Private Limited
47 Fortune (Baroda) Network Private Limited
48 United Cable Network (Digital) Private Limited
49 Shri Ram Den Network Private Limited
50 Cab-i-Net Communications Private Limited
51 Den Sahyog Cable Network Private Limited
52 Den Sariga Communications Private Limited
53 Den Kattakada Telecasting and Cable Services Private Limited
54 Den A.F. Communication Private Limited
55 Sree Gokulam Starnet Communication Private Limited
56 Big Den Entertainment Private Limited
57 Ambika DEN Cable Network Private Limited
58 Den Steel City Cable Network Private Limited
59 Crystal Vision Media Private Limited
60 Victor Cable Tv Network Private Limited
61 Sanmati DEN Cable TV Network Private Limited
62 Multi-Channel Cable Network Private Limited
63 Gemini Cable Network Private Limited
64 Multi Star Cable Network Private Limited
65 DEN VM Magic Entertainment Private Limited
66 Antique Communications Private Limited
67 Sanmati Entertainment Private Limited
68 Disk Cable Network Private Limited
69 Silverline Television Network Private Limited
70 Ekta Entertainment Network Private Limited
71 Libra Cable Network Private Limited
72 Devine Cable Network Private Limited
73 Nectar Entertainment Private Limited
74 Pee Cee Cable Network Private Limited
75 Multitrack Cable Network Private Limited
76 Glimpse Communications Private Limited
77 Indradhanush Cable Network Private Limited
78 Adhunik Cable Network Private Limited
79 Blossom Entertainment Private Limited
80 Rose Entertainment Private Limited
81 Trident Entertainment Private Limited
82 Eminent Cable Network Private Limited
83 Mansion Cable Network Private Limited
84 Den Discovery Digital Network Private Limited
85 Jhankar Cable Network Private Limited
86 Den Premium Multilink Cable Network Private Limited
87 Desire Cable Network Private Limited
88 Marble Cable Network Private Limited
89 Augment Cable Network Private Limited
90 Macro Commerce Private Limited (Upto 5 June, 2017 and previously Joint venture upto 15 July, 2016)
91 DEN BROADBAND PRIVATE LIMITED (Formerly SKYNET CABLE NETWORK PRIVATE LIMITED)
92 VBS Digital Distribution Network Private Limited (w.e.f 5 January , 2018)
ii. Subsidiaries held indirectly
1 Den Saya Channel Network Private Limited
2 Den Ambey Citi Cable Network Private Limited
3 Den Enjoy Navaratan Network Private Limited
4 Den Ambey Jhansi Cable Network Private Limited
5 Den Deva Cable Network Private Limited
6 Den Faction Communication System Private Limited
7 Den Ambey Farukabad Cable Network Private Limited
8 Star Channel Den Network Private Limited
9 Kishna DEN Cable Networks Private Limited
10 Divya Drishti Den Cable Network Private Limited
11 Fun Cable Network Private Limited
12 Saturn Digital Cable Private Limited
13 DEN Enjoy SBNM Cable Network Private Limited
14 Bhadohi DEN Entertainment Private Limited
15 DEN STN Television Network Private Limited
16 Srishti DEN Networks Private Limited
17 Maitri Cable Network Private Limited
18 Melody Cable Network Private Limited
19 Mountain Cable Network Private Limited
20 Portrait Cable Network Private Limited
21 DEN Prayag Cable Networks Private Limited
22 Angel Cable Network Private Limited
23 ABC Cable Network Private Limited
24 DEN MTN Star Vision Networks Private Limited
b. Joint venture
1 Macro Commerce Private Limited (upto 15 July, 2016)
c. Associate entities
1 DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED) (upto 27 September, 2017)
2 DEN ADN Network Private Limited
3 CCN DEN Network Private Limited
4 Den Satellite Network Private Limited
d. Entities in which KMP can exercise significant influence
1 Lucid Systems Private Limited
2 Verve Engineering Private Limited
e. Key managerial personnel
1 Mr. Sameer Manchanda (Chairman and Managing Director)
2 Mr. S.N Sharma (Chief Executive Officer)
f. Other related party- employees welfare trust 1 DNL Employees Welfare Trust
ix. Amount recoverable from DNL Employees Welfare Trust as at 31 March, 2018: Rs. 0.36 million (As at 31 March, 2017: Rs. 0.36 million, As at 1 April, 2016: Rs. 0.36 million)
x. The Company has granted a corporate guarantee of Rs. Nil (As at 31 March, 2017: Rs. 250 million; As at 1 April, 2016: Rs. 250 million) for a term loan taken from bank by an associate company, Den Satellite Network Private Limited. The outstanding amount of the term loan as at the end of the year amounted to Nil (As at 31 March, 2017: Rs. 74.75 million, 1 April, 2016 : Rs. 121.33 million).
xi. Lucid Systems Private Limited (''LSPL'') has granted guarantee by way of pledge of 6.00 million (31 March, 2017 - 8.20 million, 1 April, 2016 - 5.50 million) equity shares held in the Company by LSPL for loans taken by the Company from a financial institution and banks. The outstanding amount of loans as at the end of the year aggregated to Rs. 1,180.75 million (As at 31 March, 2017: Rs. 1,202.73 million, 1 April, 2016 : Rs. 355.59 million).
37. Share Based payments
A. Employee Stock Option Plan 2010 ("ESOP 2010")
a) Details of the employee share option plan of the company
The weighted average fair value of the share options granted under ESOP 2010 during the financial year is Rs. 38.97 (during the year ended 31 March, 2017: Rs. 29.11). Options were priced using Black Scholes model.
The Company had established an Employee Stock Option Plan (ESOP 2010) in accordance with the "Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014" and "the Securities and Exchange Board of India (Share Based Employee Benefits) (Amendment) Regulation, 2015", which has been approved by the Board of Directors and the shareholders. A Nomination and Remuneration / Compensation Committee comprising majority of independent, nonexecutive members of the Board of Directors administers the ESOPs. All options under the ESOPs are exercisable for equity shares. The Company had taken approval of the Shareholders to grant and allot upto 5,219,599 equity options under the said scheme. The total outstanding options under the scheme are 482,500 equity options.
There shall be a minimum period of one year between the grant of options and vesting of options. The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant.
As per approval of the shareholder, the Company may issue options to employees of the Company/ subsidiaries/ directors of the subsidiaries.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the receipt of the option. The options carry neither rights to dividend nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
During the year ended 31 March, 2018, the Nomination and Remuneration/Compensation Committee has granted 100,000 options under Employee Stock Option Plan - 2010 to an eligible employee of the Company.
The following share based arrangements were in existence during the current and prior years :
B. Employee Stock Option Plan 2014 ("ESOP 2014")
a) Details of the employee share option plan of the company
The weighted average fair value of the share options granted under ESOP 2014 during the financial year is Rs. 20.75 (during the year ended 31 March, 2017: Rs. 57.03). Options were priced using Black Scholes model.
The shareholders of the Company vide shareholdersâ approval through postal ballot dated 5 January, 2015 had approved purchase upto 2.5% of paid-up equity share capital of the Company from the secondary market under the DEN ESOP Plan A- 2014. Further, the shareholders of the Company vide shareholdersâ approval through postal ballot dated 23 June, 2015, terminated the DEN ESOP Plan A- 2014 and allocated the same option under DEN ESOP Plan B -2014. After approval, the total number of equity shares under the DEN ESOP Plan B-2014 has increased to 8,909,990.
During the year ended 31 March, 2018, the Company had issued and allotted 1.75 million equity shares of Rs. 10 each to an eligible employee arising from exercise of ESOPs under the ''ESOP Plan 2014.
The Company has approved a share option scheme for the executives and senior employees of the Company and its subsidiaries.
The following share based arrangements were in existence during the current and prior years :
b) Fair value of share options granted in the year
The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant.
The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the Black-Scholes model with the following significant assumptions
e) Share options outstanding at the end of the year
The share options outstanding at the end of the year had remaining contractual life of 1 year (as at 31 March, 2017 is 1.39 years; as at 1 April, 2016 is 1.76 years).
38. Financial Instruments
a) Capital Management
The Company''s management reviews the capital structure of the Company on periodical basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The Company monitors the capital structure using gearing ratio which is determined as the proportion of net debt to total equity.
The capital structure of the Company consists of net debt (borrowings as detailed in notes 18, 16 and 20 and offset by cash and bank balances and current investments in notes 10, 12, 6 and 13) and total equity of the Company.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans
The funding requirements are met through a mixture of equity, internal fund generation, non-current and current borrowings.
The Company''s policy is to use non-current and current borrowings to meet anticipated funding requirements.
(c) Risk management framework
The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The objective of the Company''s risk management framework is to manage the above risks and aims to :
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- provide management with reliable information on the Company''s risk exposure
- improve financial returns
(i) Market risk
Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price. Market risk comprises of three types of risks - interest risk - See - 40 c (iv), foreign currency - See - refer 40 c (iii), and other price risk - See - 40 c (v), such as equity price risk.
The Company''s activities expose it primarily to interest rate risk, currency risk and other price risk such as equity price risk. The financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and other current financial liabilities.
(ii) Liquidity risk
The Company requires funds both for short-term operational needs as well as for long-term investment needs.
The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening the balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.
Interest rate sensitivity analysis on borrowings:
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company''s losses before tax for the year ended March 31, 2018 would increase/decrease by Rs. 4.65 million (year ended 31 March, 2017: Rs. 5.54 million). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.
Interest rate sensitivity analysis on fixed deposits:
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company''s losses before tax for the year ended 31 March, 2018 would decrease/increase by Rs. 1.44 million (year ended 31 March, 2017: Rs. 2.39 million). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.
(v) Other price risk
The Company is exposed to price risks arising from fair valuation of Company''s investment in mutual funds and preference shares. The investments in mutual fund are held for short term purposes. The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting year.
If prices had been 100 basis points higher/lower, loss before tax for the year ended 31 March, 2018 would decrease/increase by Rs. 5.30 million (for the year ended 31 March, 2017: Rs. 2.67 million) as a result of the changes in fair value of these investments which have been designated as at FVTPL.
39 During the year ended 31 March, 2018, the Nomination and Remuneration/Compensation Committee has granted 0.10 million options under Employee Stock Option Plan - 2010 to an eligible employee of the Company [Also see note 37A(a)]. Further, during the year ended 31 March, 2018, the Company had issued and allotted 1.75 million equity shares of Rs. 10 each to an eligible employee arising from exercise of ESOPs under the ''ESOP Plan 2014'' [Also see note 37B(d)].
40. During the financial year 2013-14, the Company had raised funds of Rs. 9,608.22 million by way of Qualified Institutional Placement (QIP) and Preferential Issue of Equity Shares. During the previous financial year, the Company had also raised Rs. 1,424.34 million by way of Preferential Issue of Equity Shares (see note 42 for details of preferential issue)
41. The Company has investments of Rs. 5,260.91 million (net of provision for impairment of Rs. 175.72 million) in subsidiary companies and associate companies as on 31 March, 2018. Of these, net worth of investments with carrying value of Rs. 2,361.50 million (net of provision for impairment of Rs. 175.70 million) and balances of loans and advances recoverable of Rs. 147.80 million as at 31 March, 2018 have fully/substantially eroded. Of these, investments aggregating to Rs. 175.80 million in companies whose net worth is fully/ substantially eroded have earned profits for the year ended 31 March, 2018. Based on the valuations as per discounted cash flow method, the management of the Company expects that these companies will have positive cash flows to adequately sustain its operations in the foreseeable future and therefore no further provision for impairment is considered necessary.
42. During the year ended 31 March, 2017, the Securities Issue Committee of the Board of Directors at its meeting held on 27 October, 2016 had issued and allotted 15,826,039 equity shares of Rs. 10 each at a premium of Rs. 80 per share to the affiliates of Goldman Sachs Group, Inc. who form part of the persons belonging to non-promoter category. With the aforesaid allotment, the holding of affiliates of the Goldman Sachs Group, Inc. had increased from 17.79% to 24.49%. The Company had received total allotment consideration of Rs. 1,424.34 million. The above issue was approved by shareholders in their Extraordinary general meeting dated 14 October, 2016.
43. Exceptional items comprises the following:
a. During the current year, the Company has sold its investment stake in Macro Commerce Private Limited (''MCPL'') (erstwhile subsidiary) which has resulted in loss on sale of investment of Rs. 18.82 million. In addition to the above, the Company has made an impairment allowance for loan given to MCPL amounting to Rs. 41.48 million.
b. During the current year, the Company has made an impairment allowance of Rs. 98.60 million on account of loan given to DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED.
c. During the year ended 31 March, 2017, the Company had made a provision for impairment of Rs. 248.42 million on investment in DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED) (''Delhi Sports'') on account of fair market value of equity shares of Delhi Sports. Further, during the year ended 31 March, 2017, the Company had decreased its investment stake in Delhi Sports by way of sale of 21,052,789 equity shares for a sale consideration of Rs. 80 million and booked a loss on sale of investment of Rs. 130.53 million. The total provision for impairment of Rs. 248.42 million and loss on sale of investment of Rs. 130.53 million for the year ended 31 March, 2017 had been disclosed as an exceptional item in the standalone Ind AS financial statements.
d. During the year ended 31 March, 2017, the Company had made a provision for impairment of Rs. 210.00 million on investment in Macro Commerce Private Limited (''MCPL''), erstwhile joint venture, on account of fair value of equity shares of MCPL and the same had been disclosed as an exceptional item in the standalone Ind AS financial statements.
e. During the year ended 31 March, 2017, the Company had incurred expenses of Rs. 43.33 million on account of separation pay paid to some employees as part of the organisational restructuring of the Company. The same had been disclosed as an exceptional item in the standalone Ind AS financial statements.
44. Expenditure on Corporate Social Responsibility (CSR)
a. Gross amount required to be spent by the Company during the period ended 31 March, 2018 is Rs. Nil (Previous year Rs. Nil).
b. Amount spent during the period ended 31 March, 2018:
/D, l»
Figures in bracket relates to previous year
c. Details of related party transactions:
- Contribution during the period ended 31 March, 2018 is Rs. Nil (Previous year Rs. Nil)
- Payable as at 31 March, 2018 is Rs. Nil (As at 31 March, 2017: Rs. Nil; As at 1 April, 2016: Rs. Nil)
45. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
48. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
49. The composite scheme of arrangement (''the Scheme'') amongst DEN NETWORKS LIMITED (''Company'') and DEN BROADBAND PRIVATE LIMITED (formerly SKYNET CABLE NETWORK PRIVATE LIMITED) (''DEN Broadband''), a wholly owned subsidiary, which entails transfer of the Internet Service Provider business ("Broadband") of the Company into DEN Broadband, became effective upon issuance of the National Company Law Tribunal, Principal Bench New Delhi order dated 15 September, 2017. The Company filed the said order with the Registrar of Companies, Delhi (''ROC'') on 22 September, 2017. In terms of the scheme, DEN Broadband shall settle to the Company an aggregate all-inclusive lump sum consideration of Rs. 40 million without values being assigned to individual assets and liabilities. The consideration has been settled by way of issuance of equity shares.
Pursuant to the Scheme, the Company has given effect to the demerger from the appointed date i.e. 1 April, 2016 and accordingly, the figures for the year ended 31 March, 2017 do not include the operations of Broadband business thereby decreasing the loss after tax by Rs. 405.06 million. Also, the same has been considered as discontinued operations from the appointed date.
In addition, the opening balance sheet as at 1 April, 2016 and the balance sheet as at 31 March, 2017 do not include the assets and liabilities of the demerged entity.
1. The composite scheme of arrangement (''Scheme'') involving amalgamation of 23 subsidiaries (held directly or indirectly) of the Company and demerger of cable business of Amogh Broadband Services Private Limited, a subsidiary of Company (collectively ''transferor companies'') into DEN FUTURISTIC CABLE NETWORK PRIVATE LIMITED (''the transferee company''), a wholly owned subsidiary of the Company became effective upon issuance of the order dated 16 August, 2017 by National Company Law Tribunal, Principal Bench New Delhi. The Company filed the said order with the Registrar of Companies, Delhi (''ROC'') on 28 August, 2017.
Pursuant to the Scheme becoming effective, the Company, the transferor companies and the transferee company have accounted for the arrangement with effect from the appointed date of 31 March, 2016, based on the accounting treatment prescribed in the scheme. Accordingly, the carrying value of the investment in these merged subsidiaries have been reduced by Rs 1,668.42 million as at 31 March, 2016 in the books of account of the Company and therefore, the figures as at 1 April, 2016 and 31 March, 2017 have been restated.
2. During the year ended 31 March, 2018, the Company has acquired 51% stake in VBS Digital Distribution Network Private Limited (''VBS''). Pursuant to this acquisition, VBS has become a subsidiary of the Company. Also, the Company has made a fresh investment of Rs. 14,78 million (3,919,485 equity shares) in DEN BROADBAND PRIVATE LIMITED (formerly SKYNET CABLE NETWORK PRIVATE LIMITED) at a price of Rs. 375 per equity share.
3. DEN Ambey Cable Networks Private Limited (''transferee Company''), a wholly owned subsidiary of the Company, has filed a composite Scheme of Arrangement ("the Scheme") with the National Company Law Tribunal (NCLT) in terms of the provisions of the Companies Act, 2013 for merger of its 8 subsidiaries with the transferee Company. The order of NCLT subsequent to this filing is awaited.
4. Full particulars of loans given, investment made, guarantees given, security provided together with purpose in terms of section 186
(4) of the Companies Act, 2013
5. a) During the current year, the Company entered into the following non-cash investing activities which are adjusted in the Statement of Cash Flows :
(i) Investment made by the Company in DEN BROADBAND PRIVATE LIMITED, a wholly owned subsidiary of the Company amounting to Rs. 1,469.81 million by conversion of loan amount during financial year 2016-17 and 2017-18.
b) Reconciliation of liabilities arising from financing activities
The table below details the changes in Company''s liabilities arising from financing activities, including both cash and non-cash
Effective 1 April, 2017, the Company adopted the amendment to Ind AS 7- Statement of Cash Flows, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non- cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement. The adoption of amendment did not have any impact on the standalone Ind AS financial statements.
6. The standalone Ind AS financial statements were approved for issue by the Board of Directors on 18 May, 2018.
Mar 31, 2017
1. Corporate information
DEN NETWORKS LIMITED (hereinafter referred to as âthe Companyâ or âDENâ) was incorporated in India on 10 July, 2007 and is primarily engaged in distribution of television channels through digital cable distribution network and provision of broadband services. The Company is having its registered office at 236, Okhla Industrial Area, Phase III, New Delhi -110020.
The Company changed its status from a Private Limited Company to a Public Limited Company on 15 April, 2008 thereby changing its name to DEN Digital Entertainment Networks Limited. Subsequently, the Company changed its name to DEN Networks Limited on 27 June, 2008. The equity shares of the Company are listed on two of the stock exchanges in India i.e NSE and BSE.
During the financial year 2013-14, the Company had raised funds of Rs. 9,608.22 million by way of Qualified Institutional Placement (QIP) and Preferential Issue of equity shares. Further, during the current year, the Company has also raised Rs. 1,424.34 million by way of Preferential Issue of equity shares.
The Company does not have any scheme of share based payments and hence the requirements of the amendment will not have any impact of the financial statements.
Notes :
i. Of the above 37,843,195 (31 March, 2016 31,923,370 ; as at 1 April, 2015 34,042,370) equity shares having carrying and investment value of Rs. 4,877.95 million (31 March, 2016 Rs. 4,472.41 million ; as at 1 April, 2015 Rs 4,493.60 million ) and Rs. 4,708.05 million (31 March, 2016 Rs. 4,302.51 million ; 1 April, 2015 Rs. 4,393.53 million) investments in subsidiaries are pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company (See note 18)
ii. Of the above 11,257,500 (31 March, 2016 11,257,500 ; 1 April, 2015 11,257,500) preference shares having carrying and investment value to Rs. 107.05 million ( 31 March, 2016 Rs. 94.54 million ; 1 April, 2015 Rs. 87.96 million ) and Rs. 142.58 million (31 March, 2016 142.58 million ; 1 April, 2015 142.58) of investments in subsidiaries are pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company (See note 18)
iii. Of the above 17,601,020 (31 March ,2016 9,373,622 ; as at 1 April, 2015 29,358,095 ) equity shares amounting to Rs. 277.43 million (31 March, 2016 Rs. 452.40 million ; 1 April, 2015 Rs. 554.73 million ) of investments in subsidiaries are committed to be pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company.
iv. Of the above 10,847,115 (31 March, 2016 13,517,115 ; as at 1 April, 2015 11,475,000) preference shares having carrying and investment value to Rs. 110.57 million (31 March, 2016 Rs. 118.37 million ; 1 April 2015 Rs. 69.30 million ) and Rs. 221.99 million (31 March, 2016 Rs. 221.99 million ; 1 April, 2015 Rs. 114.75 million) of investments in subsidiaries are committed to be pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company.
Notes:
a) The average credit period on sales of services is 90-180 days. No interest is charged on any overdue trade receivables.
b) The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows:
Of the above:
a. Fully paid equity shares, which have a par value of Rs. 10, carry one vote per share and carry a right to dividends.
b. 72,475,520 equity shares of Rs. 10 each were issued in 2009-10 as bonus shares in the ratio of 4:1 for every one equity share by utilisation of securities premium.
c. In 2009-10, the Company issued bonus shares for 39,993,000 .001% Cumulative Convertible Preference Shares of Rs. 10 each in the ratio of one share for every ten .001% Cumulative Convertible Preference Shares held by its shareholders by utilisation from the securities premium account resulting in total of 43,992,300 .001% Cumulative Convertible Preference Shares. These shares were subsequently converted into 13,361,361 fully paid up equity shares of Rs. 10 each in 2009-10.
d. 4,019,606 fully paid up equity shares of Rs. 10 each at premium of Rs. 185 were issued in 2009-10 against consideration payable towards investments made in subsidiary companies.
e. Share options granted under the Companyâs employee share option plan (See note 39)
As at 31 March, 2017 11,053,394 shares (As at 31 March, 2016 11,053,394 shares) were reserved for issuance as follows:
(i) 2,143,404 shares (As at 31 March, 2016 2,143,404 shares; As at 1 April, 2015 2,143,404 shares) of Rs. 10 each towards outstanding employee stock options granted under Employee Stock Option Plan 2010 and
(ii) 8,909,990 shares (As at 31 March, 2015 8,909,990 shares; As at 1 April, 2015 8,909,990 shares) of Rs. 10 each towards outstanding employee stock options granted under Employee Stock Option Plan-B 2014. (See Note 39).
g. The Company has one class of equity shares having a par value of Rs. 10 per share. Each equity shareholder is eligible for one vote per share held and dividend as and when declared by the Company. Interim Dividend is paid as and when declared by the Board. Final dividend is paid after obtaining shareholderâs approval. Dividends are paid in Indian Rupees. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount in proportion to their shareholding.
* The Company has paid advance towards the above claims aggregating to Rs. 314.48 million (31 March, 2016: Rs. 201.55 million; 1 April, 2015: Rs. 164.87 million).
** Against this corporate guarantee, the obligation outstanding as on 31 March, 2017 is Rs. 74.75 million (As at 31 March, 2016 - Rs. 121.33 million, As at 1 April, 2015 - Rs. 250 million).
*** The Company has undertaken to arrange for the necessary financial support to certain of its subsidiaries (held directly or indirectly) in the form of capital funding and/or short term funding for meeting their business requirements. [See note 38A(xvi)]
2. segment information
Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on the types of services provided. The CODM has identified Cable and Broadband as its reportable segments.
a) Cable segment consists of distribution and promotion of television channels.
b) Broadband segment consists of providing internet services.
Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant and equipment that is used interchangeably amongst segments is not allocated to segments.
3. Operating Lease
The Company has taken office premises and accommodation for its employee under cancellable operating lease agreements. The lease rental expenses recognised in the Statement of Profit and Loss:
4. Finance lease as lessee
The Company has entered into finance lease arrangements for certain equipment which provide the Company an option to purchase the assets at the end of the lease period. The averge lease term is 3 years.
Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 8.55% to 9% per annum (at 31 March, 2016 - 8.55% to 9% per annum, at 1 April, 2015 - 8.55% to 9% per annum).
5. Finance lease as lessor
The Company has entered into finance lease arrangements for certain of its equipment which provide the Company an option to sell the assets at the end of the lease period. Future minimum lease payment and reconciliation of gross investment in the lease and present value of minimum lease payments.
Unguaranteed residual values of assets leased under finance leases at the end of the reporting period are estimated at Rs. Nil (at 31 March, 2016 - Rs. Nil at 1 April, 2015 - Rs. Nil).
The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effective interest rate contracted is approximately 9% per annum (at 31 March, 2016 - 9% to 13% per annum, at 1 April, 2015 - 13% to 10% per annum)
6. Employee benefit plans
(i) Defined contribution plans
The Company operates defined contribution retirement benefit plans for all its qualifying employees. Where empoyees leave the plans prior to full vesting of the contributions, the contributions payable by the Company are reduced by the amount of forfeited contributions.
The total expense recognised in profit or loss of Rs. 37.43 million (for the year ended 31 March, 2016: Rs. 41.75 million) for provident fund contributions and Rs. 0.49 million (for the year ended 31 March, 2016: Rs. 0.59 million) for Employee State Insurance Scheme contributions represents contributions payable to these plans by the Company at rates specified in the rules of the plans. As at 31 March, 2017, contributions of Rs. 5.45 million (as at 31 March, 2016: Rs. 6.52 million) due in respect of 2016-2017 (2015-2016) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the respective reporting periods.
(ii) Defined benefit plans Gratuity plan
Gratuity liability arises on retirement, withdrawal, resignation, and death of an employee. The aforesaid liability is calculated on the basis of 15 days salary (i.e. last drawn salary plus dearness allowance) for each completed year of service or part thereof in excess of 6 months, subject to a maximum of Rs. 1,000,000. Vesting occurs upon completion of 5 years of service.
The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.
The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
No other post-retirement benefits are provided to these employees
In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out as at 31 March, 2017 by Charan Gupta Consultants Private Limited, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
a) The principal assumptions used for the purposes of the actuarial valuations were as follows.
The following tables set out the unfunded status of the defined benefit scheme and amounts recognised in the Company financial statements as at 31 March, 2017:
b) Amounts recognised in Statement of Profit and Loss in respect of these defined benefit plans are as follows:
The current service cost and the net interest expense for the year are included in the employee benefits expense line item in the Statement of Profit and loss.
The remeasurement of the net defined benefit liability is included in other comprehensive income.
c) The amount included in the balance sheet arising from the entityâs obligation in respect of its defined benefit plans is as follows.
d) Movements in the present value of the defined benefit obligation are as follows:
e) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
i) If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs. 3.26 million (increase by Rs. 3.50 million) [as at 31 March, 2016: decrease by Rs. 3.41 million (increase by Rs. 3.43 million)] [as at 1 April, 2015: decrease by Rs. 2.76 million (increase by Rs. 2.70 million)].
ii) If the expected salary growth increases (decreases) by 0.50%, the defined benefit obligation would increase by Rs. 3.48 million (decrease by Rs. 3.26 million) [as at 31 March, 2016: increase by Rs. 3.41 million (decrease by Rs. 3.47 million)] [as at 1 April, 2015: increase by Rs. 2.67 million (decrease by Rs. 2.78 million)].
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
f) The average duration of the benefit obligation represents average duration for active members at 31 March, 2017: 17.66 years (as at 31 March, 2016: 17.34 years; as at 1 April, 2015: 16.90 years).
g) The Company expects to make a contribution of Rs. 16.14 million (as at 31 March, 2016: Rs. 19.28 million; as at 1 April, 2015: Rs. 15.44 million) to the defined benefit plans during the next financial year.
h) The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.
i) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
j) The gratuity plan is unfunded.
k) Experience on actuarial gain/(loss) for benefit obligations and plan assets:
7. Related Party Disclosures I. List of related parties
a. Related parties where control exists
i. Subsidiaries held directly
1 Den Mahendra Satellite Private Limited
2 Den Mod Max Cable Network Private Limited
3 DEN Krishna Cable TV Network Private Limited
4 DEN Pawan Cable Network Private Limited
5 DEN BCN Suncity Network Private Limited
6 DEN Harsh Mann Cable Network Private Limited
7 Den Classic Cable TV Services Private Limited
8 Den Bindra Network Private Limited
9 Den Montooshah Network Private Limited
10 Den Ashu Cable Private Limited
11 Shree Siddhivinayak Cable Network Private Limited
12 Drashti Cable Network Private Limited
13 Den MCN Cable Network Private Limited
14 Mahadev Den Network Private Limited
15 Mahadev Den Cable Network Private Limited
16 DEN Patel Entertainment Network Private Limited
17 Den Digital Cable Network Private Limited
18 DEN Malayalam Telenet Private Limited
19 Den Bellary City Cable Private Limited
20 Den-Manoranjan Satellite Private Limited
21 Den Supreme Satellite Vision Private Limited
22 Den Nashik City Cable Network Private Limited
23 Radiant Satellite (India) Private Limited
24 Den Radiant Satelite Cable Network Private Limited
25 Den Mewar Rajdev Cable Network Private Limited
26 Den RIS Cable Network Private Limited
27 Den Sky Media Network Private Limited
28 Den Prince Network Private Limited
29 DEN Varun Cable Network Private Limited
30 DEN Crystal Vision Network Private Limited
31 Meerut Cable Network Private Limited
32 Den Jai Ambey Vision Cable Private Limited
33 Den Fateh Marketing Private Limited
34 Den Enjoy Cable Networks Private Limited
35 Den Maa Sharda Vision Cable Networks Private Limited
36 Den F K Cable TV Network Private Limited
37 Den Shiva Cable Network Private Limited
38 Den Pradeep Cable Network Private Limited
39 Den Satellite Cable TV Network Private Limited
40 Den Narmada Network Private Limited
41 DEN Ambey Cable Networks Private Limited
42 Den Budaun Cable Network Private Limited
43 Den Aman Entertainment Private Limited
44 Den Kashi Cable Network Private Limited
45 Den Futuristic Cable Networks Private Limited
46 DEN Digital Entertainment Gujarat Private Limited
47 Aster Entertainment Private Limited
48 Den Entertainment Network Private Limited
49 Shine Cable Network Private Limited
50 Den Rajkot City Communication Private Limited
51 Den Elgee Cable Vision Private Limited
52 Den Malabar Cable Vision Private Limited
53 Amogh Broad Band Services Private Limited
54 Galaxy Den Media & Entertainment Private Limited
55 Den Ucn Network India Private Limited
56 Bali Den Cable Network Private Limited
57 Mahavir Den Entertainment Private Limited
58 Den Citi Channel Private Limited
59 Fab Den Network Private Limited
60 Fortune (Baroda) Network Private Limited
61 Den Infoking Channel Entertainers Private Limited
62 United Cable Network (Digital) Private Limited
63 Shri Ram Den Network Private Limited
64 Den Krishna Vision Private Limited
65 Cab-i-Net Communications Private Limited
66 Den Sahyog Cable Network Private Limited
67 Den Sariga Communications Private Limited
68 DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED) (upto 30 March, 2016)
69 Den Kattakada Telecasting and Cable Services Private Limited
70 Den A.F. Communication Private Limited
71 Sree Gokulam Starnet Communication Private Limited
72 Big Den Entertainment Private Limited
73 Ambika DEN Cable Network Private Limited
74 Den Steel City Cable Network Private Limited
75 Crystal Vision Media Private Limited
76 Victor Cable Tv Network Private Limited
77 Sanmati DEN Cable TV Network Private Limited
78 Multi Channel Cable Network Private Limited
79 Gemini Cable Network Private Limited
80 Multi Star Cable Network Private Limited
81 DEN VM Magic Entertainment Private Limited
82 Matrix Cable Network Private Limited
83 Antique Communications Private Limited
84 Sanmati Entertainment Private Limited
85 Disk Cable Network Private Limited
86 Shaakumbari Den Media Private Limited
87 Silverline Television Network Private Limited
88 Ekta Entertainment Network Private Limited
89 Libra Cable Network Private Limited
90 Devine Cable Network Private Limited
91 Nectar Entertainment Private Limited
92 Pee Cee Cable Network Private Limited
93 Multitrack Cable Network Private Limited
94 Glimpse Communications Private Limited
95 Indradhanush Cable Network Private Limited
96 Adhunik Cable Network Private Limited
97 Blossom Entertainment Private Limited
98 Rose Entertainment Private Limited
99 Trident Entertainment Private Limited
100 Eminent Cable Network Private Limited
101 Mansion Cable Network Private Limited
102 Den Discovery Digital Network Private Limited
103 Jhankar Cable Network Private Limited
104 Den Premium Multilink Cable Network Private Limited
105 Scorpio Cable Network Private Limited
106 Desire Cable Network Private Limited
107 Marble Cable Network Private Limited
108 Augment Cable Network Private Limited
109 Macro Commerce Private Limited (w.e.f. 16 July, 2016)
110 Skynet Cable Network Private Limited (w.e.f. 1 April, 2016)
ii. subsidiaries held indirectly
1 Astonishing Network Private limited (formerly known as Den Nanak Communication Private Limited)
2 Den Saya Channel Network Private Limited
3 Den Ambey Citi Cable Network Private Limited
4 Den Enjoy Navaratan Network Private Limited
5 Den Ambey Jhansi Cable Network Private Limited
6 Den Deva Cable Network Private Limited
7 Den Faction Communication System Private Limited
8 Den Ambey Farukabad Cable Network Private Limited
9 Star Channel Den Network Private Limited
10 Kishna DEN Cable Networks Private Limited
11 Divya Drishti Den Cable Network Private Limited
12 Delhi Soccer Private Limited (formerly known as DEN SOCCER PRIVATE LIMITED) upto 30 March, 2016
13 Fun Cable Network Private Limited
14 Rajasthan Entertainment Private Limited
15 Kerela Entertainment Private Limited
16 Uttar Pradesh Digital Cable Network Private Limited
17 Saturn Digital Cable Private Limited
18 DEN Enjoy SBNM Cable Network Private Limited
19 Capital Entertainment Private Limited
20 Bhadohi DEN Entertainment Private Limited
21 DEN STN Television Network Private Limited
22 Srishti DEN Networks Private Limited
23 Maitri Cable Network Private Limited
24 Melody Cable Network Private Limited
25 Mountain Cable Network Private Limited
26 Portrait Cable Network Private Limited
27 DEN Prayag Cable Networks Private Limited
28 Angel Cable Network Private Limited
29 ABC Cable Network Private Limited
30 DEN MTN Star Vision Networks Private Limited
b. Joint ventures
1 Star Den Media Services Private Limited (upto 30 March, 2016)
2 Media Pro Enterprise India Private Limited (upto 30 March, 2016)
3 Macro Commerce Private Limited (upto 15 July, 2016)
c. Associate entities
1 DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED)
2 DEN ADN Network Private Limited
3 CCN DEN Network Private Limited
4 Den Satellite Network Private Limited
d. Entities in which KMP can exercise significant influence
1 Lucid Systems Private Limited
2 Verve Engineering Private Limited
e. Key managerial personnel
1 Mr. Sameer Manchanda (Chairman and Managing Director)
2 Mr. S.N Sharma (Chief Executive Officer)
f. Other related party- employees welfare trust
1 DNL Employees Welfare Trust
i. Transactions/Outstanding balances with related parties during the year
ii. Amount recoverable from DNL Employees Welfare Trust as at 31 March, 2017: Rs. 0.36 million (As at 31 March, 2016: Rs. 0.36 million; As at 1 April, 2015: Rs. 0.36 million)
iii. Guarantee given by the Company for a term loan taken from bank by an associate Company, Den Satellite Network Private Limited outstanding as at the end of the year amounted to Rs. 250 million [As at 31 March, 2016: Rs. 250 million; As at 1 April, 2015: Rs. 250 million].
iv. Lucid Systems Private Limited (âLSPLâ) has given guarantee by way of pledge of 8.20 million (previous year - 5.50 million) equity shares held in the Company for credit facilities availed by the Company on loans taken from a financial institution / bank during the year ended 31 March, 2017 and 31 March, 2016.
v. Mr. Sameer Manchanda (Chairman and Managing Director of the Company) had extended guarantee for a term loan as at 31 March, 2017: Rs. Nil (As at 31 March, 2016: Rs. Nil; As at 1 April, 2015: Rs. 184.88 million) borrowed from a bank by a subsidiary Company.
8. share Based payments
A. Employee stock Option Plan 2010 (âEsOP 2010â)
a) Details of the employee share option plan of the company
The weighted average fair value of the share options granted under ESOP 2010 during the financial year is Rs. 29.11 (during the year ended 31 March, 2016: Rs. 29.34). Options were priced using Black Scholes model
The Company had established an Employee Stock Option Plan (ESOP 2010) in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, which has been approved by the Board of Directors and the shareholders. A Nomination and Remuneration / Compensation Committee comprising majority of independent, non-executive members of the Board of Directors administers the ESOPs. All option under the ESOPs are exercisable for equity shares. The Company had taken approval of the Shareholders to grant and allot upto 5,219,599 equity options under the said scheme. The total outstanding options under the scheme are 850,000 equity options.
There shall be a minimum period of one year between the grant of options and vesting of options. The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant.
As per approval of the shareholder, the Company may issue options to employees of the Company/ subsidiaries/ directors of the subsidiaries.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the receipt of the option. The options carry neither rights to dividend nor voting rights. Options may be exercised at any time fform the date of vesting to the date of their expiry.
All options vested on their date of grant and expiry within twelve months of their issue, or one month after the resignation of the executive or senior employee, whichever is earlier.
b) Fair value of share options granted in the year
The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant. The Company has granted 3,926,195 options upto 31 March, 2017.
The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the Black-Scholes model with the following significant assumptions:
The volatility of the options is based on the historical volatility of the share price since the Companyâs equity shares are publicly traded, which may be shorter than the term of the options.
c) Movement in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year :
d) Share options outstanding at the end of the year
The share options outstanding at the end of the year had remaining contractual life of 1.26 years (as at 31 March, 2016 is 2.21 years; as at 1 April, 2015 is 3.19 years).
B. Employee Stock Option Plan 2014 (âESOP 2014â)
a) Details of the employee share option plan of the company
The weighted average fair value of the share options granted under ESOP 2014 during the financial year is Rs. 57.03 (during the year ended 31 March, 2016: Rs. 30.61). Options were priced using Black Scholes model.
The shareholders of the Company vide shareholders approval through postal ballot dated 5 January, 2015 had approved purchase upto 2.5% of paid-up equity share capital of the Company from the secondary market under the DEN ESOP Plan A- 2014. Further, the shareholders of the Company vide shareholders approval through postal ballot dated 23 June, 2015, terminated the DEN ESOP Plan A- 2014 and allocated the same option under DEN ESOP Plan B -2014. After approval, the total number of equity shares under the DEN ESOP Plan B-2014 has increased to 8,909,990.
During the year, the Nomination and Remuneration / Compensation Committee of the Company, had granted 1,750,000 options under this Scheme to eligible employees. Total outstanding options under DEN ESOP Plan-B 2014 are 2,950,000. The vesting period of 1,750,000 options is 2 years and for the rest of the options it is 4 years.
The Company has a share option scheme for executives and senior employees of the Company and its subsidiaries. In accordance with the term of the plan, as approved by shareholders at a previous annual general meeting, executives and senior employees with more than five years service with the Company may be granted options for purchase equity shares.
Each employee share option converts into one equity share of the company on exercise. No amounts are paid or payable by the receipt of the option. The options carry neither rights to dividend nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
All options vested on their date of grant and expiry within twelve months of their issue, or one month after the resignation of the executive or senior employee, whichever is earlier.
b) Fair value of share options granted in the year
The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant.
The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the Black-Scholes model with the following significant assumptions
c) Movement in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year :
d) share options outstanding at the end of the year
The share options outstanding at the end of the year had remaining contractual life of 1.39 years (as at 31 March, 2016 is 1.76 years; as at 1 April, 2015 is 2.19 years).
9. Financial Instruments
a) Capital Management
The Companyâs management reviews the capital structure of the Company on periodical basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The Company has a target gearing ratio of 18% - 25% determined as the proportion of net debt to total equity. The gearing ratio at 31 March, 2017 of 19.73% (see below) was within the target range.
The capital structure of the Company consists of net debt (borrowings as detailed in notes 18, 20 and 22 and offset by cash and bank balances and current investments in notes 14, 15 and 12) and total equity of the Company.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans.
The funding requirements are met through a mixture of equity, internal fund generation, non-current and current borrowings. The Companyâs policy is to use non-current and current borrowings to meet anticipated funding requirements.
b) Financial risk management objective and policies Financial assets and liabilities:
The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:
c) Risk management framework
The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The objective of the Companyâs risk management framework is to manage the above risks and aims to :
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- provide management with reliable information on the Companyâs risk exposure
- improve financial returns
(i) Market risk
Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price. Market risk comprises of three types of risks - interest risk - See - 40 c (iv), foreign currency - See - refer 40 c (iii), and other price risk - See - 40 c (v), such as equity price risk.
The Companyâs activities expose it primarliy to interest rate risk, currency risk and other price risk such as equity price risk. The financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and other current financial liabilities.
(ii) Liquidity risk
The Company requires funds both for short-term operational needs as well as for long-term investment needs.
The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening the balance sheet. The maturity profile of the Companyâs financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.
(iii) Foreign currency risk
Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statements of Profit and Loss. As at the year end, the Company was exposed to foreign exchange risk arising from foreign currency payables and buyerâs credit denominated in foreign currency availed by the Company.
The carrying amounts of the Company foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows :
The results of Companyâs operations may be affected by fluctuations in the exchange rates between the Indian Rupee against the US dollar. The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 1% against the functional currency of the Company.
For the year ended 31 March, 2017 and 31 March, 2016, every 100 basis points depreciation/ appreciation in the exchange rate between the Indian rupee and U.S. dollar will decrease/increase the Companyâs losses before tax by Rs. 14.71 million (31 March, 2016 : Rs. 38.01 million).
(iv) Interest rate risk
The Company is exposed to interest rate risk on current and non-current borrowings and fixed deposits outstanding as at the year end. The Companyâs policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees. The US dollar debt representing the buyers credit facility availed by the Company is composite of fixed and floating rates (linked to US dollar LIBOR). These exposures are reviewed by appropriate levels of management on a monthly basis. The Company invests in fixed deposits to achieve the Companyâs goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.
Interest rate sensitivity analysis on borrowings:
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Companyâs losses before tax for the year ended March 31, 2017 would decrease/increase by Rs. 6.01 million (year ended 31 March, 2016 : Rs. 6.98 million). This is mainly attributable to the Companyâs exposure to interest rates on its variable rate borrowings.
Interest rate sensitivity analysis on fixed deposits:
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Companyâs losses before tax for the year ended 31 March, 2017 would decrease/increase by Rs. 2.39 million (year ended 31 March, 2016 : Rs. 4.39 million). This is mainly attributable to the Companyâs exposure to interest rates on its variable rate borrowings.
(v) Other price risk
The Company is exposed to price risks arising from fair valuation of Companyâs investment in mutual funds and preference shares. These investments are held for short term purposes. The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting year.
If prices had been 100 basis points higher/lower, loss before tax for the year ended 31 March, 2017 would increase/decrease by Rs. 2.67 million (for the year ended 31 March, 2016: Rs. 2.43 million) as a result of the changes in fair value of these investments which have been designated as at FVTPL.
(vi) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Companyâs exposure to credit risk primarly arises from trade receivables, balances with banks and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good credit ratings. Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Companyâs policies on assessing expected credit losses is detailed in notes to accounting policies (See note 2.12). For details of exposure, default grading and expected credit loss as on the reporting year (See note 13).
10. During the year, post receipt of approval from the Central Government, the managerial remuneration of Rs. 7.25 million paid during the year ended 31 March, 2016, in excess of the limits prescribed under Section 197 read with Schedule V and applicable rules of the Companies Act, 2013, was adjusted with the remuneration to be paid/provided for the year ended 31 March 2017.
11. During the financial year 2013-14, the Company had raised funds of Rs. 9,608.22 million by way of Qualified Institutional Placement (QIP) and Preferential Issue of Equity Shares. Further, during the current financial year, the Company has also raised Rs. 1,424.34 million by way of Preferential Issue of Equity Shares (See note 44 for details of Preferential Issue).
12. The Company has investments of Rs. 5,387.88 million (net of provision for impairment of Rs. 736.43 million) in subsidiary companies and associate companies as on 31 March, 2017. Of these, networth of investments with carrying value of Rs. 763.30 million (net of provision for impairment of Rs. 593.30 million) and balances of loans/advances of Rs. 21.90 million as at 31 March, 2017 has fully/ substantially eroded. Of these, investments aggregating to Rs. 103.70 million in companies whose net worth is fully/substantially eroded have earned profits for the year ended 31 March, 2017. Based on the valuations as per discounted cash flow method, the management of the Company expects that these companies will have positive cash flows to adequately sustain its operations in the foreseeable future and therefore no further provision for impairment is considered necessary.
13. During the year ended 31 March, 2017, the Securities Issue Committee of the Board of Directors at its meeting held on 27 October, 2016 has issued and allotted 15,826,039 equity shares of Rs. 10 each at a premium of Rs. 80 per share to the affiliates of Goldman Sachs Group, Inc. who form part of the persons belonging to Non Promoter category. With the aforesaid allotment, the holding of affiliates of the Goldman Sachs Group, Inc. has increased from 17.79% to 24.49%. The Company has received total allotment consideration of Rs. 1,424.34 million. The above issue was approved by shareholders in their Extraordinary general meeting dated 14 October, 2016.
45. Exceptional items comprises the following:
a. During the year ended 31 March, 2017, the Company has made a provision for impairment of Rs. 248.42 million on investment in DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED) (âDelhi Sportsâ) on account of fair market value of equity shares of Delhi Sports. Further, during the year ended 31 March, 2017, the Company has decreased its investment stake in Delhi Sports by way of sale of 21,052,789 equity shares for a sale consideration of Rs. 80 million and booked a loss on sale of investment of Rs. 130.53 million. The total provision for impairment of Rs. 248.42 million and loss on sale of investment of Rs. 130.53 million for the year ended 31 March, 2017 has been disclosed as an exceptional item in the Ind AS financial statements.
b. During the year ended 31 March, 2017, the Company had made a provision for impairment of Rs. 210.00 million on investment in Macro Commerce Private Limited (âMCPLâ), erstwhile joint venture, on account of fair value of equity shares of MCPL and the same has been disclosed as an exceptional item in the Ind AS financial statements.
c. During the year ended 31 March, 2017, the Company has incurred expenses of Rs. 56.63 million on account of separation pay paid to some employees as part of the organisational restructuring of the Company. The same has been disclosed as an exceptional item in the Ind AS financial statements.
d. Allowance for doubtful debts of Digital Addressable System customers of Rs. 637.43 million. Pursuant to TRAI notification, Digital Addressable System (DAS) was implemented in a phased manner in select cities / towns in FY 2012-13 and FY 2013-14. The Company had not been able to finalise the agreements with distributors/ Local Cable operators for DAS areas and hence revenues were accounted for on a best estimate basis. Based on current market trends of DAS rates and discussions/ negotiations with trade partners, the Company had made an assessment of its trade receivables of debtors pertaining to DAS areas and had accordingly made an allowance of doubtful debts of Rs. 637.43 million during the year ended 31 March, 2016.
e. Provision for impairment of investments in subsidiaries for the year ended 31 March, 2016: Rs. 234.37 million.
f. During the year ended 31 March, 2016, the Company had sold its entire 50% stake in Star Den Media Services Private Limited (âStar Denâ) for a sales consideration of Rs. 403.50 million which had resulted in a net profit of Rs. 378.50 million and the same was disclosed as an exceptional item in the Ind AS financial statements.
g. During the year ended 31 March, 2016, profit on disposal of investments in joint venture has been netted off from the charge on account of provision for doubtful trade receivables and provision for other than temporary diminution in value of investments to arrive at a net exceptional item charge of Rs. 493.30 million.
14. Expenditure on Corporate Social Responsibility (CSR)
a. Gross amount required to be spent by the Company during the period ended 31 March, 2017 is Rs. Nil (Previous year Rs. Nil)
b. Amount spent during the period ended 31 March, 2017
Figures in bracket relates to previous year.
c. Details of related party transactions:
- Contribution during the period ended 31 March, 2017 is Rs. Nil (Previous year Rs. Nil)
- Payable as at 31 March, 2017 is Rs. Nil (Previous year Rs. Nil)
15. The Company did not have any long-term contracts including derivative contracts for which there were any material forseeable losses.
16. Fair value measurement
i). Financial assets and financial liabilities that are not measured at fair value are as under:
Note :
The carrying value of the above financial assets and financial liabilities carried at amortised cost approximate these fair value.
ii) Fair value hierarchy of assets measured at fair value as at 31 March, 2017; 31 March, 2016 and 1 April, 2015 is as follows:
Notes to the reconciliation items:
(a) Investments in preference shares of subsidiaries
Under previous GAAP, the entity accounted for investments in preference shares of subsidiaries at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the entity accounts for such investments as FVTPL investments. As required by Ind AS, these FVTPL investments have been measured at fair value with gains and losses recognised in Statement of Profit and Loss. At the date of transition to Ind AS, difference between the instruments fair value and previous GAAP carrying amount has been recognised as deemed equity investment and included within the respective equity investment in subsidiaries.
(b) Current investments in mutual funds
Under Ind AS, the entity accounts for such investments as FVTPL investments. As required by Ind AS, these FVTPL investments have been measured at fair value with gains and losses recognised in Statement of Profit and Loss. At the date of transition to Ind AS, difference between the instruments fair value and previous GAAP carrying amount has been adjusted in opening reserves.
(c) Borrowings and security deposits at amortised cost method
Under previous GAAP, Borrowings (liabilities) and security deposits (assets) were accounted for at their undiscounted nominal values. Under IndAS, these have been accounted for at amortised cost method by discounting the cash flows using effective interest rates. Accordingly, loan processing fees has been netted with borrowings to reflect the amortised cost using effective interest rate. Consequently, the changes in balances of security deposits and the effect of interest income under amortised cost method has resulted in changes in cash flows from operating and investing activities in the cash flow statement.
(d) Deferment of activation revenue
Under previous GAAP, the activation revenue on Set top boxes (STBs) was recognised fully in the year of activation. Under Ind AS, activation revenue on STBs is recognised over the period of customer relationship. Activation fees received in advance is accounted for as âDeferred Revenueâ and grouped under âOther current liabilitiesâ and âOther non-current liabilitiesâ Deferred revenue calculated as at the opening balance sheet date has been adjusted against opening reserves.
(e) Fair valuation of ESOP
Under previous GAAP, the cost of equity settled employee share-based payments was recognised using the intrinsic value method. Under Ind AS, the cost of equity-settled employee share-based payments are recognised based on grant date fair value of options. Accordingly, the incremental difference between fair value and intrinsic value of options has been accounted for as employee benefit expenses. The opening impact of this difference has been adjusted in the opening reserves.
(f) Gain/loss on re-measurement of net defined benefit liability
Under previous GAAP, there was no concept of other comprehensive income and actuarial gains and losses were accounted for in Statement of Profit and Loss. Under Ind As, actuarial gain or losses are accounted for as other comprehensive income.
(g) Trade receivables
Under previous GAAP, the entity determined provisions for impairment of trade receivables (provision for bad and doubtful debts) using incurred loss model. i.e. if they remained outstanding over the prescribed period. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL), which has resulted in additional provisions being accounted for profit and loss. The impact of additional provisions due to ECL as at the opening balance sheet date has been adjusted in opening retained earnings.
(h) Subsidiaries
Under previous GAAP, the Company had accounted for 3 entities as subsidiaries. However, as per the control definition in Ind AS, these entities have been accounted for as associates under Ind AS.â
(i) Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income expense, gains, or losses are required to be presented in other comprehensive income.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
17. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
18. The Board of Directors of the Company in its meeting held on 5 September, 2016 considered and approved a Scheme of Arrangement (âthe Schemeâ) amongst DEN NETWORKS LIMITED (âCompanyâ) and SKYNET CABLE NETWORK PRIVATE LIMITED (âSKYNETâ), a wholly owned subsidiary, in terms of provisions of sections 391 to 394 of the Companies Act, 1956. With effect from the Appointed date i.e. 1 April, 2016, the Internet Service Provider business (âBroadbandâ) of the Company will be demerged into SKYNET. The Company has received No-objection/observation letter (âNOCâ) from the Stock Exchanges in terms of Regulation 37 of the SEBI (Listing obligations and Disclosure Requirements) Regulation 2015. Subsequent to said NOC, the Company has filed the scheme with the National Company Law Tribunal. The scheme has been approved by shareholders and unsecured creditors of the Company. Further, the scheme is subject to all other statutory approvals.
19. DEN FUTURISTIC CABLE NETWORK PRIVATE LIMITED (âTransfereeâ), a wholly owned subsidiary of the Company, has filed a composite Scheme of Arrangement (âthe Schemeâ) with the National Company Law Tribunal (NCLT) in terms of the provisions of the Companies Act, 2013 for merger of 23 Subsidiaries and demerger of Cable Business of one subsidiary with the transferee company. The order of NCLT subsequent to this filing is awaited.
20. The financial statements were approved for issue by the Board of Directors on 22 May, 2017.
Mar 31, 2016
1. FINANCE LEASE AS LESSOR
The Company has entered into finance lease arrangements for certain equipment which provide the Company an option to sell the assets at the end of the lease period.
Future minimum lease payments and reconciliation of gross investment in the lease and present value of minimum lease payments.
2. DISCLOSURES AS PER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT (MSMED) ACT, 2006
As per information available with the management, the balance due to enterprises covered under the MSMED Act, 2006 is Rs. Nil (Previous year Rs. Nil) and no interest has been paid or is payable under the terms of the MSMED Act, 2006. This has been relied upon by the auditors.
3. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD 15 (REVISED 2005) ON âEMPLOYEE BENEFITSâ
(I) Defined contribution plans
The Company makes provident fund contribution which is a defined contribution plan for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The Company recognized Rs. 41.75 million (Previous year Rs. 26.53 million) for provident fund contributions and Rs. 0.59 million (Previous year Rs. 0.83 million) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules to the scheme.
The contribution payable by the Company is at the rates specified in the rules to the plans.
(II) Defined benefit plan Gratuity plan
Gratuity liability arises on retirement, withdrawal, resignation, and death of an employee. The aforesaid liability is calculated on the basis of 15 days salary (i.e. last drawn salary plus dearness allowance) for each completed year of service or part thereof in excess of 6 months, subject to a maximum of Rs. 1,000,000. Vesting occurs upon completion of 5 years of service.
The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.
The following tables set out the unfunded status of the defined benefit scheme and amounts recognized in the Company financial statements as at 31 March, 2016:
Notes:
a. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.
b. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
c. The gratuity plan is unfunded.
4. EMPLOYEE STOCK OPTION PLAN 2010 (âESOP 2010â)
a. The Company had established an Employee Stock Option Plan (ESOP 2010) in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, which has been approved by the Board of Directors and the shareholders. A Nomination and Remuneration / Compensation Committee comprising majority of independent, non-executive members of the Board of Directors administers the ESOPs. All option under the ESOPs are exercisable for equity shares. The Company had taken approval of the Shareholders to grant and allot up-to 5,219,599 equity options under the said scheme. The total outstanding options under the scheme are 1,680,000 which were granted in last financial year.
b. There shall be a minimum period of one year between the grant of options and vesting of options. The vesting period may extend up to three years. The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant. The Company has granted 4,756,195 options up to 31st March, 2016.
c. The movement in the scheme is set out as under:
5. The Company has investments of Rs. 6,126.75 million in subsidiary companies, joint venture and associate companies. Of these, the Company has investment of Rs. 825.60 million (net of provision for other than temporary diminution in the value of investments) and has balances of loans/advances of Rs. 28.20 million in various subsidiary companies whose net worth as at 31 March, 2016 has fully/substantially eroded. Of these, investments aggregating to Rs. 72.90 million in companies whose net worth is fully/substantially eroded have earned profits for the year ended 31 March, 2016. The management of the Company expects that these subsidiary companies will have positive cash flows to adequately sustain its operations in the foreseeable future. Having regard to the long term investment and strategic involvement no further provision is considered necessary for other than temporary diminution in the value of these investments.
6. Pursuant to TRAI notification, Digital Addressable System (DAS) was implemented in the metropolitan cities of the country in phase I, Phase 2 and Phase 3 cities effective 1 November, 2012, 1 April, 2013 and 1 January, 2016 respectively. The Company has not been able to finalize subscription rates / agreements with Distributors / Local Cable Operators (LCOs) in notified cities. Pending finalization of agreements, the Company has recognized subscription income on estimates based on market trends and negotiations with LCOs. Based on its review of such estimates on a regular basis management is of the view that any change arising in the subscription fee once finalized will not have significant impact on the revenue of the Company for the current period/year.
7. Exceptional items comprises the following:
a. Provision for doubtful trade receivables of Digital Addressable System customers of Rs. 637.43 million. Pursuant to TRAI notification, Digital Addressable System (DAS) was implemented in a phased manner in select cities / towns in F.Y 2012-13 and F.Y 2013-14. The Company had not been able to finalize the agreements with distributors/ Local Cable operators for DAS areas and hence revenues were accounted for on a best estimate basis. Based on current market trends of DAS rates and discussions/negotiations with trade partners, the Company has made an assessment of its trade receivables pertaining to DAS areas and has accordingly made a provision of doubtful trade receivables of Rs. 637.43 million.
b. Provision for other than temporary diminution in value of investments in subsidiary companies : Rs. 234.37 million.
c. During the current year, the Company has sold its entire 50% stake in Star Den Media Services Private Limited (âStar Den) for a sales consideration of Rs. 403.50 million which has resulted in a net profit of Rs. 378.50 million and the same is disclosed as an exceptional item in the standalone financial statements.
d. Profit from disposal of investments has been netted off from the charge on account of provision for doubtful trade receivables and provision for other than temporary diminution in value of investments to arrive at a net exceptional item charge of Rs. 493.30 million.
8. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.
Consequent to the change arising from the assessment of the useful lives of certain assets as above:
i. The Company had fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and had adjusted an amount of Rs. 12.03 million against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.
ii. As a result the net depreciation charge was higher by Rs. 4.17 million.
9. Expenditure on Corporate Social Responsibility (CSR)
a. Gross amount required to be spent by the Company during the period ended 31 March, 2016 is Rs. Nil (Previous year Rs. 5.60 million)
Figures in bracket relates to previous year
c. Details of related party transactions:
- Contribution during the period ended 31 March, 2016 is Rs. Nil (Previous year Rs. Nil)
- Payable as at 31 March, 2016 is Rs. Nil (Previous year Rs. Nil)
10. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
11. Previous yearâs figures have been regrouped/ reclassified wherever necessary to correspond with the current yearâs classification/ disclosure.
Mar 31, 2015
1. BACKGROUND
DEN Networks Limited (hereinafter referred to as 'the Company' or
'DEN') was incorporated on 10 July 2007 and is engaged in distribution
of television channels through analog and digital cable distribution
network and provision of broadband services.
The Company changed its status from a Private Limited Company to a
Public Limited Company on 15 April, 2008 thereby changing its name to
DEN Digital Entertainment Networks Limited. Subsequently, the Company
changed its name to DEN Networks Limited on 27 June, 2008.
During the financial year 2009-10, the Company issued and allotted
18,567,240 Equity Shares of face value of Rs. 10/- each, pursuant to
the Initial Public Offer (IPO), which were admitted for listing and
trading on Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE) with effect from November 24, 2009.
2.CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
a. Capital commitments
Estimated amount of contracts remaining to be executed on tangible
capital account (net of advances) Rs. 459.00 million [Previous year Rs.
1,900.92 million].
b.Contingent liabilities
Claims against the Company not acknowledged as debts*
As at As at
31st March,2015 31st March,
(Rs. in million) 2014 (Rs.
in million)
a) Bank guarantee issued 34.56 22.50
b) Corporate guarantee 250.00 250.00
issued by the Company
c) Outstanding letter of credits 216.72 19.25
d) Demand raised by UP Commercial 160.27 26.04
Tax Department for payment
of VAT on transfer of STB's
e) Demand raised by Delhi 890.08 84.70
Entertainment Tax
Department for payment
of Entertainment Tax
f) Demand raised by UP 43.11 -
Entertainment Tax Department
for payment of Entertainment Tax
g) Demand raised by Madhya 3.65 3.65
Pradesh Entertainment Tax
department for payment
of Entertainment Tax
h) Demand raised by Rajasthan 25.30 25.30
Entry Tax department for
payment of Entry Tax
i) Demand raised by Bihar 24.95 -
Commercial Tax Department
for payment of VAT on
transfer of STB's
j) Demand raised by Karnataka 21.51 -
Commercial Tax Department
for payment of VAT on
transfer of STB's
k) Demand raised by Kerala 22.88 -
Commercial Tax Department
for payment of VAT on
transfer of STB's
* No provision is considered necessary since the company expects
favourable decisions. The advance paid against the
above is Rs. 164.87 million (previous year Rs. 55.50 million).
3. During the previous year, the Company had paid managerial
remuneration to Chairman and Managing Director amounting to Rs. 24.93
million. Of this, remuneration amounting to Rs. 13.42 million was paid
in excess of the provisions of Section 198 and 309 read with Schedule
XIII of the Companies Act, 1956 for which the approval from the Central
Government has been received in the current financial year.
3. RELATED PARTY DISCLOSURES
I. List of related parties
a. Related parties where control exists
i. Subsidiaries held directly
1. Den Mahendra Satellite Private Limited
2. Den Mod Max Cable Network Private Limited
3. Den Krishna Cable TV Network Private Limited
4. Den Pawan Cable Network Private Limited
5. DEN BCN Suncity Network Private Limited
6. Den Harsh Mann Cable Network Private Limited
7. Den Classic Cable TV Services Private Limited
8. DEN Bindra Network Private Limited
9. DEN Montooshah Network Private Limited
10. DEN Ashu Cable Private Limited
11. Shree Siddhivinayak Cable Network Private Limited
12. Drashti Cable Network Private Limited
13. DEN MCN Cable Network Private Limited
14. Mahadev Den Network Private Limited
15. Mahadev Den Cable Network Private Limited
16. Den Patel Entertainment Network Private Limited
17. DEN Digital Cable Network Private Limited
18. Den Malayalam Telenet Private Limited
19. DEN Bellary City Cable Private Limited
20. DEN-Manoranjan Satellite Private Limited
21. DEN Supreme Satellite Vision Private Limited
22. DEN Nashik City Cable Network Private Limited
23. Radiant Satellite (India) Private Limited
24. Den Radiant Satelite Cable Network Private Limited
25. Den MewarRajdev Cable Network Private Limited
26. DEN RIS Cable Network Private Limited
27. DEN Sky Media Network Private Limited
28. Den Prince Network Private Limited
29. Den Varun Cable Network Private Limited
30. Den Crystal Vision Network Private Limited
31. Meerut Cable Network Private Limited
32. DEN Jai Ambey Vision Cable Private Limited
33. DEN Fateh Marketing Private Limited
34. Den Enjoy Cable Networks Private Limited
35. Den MaaSharda Vision Cable Networks Private Limited
36. Den F K Cable TV Network Private Limited
37. Den Shiva Cable Network Private Limited
38. Den Pradeep Cable Network Private Limited
39. Den Satellite Cable TV Network Private Limited
40. Den Narmada Network Private Limited
41. Den Ambey Cable Networks Private Limited
42. Den Budaun Cable Network Private Limited
43. DEN Aman Entertainment Private Limited
44. Den Kashi Cable Network Private Limited
45. Den Futuristic Cable Networks Private Limited
46. Den Digital Entertainment Gujarat Private Limited
47. Aster Entertainment Private Limited
48. Den Entertainment Network Private Limited
49. Shine Cable Network Private Limited
50. Den Rajkot City Communication Private Limited
51. Den Elgee Cable Vision Private Limited
52. Den Malabar Cable Vision Private Limited
53. Amogh Broad Band Services Private Limited
54. Galaxy Den Media & Entertainment Private Limited
55. Den UCN Network India Private Limited
56. Bali Den Cable Network Private Limited
57. Mahavir Den Entertainment Private Limited
58. Den Citi Channel Private Limited
59. Den Satellite Network Private Limited
60. Fab Den Network Private Limited
61. Fortune (Baroda) Network Private Limited
62. Den Infoking Channel Entertainers Private Limited
63. United Cable Network (Digital) Private Limited
64. Shri Ram Den Network Private Limited
65. Den Krishna Vision Private Limited
66. CAB-I-NET Communications Private Limited
67. Den Sahyog Cable Network Private Limited
68. Den Sariga Communications Private Limited
69. Den Sports & Entertainment Private Limited (formerly known as IME
Networks Private Limited)
70. Den Kattakada Telecasting and Cable Services Private Limited
71. Den A.F. Communication Private Limited
72. SreeGokulamStarnet Communication Private Limited
73. Big Den Entertainment Private Limited
74. Ambika Den Cable Network Private Limited
75. Den Steel City Cable Network Private Limited
76. Crystal Vision Media Private Limited
77. Victor Cable TV Network Private Limited
78. Sanmati Den Cable TV Network Private Limited
79. Multi Channel Cable Network Private Limited
80. Gemini Cable Network Private Limited
81. Multi Star Cable Network Private Limited
82. VM Magic Entertainment Private Limited
83. Matrix Cable Network Private Limited
84. Antique Communications Private Limited
85. Sanmati Entertainment Private Limited
86. Disk Cable Network Private Limited
87. Shaakumbari Den Media Private Limited
88. Silverline Television Network Private Limited
89. Ekta Entertainment Network Private Limited
90. Libra Cable Network Private Limited
91. DEN ADN Network Private Limited
92. CCN DEN Network Private Limited
93. Devine Cable Network Private Limited
94. Nectar Entertainment Private Limited
95. Pee Cee Cable Network Private Limited
96. Multitrack Cable Network Private Limited
97. Glimpse Communications Private Limited
98. Indradhanush Cable Network Private Limited
99. Adhunik Cable Network Private Limited
100. Blossom Entertainment Private Limited
101. Rose Entertainment Private Limited
102. Trident Entertainment Private Limited
103. Eminent Cable Network Private Limited
104. Mansion Cable Network Private Limited (w.e.f. 8-Apr-13)
105. DEN Discovery Digital Networks Private Limited (w.e.f. 29-Jun-13)
106. Jhankaar Cable Network Private Limited (w.e.f. 17-Jul-13)
107. Den Premium Multilink Cable Network Private Limited (w.e.f.
1-Jul-13)
108. Scorpio Cable Network Private Limited (w.e.f. 1-Nov-13)
109. Desire Cable Network Private Limited (w.e.f. 1-Feb-14)
110. Marble Cable Network Private Limited (w. e.f. 1-Feb-14)
111. Augment Cable Network Private Limited (w. e.f. 1-Feb-14)
ii. Subsidiaries held indirectly
1. Den Nanak Communication Private Limited
2. DEN Saya Channel Network Private Limited
3. Den Ambey Citi Cable Network Private Limited
4. Den Enjoy Navaratan Network Private Limited
5. Den Ambey Jhansi Cable Network Private Limited
6. Den Deva Cable Network Private Limited
7. DEN Faction Communication System Private Limited
8. Den AmbeyFarukabad Cable Network Private Limited
9. Star Channel Den Network Private Limited
10. Kishna Den Cable Networks Private Limited
11. Divya Drishti Den Cable Network Private Limited
12. DEN New Broad Communication Private Limited
13. Den Soccer Private Limited (formerly known as Astron Media
Networks Private Limited)
14. Fun Cable Network Private Limited
15. Rajasthan Entertainment Private Limited
16. Kerela Entertainment Private Limited
17. Uttar Pradesh Digital Cable Network Private Limited
18. Saturn Digital Cable Private Limited
19. Den Enjoy SBNM Cable Network Private Limited
20. Capital Entertainment Private Limited
21. Bhadohi DEN Entertainment Private Limited
22. DEN STN Television Network Private Limited
23. Srishti Den Networks Private Limited (formerly known as Platinum
Cable TV Network Private Limited)
24. Maitri Cable Network Private Limited
25. Melody Cable Network Private Limited
26. Mountain Cable Network Private Limited
27. Portrait Cable Network Private Limited
28. Den Prayag Cable Networks Private Limited
29. Skynet Cable Network Private Limited (w.e.f. 25-Apr-13)
30. DEN ABC Cable Network Ambarnath Private Limited (w.e.f. 1-Jul-13)
31. Konark IP Dossiers Private Limited (w.e.f. 1-Jul-13)
32. Angel Cable Network Private Limited (w.e.f. 1-Nov-13)
33. ABC Cable Network Private Limited (w.e.f. 1-Jan-14)
34. Den MTN Star Vision Networks Private Limited (w.e.f. 1-Jan-14)
iii. Jointly controlled entities
1. Star Den Media Services Private Limited
2. Media Pro Enterprise India Private Limited
3. Macro Commerce Private Limited (w.e.f. 15-Jan-15)
b. Entities under significant influence
1. Access Financial Services Limited
c. Key managerial personnel
1. Mr. Sameer Manchanda (Chairman and Managing Director)
4. OPERATING LEASE
The Company has taken office premises and accommodation for its
employee under cancellable operating lease agreements. The lease
rental expenses recognised in the Statement of Profit and Loss for the
year is Rs. 141.26 million (Previous year Rs. 110.68 million).
5. FINANCE LEASE AS LESSEE
The Company has entered into finance lease arrangements for certain
equipment which provide the Company an option to purchase the assets at
the end of the lease period.
Future minimum lease payments and reconciliation of gross investment in
the lease and present value of minimum lease payments
6. DISCLOSURES AS PER THE MICRO, SMALL AND MEDIUM ENTERPRISES
DEVELOPMENT (MSMED) ACT, 2006
As per information available with the management, the balance due to
enterprises covered under the MSMED Act, 2006 is Rs. Nil (Previous year
Rs. Nil) and no interest has been paid or is payable under the terms of
the MSMED Act, 2006. This has been relied upon by the auditors.
7. disclosure PuRSuANT To accounting standard 15 (revised 2005) on
'employee BENEFITS'
A. Defined contribution plans
The Company makes contribution toward the following defined
contribution plans for qualifying employees:
a. Employees' Provident Fund (EPF)
B. Defined benefit plan Gratuity plan
Gratuity liability arises on retirement, withdrawal, resignation, and
death of an employee. The aforesaid liability is calculated on the
basis of 15 days salary (i.e. last drawn salary plus dearness
allowance) for each completed year of service or part thereof in excess
of 6 months, subject to a maximum of Rs. 1,000,000. Vesting occurs upon
completion of 5 years of service.
The present value of the defined benefit obligation and the related
current service cost are measured using the Projected Unit Credit
method with actuarial valuations being carried out at each balance
sheet date.
The following tables set out the status of the gratuity plan (which is
unfunded) and amounts recognised in the Company's financial statements
as at 31st March, 2015.
8. EMPLOYEE STOCK OPTION PLAN 2010 ("ESOP 2010")
a. The Company had established an Employee Stock Option Plan (ESOP
2010) in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999, which have been approved by the Board of Directors and
the shareholders. A Nomination and Remuneration / Compensation
Committee comprising majority of independent, non-executive members of
the Board of Directors administers the ESOPs. All option under the
ESOPs are exercisable for equity shares. The Company had taken approval
of the Shareholders to grant and allot up-to 5,219,599 equity options
under the said scheme. During the year, the Company has granted
1,680,000 equity options to eligible employees of the Company and
directors of the subsidiary companies.
b. There shall be a minimum period of one year between the grant of
options and vesting of options. The vesting period may extend up to
three years. The vesting shall happen in one or more tranches as may be
decided by the Nomination and Remuneration / Compensation Committee.
The exercise period of the options is a period of one year after the
vesting of the options. Each option is exercisable for one equity share
of Rs. 10 each fully paid up on payment of exercise price (as
determined by the Nomination and Remuneration / Compensation Committee)
of share determined with respect to the date of grant. The Company has
granted 4,756,195 options up to 31st March, 2015. During the year,
450,000 options were surrendered/forfeited.
Employee Stock Option Plan 2014 ("ESOP 2014")
a. In the extraordinary general meeting held on 05 January, 2015 the
Shareholders through Postal Ballot approved the issue of 8,909,990
options (5% of issued capital) under the Scheme titled "DEN ESOP Plan
A-2014 (ESOP A) and DEN ESOP Plan B- 2014" (ESOP B) in accordance with
the Securities and Exchange Board of India (Share Bared Employee
Benefits) Regulations 2014.
The ESOP A and B allows the issue of options to employees of the
Company Each option comprises one underlying equity share.
As per the Scheme, the Nomination and Remuneration / Compensation
Committee grants the options to the eligible employees. The exercise
price of each option shall be such as may be decided by the Nomination
and Remuneration / Compensation Committee. The options granted vest
over a period of 4 years from the date of the grant in proportions as
may be decided by the Nomination and Remuneration/ Compensation
Committee. Options may be exercised within 1 year from the date of
vesting.
b. The ESOP scheme titled "DEN ESOP Plan A -2014" (ESOP A) was
approved by the shareholders through postal ballot on 05 January 2015.
4,454,995 options are covered under the Scheme for 4,454,995 shares.
During the current year, the Nomination and Remuneration / Compensation
Committee has not granted options under the said scheme.
c. The ESOP scheme titled "DEN ESOP Plan B- 2014 was approved by the
shareholders through postal ballot on 05January 2015. 4,454,995 options
are covered under the Scheme for 4,454,995 equity shares.
The Nomination and Remuneration / Compensation Committee of the Company
had granted 4,450,000 options under this Scheme to eligible employees.
The shares covered by such options were 4,450,000 equity shares.
The vesting period of these options range over a period of 4 years. The
options may be exercised within a period of 1 year from the date of
vesting.
9. INTEREST IN JOINTLY CONTROLLED ENTITIES
The Company has 50% interest in the assets, liabilities, expense and
income of Star Den Media Services Private Limited (Star Den),
incorporated in India, which is involved in the business of
distribution of television channels. Further, interest of Star Den in
Media Pro Enterprise India Private Limited (Media Pro) is 50% resulting
in 25% interest of the Company in Media Pro. The Company also has 50%
interest in the assets, liabilities, expense and income of Macro
Commerce Private Limited (Macro), incorporated in India, which is a TV
Commerce Shop  A 24 Hour Home Shopping Channel.
The Company has total investments of Rs. 5,783.48 million in
subsidiary companies and joint venture companies. Of these, the Company
has investment of Rs. 660.29 million and has balances of loans/advances
of Rs. 21.47 million in various subsidiary companies whose Net Worth as
at 31st March, 2015 has fully/substantially eroded. Of these, companies
with investments aggregating to Rs. 313.74 million and with balances of
loans/advances of Rs. 5.26 million, whose net worth is
fully/substantially eroded have earned profits for the year ended 31st
March, 2015.The management of the Company expects that these subsidiary
companies will have positive cash flows to adequately sustain its
operations in the foreseeable future. Having regard to the long term
investment and strategic involvement no provision for diminution of
these investments has been considered necessary (Also see note 13).
10. Pursuant to TRAI notification, Digital Addressable System (DAS)
was implemented in metropolitan cities of the country in phase I with
effect from 1 November, 2012 and in 38 other cities in phase II with
effect from 1 April, 2013. The Company is in the process of finalising
the subscription fee to be billed to subscribers. Pending finalisation
of such subscription fees, the Company has recognised subscription
income on best estimates based on market trends and negotiations with
distributors/ local cable operators. Based on its review of such
estimates on a regular basis management is of the view that any change
arising in the subscription fee once finalised will not have
significant impact on the revenue of the Company for the current year
and previous year.
11. Previous year's figures have been regrouped/ reclassified wherever
necessary to correspond with the current year's classification/
disclosure.
Mar 31, 2014
BACKGROUND
DEN Networks Limited (hereinafter referred to as ''the Company'' or
''DEN'') was incorporated on 10 July, 2007 and is engaged in distribution
of television channels through analog and digital cable distribution
network and provision of broadband services.
The Company changed its status from a Private Limited Company to a
Public Limited Company on 15 April, 2008 thereby changing its name to
DEN Digital Entertainment Networks Limited. Subsequently, the Company
changed its name to DEN Networks Limited on 27 June, 2008.
During the financial year 2009-10, the Company issued and allotted
18,567,240 Equity Shares of face value of Rs. 10/- each, pursuant to
the Initial Public Offer (IPO), which were admitted for listing and
trading on Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE) with effect from November 24, 2009.
1. SEGMENT REPORTING
"The Company is engaged in the distribution and promotion of television
channels and related services which is considered as the only
reportable business segment. The Company''s operations are based in
India. As the Company operates in a single business and geographical
segment, the reporting requirements for primary and secondary segment
disclosures prescribed by paragraphs 39 to 51 of Accounting Standard 17
- Segment Reporting, are not required to be disclosed in these
financial statements."
2. "During the year, the Company has paid managerial remuneration to
Chairman and Managing Director amounting to Rs. 24.93 million. Of this,
remuneration amounting to Rs. 13.42 million is paid in excess of the
provisions of Section 198 & 309 read with Schedule XIII of the
Companies Act, 1956 for which the approval from the Central Government
is awaited."
3. Capital commitments and contingent liabilities
a. Capital commitments
Estimated amount of contracts remaining to be executed on tangible
capital account (net of advances) Rs. 1,900.92 million [Previous year
Rs. 3,116.61 million].
b. Contingent liabilities
Claims against the Company not acknowledged as debts
a. Bank guarantee issued 22.50 22.10
b. Corporate guarantee issued by the Company 250.00 250.00
c. Outstanding letter of credits 19.25 401.88
d. Demand raised by UP Commercial Tax 26.04 51.03
Department for payment of VAT on
transfer of STB''s
e. Demand raised by Delhi Entertainment 84.70 -
Tax Department for
payment of Entertainment Tax
f. Demand raised by Madhya Pradesh 3.65 -
Entertainment Tax department for
payment of Entertainment Tax
g. Demand raised by Rajasthan Entry Tax 25.30 -
department for payment of Entry Tax
4. OPERATING LEASE
The Company has taken office premises and accommodation for its
employee under cancellable operating lease agreements. The lease rental
expenses recognised in the Statement of Profit and Loss for the year is
Rs. 105.28 million [Previous year Rs. 99.04 million].
6. FINANCE LEASE AS LESSEE
The Company has entered into finance lease arrangements for certain
equipment which provide the Company an option to purchase the assets at
the end of the lease period.
7. Disclosures as per the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006
As per information available with the management, the balance due to
enterprises covered under the MSMED Act, 2006 is Rs. Nil (Previous year
Rs. Nil) and no interest has been paid or is payable under the terms of
the MSMED Act, 2006. This has been relied upon by the auditors.
8. The Company has total investments of Rs. 4,961.60 million in
subsidiary companies and a joint venture company. Of these, the Company
has investment of Rs. 531.19 million and has balances of loans/advances
of Rs. 32.81 million in various subsidiary companies whose Net Worth as
at March 31, 2014 has fully/substantially eroded. Of these, companies
with investments aggregating to Rs. 131.58 million and with balances of
loans/advances of Rs. 14.51 million, whose net worth is
fully/substantially eroded have earned profits for the year ended March
31, 2014. The management of the Company expects that these subsidiary
companies will have positive cash flows to adequately sustain its
operations in the foreseeable future. Having regard to the long term
investment and strategic involvement no provision for diminution of
these investments has been considered necessary.
9. Pursuant to TRAI notification, Digital Addressable System (DAS) was
implemented in metropolitan cities of the country in phase I with
effect from 1 November, 2012 and in 38 other cities in phase II with
effect from 1 April, 2013. The Company is in the process of finalising
the subscription fee to be billed to subscribers. Pending finalisation
of such subscription fees, the Company has recognised subscription
income on best estimates based on market trends and negotiations with
distributors/ local cable operators. Based on its review of such
estimates on a regular basis management is of the view that any change
arising in the subscription fee once finalised will not have
significant impact on the revenue of the Company for the current year.
10. Previous year''s figures have been regrouped/ reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Mar 31, 2013
1. Background
DEN Networks Limited (hereinafter referred to as ''the Company'' or
''DEN'') was incorporated on 10 July, 2007 and is engaged in distribution
of television channels through analog and digital cable distribution
network and provision of internet services.
The Company changed its status from a Private Limited Company to a
Public Limited Company on 15 April, 2008 thereby changing its name to
DEN Digital Entertainment Networks Limited. Subsequently, the Company
changed its name to DEN Networks Limited on 27 June, 2008
During the financial year 2009-10, the Company issued and allotted
1,85,67,240 Equity Shares of face value of Rs.10/-each, pursuanttothe
Initial Public Offer (IPO), which were admitted for listing and trading
on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) with
effect from November24,2009.
2. SEGMENT REPORTING
"The Company is engaged in the distribution & promotion of television
channels and related services which is considered as the only
reportable business segment. The Company''s operations are based in
India. As the Company operates in a single business and geographical
segment, the reporting requirements for primary and secondary segment
disclosures prescribed by paragraphs 39 to 51 of Accounting Standard 17
- Segment Reporting, are not required to be disclosed in these
financial statements.
3. RELATED PARTY DISCLOSURES
I. List of related parties
a. Related parties where control exists
i. Subsidiaries held directl
1. Den Mahendra Satellite Private Limited (w.e.f. 27-Dec-07)
2. Den Mod Max Cable Network Private Limited (w.e.f. 27-Dec-07)
3. Den Krishna Cable TV Network Private Limited (w.e.f. 27-Dec-07)
4. Den Pawan Cable Network Private Limited (w.e.f. 27-Dec-07)
5. DEN BCN Suncity Network Private Limited (w.e.f. 27-Dec-07)
6. Den Harsh Mann Cable Network Private Limited (w.e.f. 1-Mar-08)
7. Den Classic Cable TV Services Private Limited (w.e.f. 1-May-08)
8. DEN Bindra Network Private Limited (w.e.f. 1-Jul-08)
9. DEN Montooshah Network Private Limited (w.e.f. 16-Jul-08)
10. DEN Ashu Cable Private Limited (w.e.f. 22-Aug-08)
11. Dew Shree Network Private Limited (w.e.f. 26-Sep-07)
12. Shree Siddhivinayak Cable Network Private Limited (w.e.f.
1-Dec-07)
13. Drashti Cable Network Private Limited (w.e.f. 1-Apr-08)
14. DEN MCN Cable Network Private Limited (w.e.f. 8-Apr-08)
15. Mahadev Den Network Private Limited (w.e.f. 1-Feb-08)
16. Mahadev Den Cable Network Private Limited (w.e.f. 1-Feb-08)
17. Den Patel Entertainment Network Private Limited (formerly known as
Mahadev Den Cable Net Private Limited (w.e.f. 1-Feb-08)
18. DEN Digital Cable Network Private Limited (w.e.f. 1-May-08)
19. Den Malayalam Telenet Private Limited (w.e.f. 22-Aug-08)
20. DEN Bellary City Cable Private Limited (w.e.f. 1-Jan-09)
21. DEN-Manoranjan Satellite Private Limited (w.e.f. 1-Mar-08)
22. DEN Supreme Satellite Vision Private Limited (w.e.f. 30-May-08)
23. DEN Nashik City Cable Network Private Limited (w.e.f. 26-Jun-08)
24. Radiant Satellite (India) Private Limited (w.e.f. 2-Apr-08)
25. Den Radiant Satelite Cable Network Private Limited (w.e.f.
2-Apr-08)
26. Den Mewar Rajdev Cable Network Private Limited (w.e.f. 2-Apr-08)
27. DEN RIS Cable Network Private Limited (w.e.f. 1-Jun-08)
28. DEN Sky Media Network Private Limited (w.e.f. 31-May-08)
29. Den Prince Network Private Limited (w.e.f. 1-Feb-08)
30. Den Varun Cable Network Private Limited (w.e.f. 7-Jan-08)
31. Den Crystal Vision Network Private Limited (w.e.f. 27-Dec-07)
32. Meerut Cable Network Private Limited (w.e.f. 1-Dec-07)
33. DEN Jai Ambey Vision Cable Private Limited (w.e.f. 5-Apr-08)
34. DEN Fateh Marketing Private Limited (w.e.f. 9-Apr-08)
35. Den Prayag Cable Networks Private Limited (w.e.f. 1-Feb-08)
36. Den Enjoy Cable Networks Private Limited (w.e.f. 2-Apr-08)
37. Den Maa Sharda Vision Cable Networks Private Limited (w.e.f.
1-Apr-08)
38. Den F K Cable TV Network Private Limited (w.e.f. 1-May-08)
39. Den Shiva Cable Network Private Limited (w.e.f. 1-May-08)
40. Den Pradeep Cable Network Private Limited (w.e.f. 1-Feb-08)
41. Den Satellite Cable TV Network Private Limited (w.e.f. 1-Apr-08)
42. Den Narmada Network Private Limited (w.e.f. 1-Sep-08)
43. Den Ambey Cable Networks Private Limited (w.e.f. 11-Sep-07)
. Dsn Budaun Cable Network Private Limited (w.e.f. 1-0ct-08)
- DEN Aman Entertainment Private Limited (w.e.f. 1-0ct-08)
46. Den Kashi Cable Network Private Limited (w.e.f. 1-Mar-08)
47. Den Futuristic Cable Networks Private Limited (w.e.f. 9-Oct-07)
48. Den Digital Entertainment Gujarat Private Limited (w.e.f.
31-May-08)
49. Aster Entertainment Private Limited (w.e.f. 31-May-08)
50. Den Entertainment Network Private Limited (w.e.f. 1-Sep-07)
51. Shine Cable Network Private Limited (w.e.f. 1-Dec-08)
52. Den Rajkot City Communication Private Limited (formerly known as
Rajkot City Communication Private Limited) (w.e.f. 10-Apr-09)
53. Den Elgee Cable Vision Private Limited (w.e.f. 3-Jun-09)
54. Den Malabar Cable Vision Private Limited (w.e.f. 30-Apr-09)
55. Amogh Broad Band Services Private Limited (w.e.f. 29-Jul-09)
56. Galaxy Den Media & Entertainment Private Limited (w.e.f.
15-Jul-09)
57. Den UCN Network India Private Limited (w.e.f. 25-Jul-09)
58. Bali Den Cable Network Private Limited (w.e.f. 1-Sep-09)
59. Mahavir Den Entertainment Private Limited (w.e.f. 1-Sep-09)
60. Den Citi Channel Private Limited (w.e.f. 16-Nov-09)
61. Den Satellite Network Private Limited (w.e.f. 15-Jan-10)
62. Fab Den Network Private Limited (w.e.f. 1-Jan-10)
63. Fortune (Baroda) Network Private Limited (w.e.f. 31-Jul-09)
64. Den Infoking Channel Entertainers Private Limited (w.e.f.
1-Aug-09)
65. United Cable Network (Digital) Private Limited (w.e.f. 1-Apr-10)
66. Shri Ram Den Network Private Limited (w.e.f. 1-Apr-10)
67. Den Krishna Vision Private Limited (w.e.f. 1-Apr-10)
68. CAB-I-NET Communications Private Limited (w.e.f. 1-May-10)
69. Den Sahyog Cable Network Private Limited (w.e.f. 1-Jul-10)
70. Den Sariga Communications Private Limited (w.e.f. 1-Aug-10)
71. IME Networks Private Limited (w.e.f. 27-Sep-10)
72. Den Kattakada Telecasting and Cable Services Private Limited
(w.e.f. 1 -Oct-10)
73. Den A.F. Communication Private Limited (w.e.f. 1-Dec-10)
74. Sree Gokulam Starnet Communication Private Limited (w.e.f.
24-Jan-11)
75. Big Den Entertainment Private Limited (w.e.f. 1-Feb-11)
76. Ambika Den Cable Network Private Limited (w.e.f. 1-Jul-11)
77. Den Steel City Cable Network Private Limited (w.e.f. 1-Jul-11)
78. Crystal Vision Media Private Limited (w.e.f. 12-Jul-11)
79. Victor Cable TV Network Private Limited (w.e.f. 13-Jul-11)
80. Sanmati Den Cable TV Network Private Limited (w.e.f. 25-Aug-11)
81. Multi Channel Cable Network Private Limited (w.e.f. 1-Sep-11)
82. Gemini Cable Network Private Limited (w.e.f. 1-Oct-11)
83. Multi Star Cable Network Private Limited (w.e.f. 1-Oct-11)
84. VM Magic Entertainment Private Limited (w.e.f. 1-Oct-11)
85. Matrix Cable Network Private Limited (w.e.f. 1-Oct-11)
86. Antique Communications Private Limited (w.e.f. 5-Dec-11)
87. Sanmati Entertainment Private Limited (w.e.f. 26-Dec-11)
88. Disk Cable Network Private Limited (w.e.f. 6-Jan-12)
89. Shaakumbari Den Media Private Limited (w.e.f. 1-Feb-12)
90. Silverline Television Network Private Limited (w.e.f. 29-Mar-12)
91. Ekta Entertainment Network Private Limited (w.e.f. 15-Jun-12)
92. Libra Cable Network Private Limited (w.e.f. 1-Feb-13)
93. DEN ADN Network Private Limited (w.e.f. 27-Jul-12)
94. CCN DEN Network Private Limited (w.e.f. 27-Jul-12)
95. Devine Cable Network Private Limited (w.e.f. 1-Sep-12)
96. Nectar Entertainment Private Limited (w.e.f. 1-Sep-12)
97. Pee Cee Cable Network Private Limited (w.e.f. 11-Feb-13)
98. Multitrack Cable Network Private Limited (w.e.f. 1-Nov-12)
99. Glimpse Communications Private Limited (w.e.f. 16-Nov-12)
100. Indradhanush Cable Network Private Limited (w.e.f. 22-Dec-12)
101. Adhunik Cable Network Private Limited (w.e.f. 16-Nov-12)
102. Blossom Entertainment Private Limited (w.e.f. 31-Mar-12)
103. Rose Entertainment Private Limited (w.e.f. 31-Mar-12)
104. Trident Entertainment Private Limited (w.e.f. 31-Mar-12)
105. Eminent Cable Network Private Limited (w.e.f. 31-Mar-12)
ii. Subsidiaries held indirectly
1. Den Nanak Communication Private Limited (w.e.f. 1-Mar-08)
2. DEN Saya Channel Network Private Limited (w.e.f. 30-Jun-08)
3. Den Ambey Citi Cable Network Private Limited (w.e.f. 1-Feb-08)
4. Den Enjoy Navaratan Network Private Limited (w.e.f. 2-Apr-08)
5. Den Ambey Jhansi Cable Network Private Limited (w.e.f. 1-Mar-09)
6. Den Deva Cable Network Private Limited (w.e.f. 1-Apr-08)
7. DEN Faction Communication System Private Limited (w.e.f. 1-0ct-08)
8. Den Ambey Farukabad Cable Network Private Limited (w.e.f. 1-Mar-09)
9. Star Channel Den Network Private Limited (w.e.f. 1-Aug-09)
10. Kishna Den Cable Networks Private Limited (w.e.f. 1-Nov-09)
11. Divya Drishti Den Cable Network Private Limited (w.e.f. 1-Apr-10)
12. DEN New Broad Communication Private Limited (w.e.f. 1-Jul-10)
13. Astron Media Networks Private Limited (w.e.f. 27-Sep-10)
14. Fun Cable Network Private Limited (w.e.f. 15-Feb-11)
15. Rajasthan Entertainment Private Limited (w.e.f. 23-Feb-11)
16. Kerela Entertainment Private Limited (w.e.f. 9-Dec-10)
17. Uttar Pradesh Digital Cable Network Private Limited (w.e.f.
4-Apr-11)
18. Saturn Digital Cable Private Limited (w.e.f. 1-Jul-11)
19. Den Enjoy SBNM Cable Network Private Limited (w.e.f. 11-Apr-11)
20. Capital Entertainment Private Limited (w.e.f. 30-Dec-11)
21. Bhadohi DEN Entertainment Private Limited (w.e.f. 5-Dec-11)
22. DEN STN Television Network Private Limited (w.e.f. 1-Aug-12)
23. Platinum Cable TV Network Private Limited (w.e.f. 1 -Jan-13)
24. Maitri Cable Network Private Limited (w.e.f. 25-Mar-13)
25. Melody Cable Network Private Limited (w.e.f. 25-Mar-13)
26. Mountain Cable Network Private Limited (w.e.f. 25-Mar-13)
27. Portrait Cable Network Private Limited (w.e.f. 25-Mar-13)
b. Jointly controlled entities
1. Star Den Media Services Private Limited
2. Media Pro Enterprise India Private Limited
c. Entities under significant influence
1. Setpro 18 Distribution Limited
d. Key managerial personnel
1. Mr. SameerManchanda
4. Deferred tax
a. Deferred tax assets and liabilities are being offset as they relate
to taxes on income levied by the same governing tax laws.
b. Break up of deferred tax assets/ liabilities and reconciliation of
current year''s deferred tax charge is as follows:
5. Operating Lease
The Company has taken office premises and accommodation for its
employee under cancellable operating lease agreements. The lease rental
expenses recognised in the Statement of Profit and Loss for the year is
Rs. 99.04 million [Previous year Rs. 90.55 million],
6. Finance lease as lessee
The Company has entered into finance lease arrangements for certain
equipment which provide the Company an option to purchase the assets
atthe end ofthe lease period.
Future minimum lease payments and reconciliation of gross investment in
the lease and present value of minimum lease payments.
7. Finance lease as lessor
The Company has entered into finance lease arrangements for certain
equipment which provide the Company an option to sell the assets at the
end ofthe lease period.
Future minimum lease payments and reconciliation of gross investment in
the lease and present value of minimum lease payments
8. Disclosures as perthe Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006
As per information available with the management, the balance due to
enterprises covered under the MSMED Act, 2006 is Rs. Nil (Previous year
Rs. Nil) and no interest has been paid oris payable underthe terms
ofthe MSMED Act, 2006.
9. Disclosure pursuantto Accounting Standard 15 (Revised 2005) on
''Employee Benefits''
A. Defined contribution plans and state plans
The Company makes contribution toward the following defined
contribution plans for qualifying employees:
a. Employees''Provident Fund (EPF)
b. Employees''State Insurance (ESI)
During the yearthe Company has recognised the following amounts in the
Statement of Profit and Loss:
10. Employee Stock Option Plan 2010 ("ESOP 2010")
a. The Company had established an Employee Stock Option Plan (ESOP
2010) in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 which have been approved by the Board of Directors and
the shareholders. A remuneration/compensation committee comprising
majority of independent, non executive members ofthe Board of Directors
administers the ESOPs. All option under the ESOPs are exercisable for
equity shares. The Company has granted 5,000,000 equity options to
eligible employees ofthe Company & directors ofthe subsidiary
companies. During the year, Nil (Previous year 1,465,874) options have
been surrendered by eligible employees and directors ofthe subsidiary
companies
b. There shall be a minimum period of one year between the grant of
options and vesting of options. The vesting period may extend up to
three years. The vesting shall happen in one or more tranches as may be
decided by the Compensation/Remuneration Committee. The exercise period
ofthe options is a period of one year after the vesting ofthe options.
Each option is exercisable for one equity share of'' 10 each fully paid
up on payment of exercise price (as determined by the remuneration/
compensation committee) of share determined with respect to the date of
grant. All ESOP options have been vested upto 31 st March 2013.
11. The Company has total investments of Rs. 43,674.70 lakhs in
subsidiary companies and a joint venture company. Of these, the Company
has investment of Rs. 4,176.58 lakhs and has balances of loans/advances
of Rs. 604.75 lakhs in various subsidiary companies whose Net Worth as
at March 31,2013 (as per management certified accounts) has
fully/substantially eroded. Of these, companies with investments
aggregating to Rs. 982.17 lakhs and with balances of loans/advances of
Rs. 1.00 lakhs, whose net worth is fully/substantially eroded have (as
per management certified accounts), earned profits forthe year ended
March 31, 2013. The management ofthe Company expects that these
subsidiary companies will have positive cash flows to adequately
sustain its operations in the foreseeable future. Having regard to the
long term investment and strategic involvement no provision for
diminution ofthese investments has been considered necessary.
12. Previous year''s figures have been regrouped/ reclassified wherever
necessary to correspond with the current year''s
classification/disclosure.
Mar 31, 2012
1. Background
DEN Networks Limited (hereinafter referred to as 'the Company' or
'DEN') was incorporated on 10 July, 2007 to engage in cable television
distribution, broadband internet and other related business.
DEN is engaged in distribution of television channels through analog
and digital cable distribution network and provision of internet
services.
The Company changed its status from a Private Limited Company to a
Public Limited Company on 15 April, 2008 thereby changing its name to
DEN Digital Entertainment Networks Limited. Subsequently, the company
changed its name to DEN Networks Limited on 27 June, 2008.
During the financial year 2009-10, the Company issued and allotted
1,85,67,240 Equity Shares of face value of Rs.10/- each, pursuant to the
Initial Public Offer (IPO), which were admitted for listing and trading
on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) with
effect from November 24,2009.
2. Capital commitments and contingent liabilities
a. Capital commitments
Estimated amount of contracts remaining to be executed on tangible
capital account (net of advances) X2 78.21 millions [Previous year Rs.
541.79 millions].
b. Contingent liabilities
i. Guarantees issued by bankers outstanding as at the end of the year
amounting to Rs.44.90 millions [Previous year Rs.41.78 millions] on account
of the following:
a. license for internet use issued by the Department of Teleco
mmunications -X 1.00 millions [Previous year Rs.21.00 millions]
b. Tax Authorities for statutory registrations - Rs.3.33 millions
[Previous year Rs.0.23 millions]
c. Bombay Stock Exchange as security - Rs.20.50 millions [Previous year
Rs.20.50 millions]
d. Others - Rs.0.07 millions [Previous year Rs.0.05 millions]
ii. Outstanding letters of credit as at the end of the year Rs.370.83
millions [Previous year Rs.29451 millions].
iii. Guarantee given by the company for a term loan taken from bank by
a subsidiary Company outstanding as at the end of the year amounting to
Rs.2 50.00 millions [Previous year Rs.Nil].
3. Segment reporting
The company is engaged in the distribution & promotion of television
channels and related services which is considered as the only
reportable business segment. The Company's operations are based in
India. As the Company operates in a single business and geographical
segment, the reporting requirements for primary and secondary segment
disclosures prescribed by paragraphs 39 to 51 of Accounting Standard 17
- Segment Reporting, are not required to be disclosed in these
financial statements.
4. Related Party Disclosures I. List of related parties a. Related
parties where control exists i. Subsidiaries held directly
1. Den Mahendra Satellite Private Limited (w.e.f. 27-Dec-07)
2. Den Mod Max Cable Network Private Limited (w.e.f. 27-Dec-07)
3. Den Krishna Cable TV Network Private Limited (w.e.f. 27-Dec-07)
4. Den Pawan Cable Network Private Limited (w.e.f. 27-Dec-07)
5. DEN BCN Suncity Network Private Limited (w.e.f. 27-Dec-07)
6. Den Harsh Mann Cable Network Private Limited (w.e.f. l-Mar-08)
7. Den Classic Cable TV Services Private Limited (w.e.f. l-May-08)
8. DEN Bindra Network Private Limited (w.e.f. l-Jul-08)
9. DEN Montooshah Network Private Limited (w.e.f. 16-Jul-08)
10. DEN Ashu Cable Private Limited (w.e.f. 22- Aug-08)
11. Dew Shree Network Private Limited (w.e.f. 26- Sep-07)
12. Shree Siddhivinayak Cable Network Private Limited (w.e.f. l-Dec-07)
13. Drashti Cable Network Private Limited (w.e.f. l-Apr-08)
14. DEN MCN Cable Network Private Limited (w.e.f. 8-Apr-08)
15. Mahadev Den Network Private Limited (w.e.f. l-Feb-08)
16. Mahadev Den Cable Network Private Limited (w.e.f. l-Feb-08)
17. Mahadev Den Cable Net Private Limited (w.e.f. l-Feb-08)
18. DEN Digital Cable Network Private Limited (w.e.f. l-May-08)
19. Den Malayalam Telenet Private Limited (w.e.f. 22-Aug-08)
20. DEN Bellary City Cable Private Limited (w.e.f. l-Jan-09)
21. DEN-Manoranjan Satellite Private Limited (w.e.f. l-Mar-08)
22. DEN Supreme Satellite Vision Private Limited (w.e.f. 30-May-08)
23. DEN Nashik City Cable Network Private Limited (w.e.f. 26-Jun-08)
24. Radiant Satellite (India) Private Limited (w.e.f. 2-Apr-08)
25. Den Radiant Satelite Cable Network Private Limited (w.e.f.
2-Apr-08)
26. Den Mewar Rajdev Cable Network Private Limited (w.e.f. 2-Apr-08)
27. DEN RIS Cable Network Private Limited (w.e.f. l-Jun-08)
28. DEN Sky Media Network Private Limited (w.e.f. 3 l-May-08)
29. Den Prince Network Private Limited (w.e.f. l-Feb-08)
30. Den Varun Cable Network Private Limited (w.e.f. 7-Jan-08)
31. Den Crystal Vision Network Private Limited (w.e.f.27-Dec-07)
32. Meerut Cable Network Private Limited (w.e.f. l-Dec-07)
33. DEN Jai Ambey Vision Cable Private Limited (w.e.f. 5-Apr-08)
34. DEN Fateh Marketing Private Limited (w.e.f. 9-Apr-08)
35. Den Prayag Cable Networks Private Limited (w.e.f. l-Feb-08)
36. Den Enjoy Cable Networks Private Limited (w.e.f. 2-Apr-08)
37. Den Maa Sharda Vision Cable Networks Private Limited (w.e.f.
l-Apr-08)
38. Den F K Cable TV Network Private Limited (w.e.f. l-May-08)
39. Den Shiva Cable Network Private Limited (w.e.f. l-May-08)
40. Den Pradeep Cable Network Private Limited (w.e.f. l-Feb-08)
41. Den Satellite Cable TV Network Private Limited (w.e.f. l-Apr-08)
42. Den Narmada Network Private Limited (w.e.f. l-Sep-08)
43. Den Ambey Cable Networks Private Limited (w.e.f. ll-Sep-07)
44. Den Budaun Cable Network Private Limited (w.e.f. l-Oct-08)
45. DEN Aman Entertainment Private Limited (w.e.f. l-Oct-08)
46. Den Kashi Cable Network Private Limited (w.e.f. l-Mar-08)
47. Den Futuristic Cable Networks Private Limited (w.e.f. 9-Oct-07)
48. Den Digital Entertainment Gujarat Private Limited (w.e.f. 3
l-May-08)
49. Aster Entertainment Private Limited (w.e.f. 3 l-May-08)
50. Den Entertainment Network Private Limited (w.e.f. l-Sep-07)
51. Shine Cable Network Private Limited (w.e.f. l-Dec-08)
52. Creative Cable Network (partnership firm) (w.e.f. 12-Oct-07)
(dissolved during financial year 2011-12)
53. Rajkot City Communication Private Limited (w.e.f. 10-Apr-09)
54. Den Elgee Cable Vision Private Limited (w.e.f. 3-Jun-09)
55. Den Malabar Cable Vision Private Limited (w.e.f. 30-Apr-09)
56. Amogh Broad Band Services Private Limited (w.e.f. 29-Jul-09)
57. Galaxy Den Media & Entertainment Private Limited (w.e.f. 15-Jul-09)
58. Den UCN Network India Private Limited (w.e.f. 25-Jul-09)
59. Bali Den Cable Network Private Limited (w.e.f. l-Sep-09)
60. Mahavir Den Entertainment Private Limited (w.e.f. l-Sep-09)
61. Den Citi Channel Private Limited (w.e.f. 16- Nov-09)
62. Den Satellite Network Private Limited (w.e.f. 15-Jan-10)
63. Fab Den Network Private Limited (w.e.f. 1-Jan- 10)
64. Fortune (Baroda) Network Private Limited (w.e.f. 31-Jul-09)
65. Den Infoking Channel Entertainers Private Limited (w.e.f. l-Aug-09)
66. United Cable Network (Digital) Private Limited (w.e.f. l-Apr-10)
67. Shri Ram Den Network Private Limited (w.e.f. l-Apr-10)
68. Den Krishna Vision Private Limited (w.e.f. l-Apr-10)
69. Cab-I-Net Communications Private Limited (w.e.f. l-May-10)
70. Den Sahyog Cable Network Private Limited (w.e.f. l-Jul-10)
71. Den Sariga Communications Private Limited (w.e.f. l-Aug-10)
72. IME Networks Private Limited (w.e.f. 27-Sep- 10)
73. Den Kattakada Telecasting and Cable Services Private Limited
(w.e.f. l-Oct-10)
74. Den A.F. Communication Private Limited (w.e.f. l-Dec-10)
75. Sree Gokulam Starnet Communication Private Limited (w.e.f.
24-Jan-ll)
76. Big Den Entertainment Private Limited (w.e.f. 1-Feb-ll)
77. Ambika Den Cable Network Private Limited (w.e.f. 1-Jul-ll)
78. Den Steel City Cable Network Private Limited (w.e.f. 1-Jul-ll)
79. Crystal Vision Media Private Limited (w.e.f. 12- Jul-11)
80. Victor Cable TV Network Private Limited (w.e.f. 13-Jul-ll)
81. Sanmati Den Cable TV Network Private Limited (w.e.f. 25-Aug-ll)
82. Multi Channel Cable Network Private Limited (w.e.f. 1-Sep-ll)
83. Gemini Cable Network Private Limited (w.e.f. 1-Oct-ll)
84. Multi Star Cable Network Private Limited (w.e.f. 1-Oct-ll)
85. VM Magic Entertainment Private Limited (w.e.f. 1-Oct-ll)
86. Matrix Cable Network Private Limited (w.e.f. 1-Oct-ll)
87. Antique Communications Private Limited (w.e.f. 5-Dec-ll)
88. Sanmati Entertainment Private Limited (w.e.f. 26-Dec-ll)
89. Disk Cable Network Private Limited (w.e.f. 6-Jan-12)
90. Shaakumbari Den Media Private Limited (w.e.f. l-Feb-12)
91. Silverline Television Network Private Limited (w.e.f. 29-Mar-12)
ii. Subsidiaries held indirectly
1. Den Nanak Communication Private Limited (w.e.f. l-Mar-08)
2. DEN Saya Channel Network Private Limited (w.e.f. 30-Jun-08)
3. Den Ambey Citi Cable Network Private Limited (w.e.f. l-Feb-08)
4. Den Enjoy Navaratan Network Private Limited (w.e.f. 2-Apr-08)
5. Den Ambey Jhansi Cable Network Private Limited (w.e.f. l-Mar-09)
6. Den Deva Cable Network Private Limited (w.e.f. l-Apr-08)
7. DEN Faction Communication System Private Limited (w.e.f. l-Oct-08)
8. Den Ambey Farukabad Cable Network Private Limited (w.e.f. l-Mar-09)
9. Star Channel Den Network Private Limited (w.e.f. l-Aug-09)
10. Kishna Den Cable Networks Private Limited (w.e.f. l-Nov-09)
11. Divya Drishti Den Cable Network Private Limited (w.e.f. l-Apr-10)
12. DEN New Broad Communication Private Limited (w.e.f. l-Jul-10)
13. Astron Media Networks Private Limited (w.e.f. 27-Sep-10)
14. Fun Cable Network Private Limited (w.e.f. 15- Feb-11)
15. Rajasthan Entertainment Private Limited (w.e.f. 23-Feb-ll)
16. Kerela Entertainment Private Limited (w.e.f. 9-Dec-10)
17. Uttar Pradesh Digital Cable Network Private Limited (w.e.f.
4-Apr-ll)
18. Saturn Digital Cable Private Limited (w.e.f. 1-Jul-ll)
19. Den Enjoy SBNM Cable Network Private Limited (w.e.f. 11-Apr-ll)
20. Capital Entertainment Private Limited (w.e.f. 30-Dec-ll)
21. Bhadohi DEN Entertainment Private Limited (w.e.f. 5-Dec-ll)
22. Blossom Entertainment Private Limited (w.e.f. 31-Mar-12)
23. Rose Entertainment Private Limited (w.e.f. 31- Mar-12)
24. Trident Entertainment Private Limited (w.e.f. 31-Mar-12)
25. Eminent Cable Network Private Limited (w.e.f. 31-Mar-12)
b. Jointly controlled entity
1. Star Den Media Services Private Limited
2. Media Pro Enterprise India Private Limited
c. Entities under significant influence 1. Setpro 18 Distribution
Limited
d. Key managerial personnel 1. Mr. Sameer Manchanda
5. Deferred tax
a. Deferred tax assets and liabilities are being offset as they relate
to taxes on income levied by the same governing tax laws.
6. Operating Lease
The company has taken office premises and accommodation for its
employee under cancellable operating lease agreements. The lease rental
expense recognised in the profit and loss account for the year is Rs.
90.55 millions [Previous year Rs. 83.29 millions].
7. Disclosures as per the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006
As per information available with the management, the balance due to
enterprises covered under the MSMED Act, 2006 is Rs. Nil (Previous year Rs.
Nil) and no interest has been paid or is payable under the terms of the
MSMED Act, 2006.
8. Disclosure pursuant to Accounting Standard 15 (Revised 2005) on
'Employee Benefits' A. Defined contribution plans and state plans
The Company makes contribution toward the following defined
contribution for qualifying employees:
a. Employees'Provident Fund (EPF)
b. Employees' State Insurance (ESI)
c. Employees' Pension Scheme (EPS)
B. Defined benefit plan
Gratuity plan
The gratuity liability arises on retirement, withdrawal, resignation,
and death of an employee. The aforesaid liability is calculated on the
basis of 15 days salary (i.e. last drawn salary plus dearness
allowance) for each completed year of service or part thereof in excess
of 6 months, subject to a maximum ofRs. 1,000,000. Vesting occurs upon
completion of 5 years of service.
The present value of the defined benefit obligation and the related
current service cost are measured using the Projected Unit Credit
method with actuarial valuations being carried out at each balance
sheet date.
The following tables set out the status of the gratuity plan and
amounts recognised in the Company's financial statements as at 31
March, 2012.
9. Employee Stock Option Plan 2010 ("ESOP 2010")
a. The Company had established an Employee Stock Option Plan (ESOP
2010) in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 which have been approved by the Board of Directors and
the shareholders. A remuneration/ compensation committee comprising
majority of independent, non executive members of the Board of
Directors administers the ESOPs. All option under the ESOPs are
exercisable for equity shares. The Company has granted 5,000,000
equity options to eligible employees of the Company & directors of the
subsidiary Companies. During the financial year 2011-12,1,465,874
options have been surrendered by eligible employees & directors of the
subsidiary companies.
b. There shall be a minimum period of one year between the grant of
options and vesting of options. The vesting period may extend up to
three years. The vesting shall happen in one or more tranches as may be
decided by the Compensation/Remuneration Committee. The exercise period
of the options is a period of one year after the vesting of the
options. Each option is exercisable for one equity share ofRs. 10 each
fully paid up on payment of exercise price (as determined by the
remuneration/ compensation committee) of share determined with respect
to the date of grant. There are 2,233,813 options which are vested upto
31st March, 2012.
10. Earnings per equity share (EPS)
Basic earnings per share have been computed by dividing net profit
after tax and after dividend on cumulative convertible preference
shares by the weighted average number of equity shares outstanding for
the year. Convertible preference shares have been considered in
Diluted Earnings per Share computation.
11. Interest in Jointly Controlled entity
The Company has 50% interest in the assets, liabilities, expense and
income of Star Den Media Services Private Limited (Star DEN),
incorporated in India, which is involved in the business of
distribution of television channels.
12. The Revised Schedule VI has become effective from 1 April, 2011 for
the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped/ reclassified
wherever necessary to correspond with the current year's
classification/ disclosure.
Mar 31, 2011
1. Background
DEN Networks Limited (hereinafter referred to as 'the Company' or
'DEN') was incorporated on 10 July, 2007 to engage in cable television
distribution, broadband internet and other related business.
DEN is engaged in distribution of television channels through analog
and digital cable distribution network and provision of internet
services.
The Company changed its status from a Private Limited Company to a
Public Limited Company on 15 April, 2008 thereby changing its name to
DEN Digital Entertainment Networks Limited. Subsequently, the company
changed its name to DEN Networks Limited on 27 June, 2008.
During the financial year 2009-10, the Company issued and allotted
1,85,67,240 Equity Shares of face value of Rs. 10/- each, pursuant to
the Initial Public Offer (IPO), which were admitted for listing and
trading on Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE) with effect from November 24, 2009.
2. Secured Loans
a. Cash credit facilities of Rs. '(000) 285,966 [Previous year figures
Rs. '(000) 230,345] are secured by:
i. First pari passu charge on current and future book debts of the
Company.
ii. Second pari passu charge on all movable and immovable fixed assets
of the Company.
b. Out of total term loan of Rs. '(000) 1,253,785 [Previous year
figures Rs. '(000) 1,376,619] Rs. '(000) 1,123,742 [Previous year
figure Rs. '(000) 1,376,619] from bank is secured by:
i. First pari passu charge on all movable and immovable properties of
the Company both present and future;
c. Out of total term loan of Rs. '(000) 1,253,785 [Previous year
figures Rs. '(000) 1,376,619] Rs. '(000) 130,044 [Previous year figure
Rs. '(000) Nil] from bank is secured by:
i. First pari passu charge on all movable and immovable properties of
the Company both present and future;
ii. Second pari passu charge on all current assets of the Company;
d. Other loans from banks amounting to Rs. '(000) 7,279 [Previous year
figures Rs. '(000) 784] are secured by hypothecation of vehicles
financed by them.
e. The entire amount under cash credit and term loan facilities of Rs.
'(000) 527,400 [Previous year figure Rs. '(000) 1,606,964] is secured
by personal guarantee of Mr. Sameer Manchanda.
3. Capital Commitments and Contingent Liabilities
a. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. '(000) 541,794 [Previous year Rs. '(000)
71,503].
b. Contingent Liabilities
I. Guarantees issued by bankers outstanding as at the end of the year
end amounting to Rs. '(000) 41,775 [Previous year Rs. '(000) 41,725]
on account of license for internet use issued by the Department of
Telecommunications.
ii. Outstanding letters of credit as at the end of the year Rs. '(000)
294,510 [Previous year Rs. '(000) 140,887].
4. Segment Reporting
The company is engaged in the distribution & promotion of television
channels and related services which is considered as the only
reportable business segment. The Company's operations are based in
India. As the Company operates in a single business and geographical
segment, the reporting requirements for primary and secondary segment
disclosures prescribed by paragraphs 39 to 51 of Accounting Standard 17
-Segment Reporting, are not required to be disclosed in these financial
statements.
5. Related Party Disclosures i. List of related parties
a. Related parties where control exists
1 DEN Mahendra Satellite Private Limited (w.e.f. 27- Dec-07)
2 DEN Mod Max Cable Network Private Limited
(w.e.f. 27-Dec-07)
3 DEN Krishna Cable TV Network Private Limited (w.e.f. 27-Dec-07)
4 DEN Pawan Cable Network Private Limited (w.e.f. 27-Dec-07)
5 DEN BCN Suncity Network Private Limited (w.e.f. 27-Dec-07)
6 DEN Harsh Mann Cable Network Private Limited (w.e.f. 1-Mar-08)
7 DEN Classic Cable TV Services Private Limited (w.e.f. 1-May-08)
8 DEN Bindra Network Private Limited (w.e.f. 1-Jul-08)
9 DEN Montooshah Network Private Limited (w.e.f. 16-Jul-08)
10 DEN Ashu Cable Private Limited (w.e.f. 22-Aug-08)
11 DEN Shree Network Private Limited (w.e.f. 26-Sep-07)
12 Shree Siddhivinayak Cable Network Private Limited (w.e.f. 1-Dec-07)
13 Drashti Cable Network Private Limited (w.e.f. 1-Apr-08)
14 DEN MCN Cable Network Private Limited (w.e.f. 8-Apr-08)
15 Mahadev DEN Network Private Limited (w.e.f. 1-Feb-08)
16 Mahadev DEN Cable Network Private Limited (w.e.f. 1-Feb-08)
17 Mahadev DEN Cable Net Private Limited (w.e.f. 1-Feb-08)
18 DEN Digital Cable Network Private Limited (w.e.f. 1-May-08)
19 Malayalam Telenet Private Limited (w.e.f. 22-Aug-08)
20 DEN Bellary City Cable Private Limited (w.e.f. 1-Jan-09)
21 DEN-Manoranjan Satellite Private Limited (w.e.f. 1-Mar-08)
22 DEN Supreme Satellite Vision Private Limited (w.e.f. 30-May-08)
23 DEN Nashik City Cable Network Private Limited (w.e.f. 26-Jun-08)
24 Radiant Satellite (India) Private Limited (w.e.f. 2-Apr-08)
25 DEN Radiant Satelite Cable Network Private Limited (w.e.f. 2-Apr-08)
26 DEN Mewar Rajdev Cable Network Private Limited (w.e.f. 2-Apr-08)
27 DEN RIS Cable Network Private Limited (w.e.f. 1-Jun-08)
28 DEN Sky Media Network Private Limited (w.e.f. 31-May-08)
29 DEN Prince Network Private Limited (w.e.f. 1-Feb-08)
30 DEN Varun Cable Network Private Limited (w.e.f. 7-Jan-08)
31 DEN Crystal Vision Network Private Limited (w.e.f. 27-Dec-07)
32 Meerut Cable Network Private Limited (w.e.f. 1-Dec-07)
33 DEN Jai Ambey Vision Cable Private Limited (w.e.f. 5-Apr-08)
34 DEN Fateh Marketing Private Limited (w.e.f. 9-Apr-08)
35 DEN Prayag Cable Networks Private Limited (w.e.f. 1-Feb-08)
36 DEN Enjoy Cable Networks Private Limited (w.e.f. 2-Apr-08)
37 DEN Maa Sharda Vision Cable Networks Private Limited (w.e.f.
1-Apr-08)
38 DEN F K Cable TV Network Private Limited (w.e.f. 1-May-08)
39 DEN Shiva Cable Network Private Limited (w.e.f. 1-May-08)
40 DEN Pradeep Cable Network Private Limited (w.e.f. 1-Feb-08)
41 DEN Satellite Cable TV Network Private Limited (w.e.f. 1-Apr-08)
42 DEN Narmada Network Private Limited (w.e.f. 1-Sep-08)
43 DEN Ambey Cable Networks Private Limited (w.e.f. 11-Sep-07)
44 DEN Budaun Cable Network Private Limited (w.e.f. 1-Oct-08)
45 DEN Aman Entertainment Private Limited (w.e.f. 1-Oct-08)
46 DEN Kashi Cable Network Private Limited (w.e.f. 1-Mar-08)
47 DEN Futuristic Cable Networks Private Limited (w.e.f. 9-Oct-07)
48 DEN Digital Entertainment Gujarat Private Limited (w.e.f. 31-May-08)
49 Aster Entertainment Private Limited (w.e.f. 31-May-08)
50 DEN Entertainment Network Private Limited (w.e.f. 1-Sep-07)
51 Shine Cable Network Private Limited (w.e.f. 1-Dec-08)
52 Creative Cable Network (partnership firm) (w.e.f. 12-Oct-07)
53 Rajkot City Communication Private Limited (w.e.f. 10-Apr-09)
54 DEN Elgee Cable Vision Private Limited (w.e.f. 3-Jun-09)
55 DEN Malabar Cable Vision Private Limited (w.e.f. 30-Apr-09)
56 Amogh Broad Band Services Private Limited (w.e.f. 29-Jul-09)
57 Galaxy DEN Media & Entertainment Private Limited (w.e.f. 15-Jul-09)
58 DEN UCN Network India Private Limited (w.e.f. 25-Jul-09)
59 Bali DEN Cable Network Private Limited (w.e.f. 1-Sep-09)
60 Mahavir DEN Entertainment Private Limited (w.e.f. 1-Sep-09)
61 DEN Citi Channel Private Limited (w.e.f. 16-Nov-09)
62 DEN Satellite Network Private Limited (w.e.f. 15-Jan-10)
63 Fab DEN Network Private Limited (w.e.f. 1-Jan-10)
64 Fortune (Baroda) Network Private Limited (w.e.f. 31-Jul-09)
65 DEN Infoking Channel Entertainers Private Limited (w.e.f. 1-Aug-09)
66 United Cable Network (Digital) Private Limited (w.e.f. 1-Apr-10)
67 Shri Ram DEN Network Private Limited (w.e.f. 1-Apr-10)
68 DEN Krishna Vision Private Limited (w.e.f. 1-Apr-10)
69 CAB-I-NET Communications Private Limited (w.e.f. 1-May-10)
70 DEN Sahyog Cable Network Private Limited (w.e.f. 1-Jul-10)
71 DEN Sariga Communications Private Limited (w.e.f. 1-Aug-10)
72 IME Networks Private Limited (w.e.f. 27-Sep-10)
73 DEN Kattakada Telecasting and Cable Services Private Limited (w.e.f.
1-Oct-10)
74 DEN A.F. Communication Private Limited (w.e.f. 1-Dec-10)
75 Sree Gokulam Starnet Communication Private Limited (w.e.f.
24-Jan-11)
76 Big DEN Entertainment Private Limited (w.e.f. 1-Feb-11)
ii. Subsidiaries held indirectly
1 DEN Nanak Communication Private Limited (w.e.f. 1-Mar- 08)
2 DEN Saya Channel Network Private Limited (w.e.f. 30-Jun- 08)
3 DEN Ambey Citi Cable Network Private Limited (w.e.f. 1-Feb-08)
4 DEN Enjoy Navaratan Network Private Limited (w.e.f. 2-Apr-08)
5 DEN Ambey Jhansi Cable Network Private Limited (w.e.f. 1-Mar-09)
6 DEN Deva Cable Network Private Limited (w.e.f. 1-Apr- 08)
7 DEN Faction Communication System Private Limited (w.e.f. 1-Oct-08)
8 DEN Ambey Farukabad Cable Network Private Limited (w.e.f. 1-Mar-09)
9 Star Channel DEN Network Private Limited (w.e.f. 1-Aug-09)
10 Kishna DEN Cable Networks Private Limited (w.e.f. 1-Nov-09)
11 Divya Drishti DEN Cable Network Private Limited (w.e.f. 1- Apr-10)
12 DEN New Broad Communication Private Limited (we.f. 1-Jul-10)
13 Astron Media Networks Private Limited (we.f. 27-Sep-10)
14 Fun Cable Network Private Limited (w.e.f. 15-Feb-11)
15 Rajasthan Entertainment Private Limited (w.e.f. 23-Feb-11)
16 DEN BMC Cable Network Private Limited (w.e.f. 9-Dec-10)
b. Jointly Controlled Entity
1. Star Den Media Services Private Limited
c. Associates
1. Crystal Vision Media Private Limited
d. Entities under Significant Influence
1. Lucid Systems Private Limited
2. Setpro 18 Distribution Limited
3. Verve Engineering Private Limited
e. Key Managerial Personnel
1. Mr. Sameer Manchanda
6. Deferred Tax
a. Deferred tax assets and liabilities are being offset as they relate
to taxes on income levied by the same governing tax laws.
7. Operating Lease
The company has taken office premises and accommodation for its
employee under cancellable operating lease agreements. The lease rental
expense recognised in the profit and loss account for the year is Rs.
'(000) 83,287 [Previous year Rs. '(000) 86,578].
8. Investments
a. Subsidiary Companies
During the year, the company has acquired majority control in certain
companies through share subscription and share purchase agreements for
a total consideration of Rs. '(000) 1,323,358 [Previous year Rs. '(000)
912,136]. Of this, consideration payable on account of share purchase
agreements to the erstwhile shareholder at the year-end amounting to
Rs. '(000) 27,491 [Previous year Rs. '(000) 84,978] has been disclosed
under sundry creditors. The Company has sold investments in a company
during the year for total consideration of Rs. '(000) 9,142 [Previous
year Rs. '(000) 12,631].
The company has also advanced Rs. '(000) 82,925 [Previous year Rs.
'(000) 978,548] to acquire majority control in companies, the
agreements for which have not been concluded prior to the year-end.
Such balances have been disclosed under loans and advances. Balance
commitments on account of such agreements concluded / to be concluded
after the year end amount to Rs. '(000) 360,763 [Previous year Rs.
'(000) 670,688].
The Company has also advanced Rs. '(000) 110,645 [Previous year Rs.
'(000) Nil] for purchase of mutual fund units. These mutual fund units
were allotted on April 4, 2011.
9. Dividend on cumulative preference shares
Dividend on 0.001% cumulative preference shares amounts to Rs. '(000)
Nil (Previous year 1.49).
10. Disclosures as per the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006
As per information available with the management, the balance due to
enterprises covered under the MSMED Act, 2006 is Rs. Nil (Previous year
Rs. Nil) and no interest has been paid or is payable under the terms of
the MSMED Act, 2006.
11. Disclosure pursuant to Accounting Standard 15 (Revised 2005) on
'Employee Benefits' A. Defined contribution plans and state plans
The Company makes contribution toward the following defined
contribution for qualifying employees:
a. Employees' Provident Fund (EPF)
b. Employees' State Insurance (ESI)
c. Employees' Pension Scheme (EPS)
B. Defined Benefit Plan
Gratuity Plan
The gratuity liability arises on retirement, withdrawal, resignation,
and death of an employee. The aforesaid liability is calculated on the
basis of 15 days salary (i.e. last drawn salary plus dearness
allowance) for each completed year of service or part thereof in excess
of 6 months, subject to a maximum of Rs. 1,000,000. Vesting occurs upon
completion of 5 years of service.
The present value of the defined benefit obligation and the related
current service cost are measured using the Projected Unit Credit
method with actuarial valuations being carried out at each balance
sheet date.
The following tables set out the status of the gratuity plan and
amounts recognised in the Company's financial statements as at 31
March, 2011.
12. Employee Stock Option Plan 2010 ("ESOP 2010")
a. The Company had established an Employee Stock Option Plan (ESOP
2010) in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 which have been approved by the Board of Directors and
the shareholders. A remuneration/ compensation committee comprising
majority of independent, non executive members of the Board of
Directors administers the ESOPs. All option under the ESOPs are
exercisable for equity shares. The Company has granted 5,000,000 equity
options to eligible employees of the Company & directors of the
subsidiary Companies.
b. There shall be a minimum period of one year between the grant of
options and vesting of options. The vesting period may extend up to
three years. The vesting shall happen in one or more tranches as may be
decided by the Compensation/Remuneration Committee. The exercise period
of the options is a period of one year after the vesting of the
options. Each option is exercisable for one equity share of Rs. 10 each
fully paid up on payment of exercise price (as determined by the
remuneration/ compensation committee) of share determined with respect
to the date of grant. The Company has granted 5,000,000 options up to
31 March, 2011.
d. Pro forma Accounting for Stock Option Grants
The Company applies the intrinsic value-based method of accounting for
determining compensation cost for its stock-based compensation plan.
Had the compensation cost been determined using the fair value approach
the Company's net income and basic and diluted earning per share as
reported would have reduced to the pro forma amounts as indicated:
The Managing director was appointed vide a resolution passed by the
board of directors on 12 November, 2010. The provision for payment of
managerial remuneration for the year ended 31 March, 2011 as
recommended by the board of directors exceeded the limits prescribed
under section 198/309 read with schedule XIII of the Companies Act,
1956 and is subjected to the approval of Central Government. The
Company has applied to the Central Government for waiver of excess
remuneration paid to the managing director. However, permission is
still awaited.
13. Earnings per Equity Share (EPS)
Basic earnings per share have been computed by dividing net profit
after tax and after dividend on cumulative convertible preference
shares by the weighted average number of equity shares outstanding for
the year. Convertible preference shares have been considered in Diluted
Earnings per Share computation.
14. Previous year's figures have been regrouped/ reclassified, wherever
necessary to confirm to the current year's presentation.