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Notes to Accounts of Dish TV India Ltd.

Mar 31, 2023

Provisions, contingent liabilities, commitments and contingent assets

The Group recognises a provision when there is a present obligation as a result of a past event and it is more likely than
not that there will be an outflow of resources embodying economic benefits to settle such obligations and the amount of

such obligation can be reliably estimated. Provisions are discounted to their present value (where time value of money is
material) and are determined based on the management''s estimation of the outflow required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of
which will be confirmed only by the occurrence or non-occurrence of future events, not wholly within the control of the Group.
Contingent liabilities are also disclosed for the present obligations that have arisen from past events in respect of which it is not
probable that there will be an outflow of resources or a reliable estimate of the amount of obligation cannot be made.

When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related
asset is disclosed.

y) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of
the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at
fair value through profit or loss which are measured initially at fair value. However, trade receivables that do not contain
a significant financing component are measured at transaction price. Subsequent measurement of financial assets and
financial liabilities is described below.

Financial assets

Subsequent measurement

Financial asset at amortised cost - the financial instrument is measured at the amortised cost if both the following
conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (''SPPI'') on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest
rate (EIR) method.

Investments in equity instruments of subsidiaries and joint ventures

Investments in equity instruments of subsidiaries and joint ventures are accounted for at cost in accordance with Ind AS
27 Separate Financial Statements.

Investments in other equity instruments which are held for trading are classified as at fair value through profit or
loss (FVTPL). For all other equity instruments, the Group makes an irrevocable choice upon initial recognition, on an
instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVOCI)
or fair value through profit or loss (FVTPL).

Investments in mutual funds

Investments in mutual funds are measured at fair value through profit and loss (FVTPL).

Derivative instruments - derivatives such as options and forwards are carried at fair value through profit and loss with
fair gains/losses recognised in statement of profit and loss.

De-recognition of financial assets

A financial asset is primarily de-recognized when the rights to receive cash flows from the asset have expired or the
Group has transferred its rights to receive cash flows from the asset.

Financial liabilities

Subsequent measurement

Subsequent to initial recognition, all financial liabilities are measured at amortised cost using the effective interest method.
De-recognition of financial liabilities

A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in
the statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.

z) Fair value measurement

The Group measures financial instruments such as investments, at fair value at each balance sheet date. Fair value is the
price that would be received to sell an asset or paid to transfer a liability at the measurement date.

All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

aa) Cash and cash equivalents

Cash and cash equivalents comprises cash at bank and in hand, cheques in hand and short term investments that are
readily convertible into known amount of cash and are subject to an insignificant risk of change in value.

ab) Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Group are segregated based on the available information.

ac) Non-current assets held for sale and discontinued operations

An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only when
the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for
sale of such asset and its sale is highly probable. Management must be committed to sale which should be expected to
qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are presented separately and measured at the lower of their carrying
amounts immediately prior to their classification as held for sale and their fair value less costs to sell. However, some
held for sale assets such as financial assets, assets arising from employee benefits and deferred tax assets, continue to
be measured in accordance with the Group''s relevant accounting policy for those assets. Once classified as held for sale,
the assets are not subject to depreciation or amortisation.

A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale.
Profit or loss from discontinued operations comprise the post-tax profit or loss of discontinued operations and the post¬
tax gain or loss resulting from the measurement and disposal of assets classified as held for sale. Any profit or loss
arising from the sale or re-measurement of discontinued operations is presented as part of a single line item, profit or
loss from discontinued operations.

ad) Significant management judgement in applying accounting policies and estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements and the results of operations during the reporting periods.
Although these estimates are based upon management''s knowledge of current events and actions, actual results could
differ from those estimates and revisions, if any, are recognised in the current and future periods.

Significant management judgements

The following are significant management judgements in applying the accounting policies of the Group that have the most
significant effect on the financial statements.

Recognition of deferred tax assets: The extent to which deferred tax assets can be recognized is based on an assessment
of the probability of the future taxable income against which the deferred tax assets can be utilized.

Evaluation of indicators for impairment of assets: The evaluation of applicability of indicators of impairment of assets
requires assessment of several external and internal factors which could result in deterioration of recoverable amount
of the assets.

Classification of leases: The Group enters into leasing arrangements for various assets. The classification of the leasing
arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited
to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of
exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease
payments to fair value of leased asset and extent of specialized nature of the leased asset. The Group has also factored in
overall time period of rent agreements to arrive at lease period to recognise rental income on straight line basis.

Contingent liabilities: At each balance sheet date basis the management judgment, changes in facts and legal aspects,
the Group assesses the requirement of provisions against the outstanding warranties and guarantees. However, the
actual future outcome may be different from this judgement.

Significant estimates

Information about estimates and assumptions that have the most significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may be different.

Impairment of financial assets: At each balance sheet date, based on historical default rates observed over expected life,
the management assesses the expected credit loss on outstanding receivables.

Impairment of goodwill and other intangible assets: At each balance sheet date, goodwill is tested for impairment. The
recoverable amount of cash generating unit (CGU) is determined based on the higher of value-in-use and fair value less
cost to sell. Key assumptions on which the management has based its determination of recoverable amount include
estimated long-term growth rates, weighted average cost of capital and estimated operating margins. The cash flow
projections take into account past experience and represent the management''s best estimate about future developments.
Cash flow projections based on financial budgets are approved by management.

Defined benefit obligation (DBO): Management''s estimate of the DBO is based on a number of critical underlying
assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases.
Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Fair value measurements: Management applies valuation techniques to determine the fair value of financial instruments
(where active market quotes are not available). This involves developing estimates and assumptions consistent with how
market participants would price the instrument.

Useful lives of depreciable/amortisable assets: Management reviews its estimate of the useful lives of depreciable/
amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates
relate to technical and economic obsolescence that may change the utility of certain software, customer relationships, IT
equipment and other plant and equipment.


Mar 31, 2018

1. Background

Dish TV India Limited (‘Dish TV’ or ‘the Company’) was incorporated on 10 August 1988. The Company is engaged in the business of providing Direct to Home (‘DTH’) television and Teleport services. Dish TV is a public company incorporated and domiciled in India. Its registered office is at 18th floor, A Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai 400013, Maharashtra, India.

2. General information and statement of compliance with Indian Accounting Standards (Ind AS)

These standalone financial statements (‘financial statements’) of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS) as notified by Ministry of Corporate Affairs (‘MCA’) under section 133 of the Companies Act 2013 (the Act’) read with the Companies (Indian Accounting Standards) Rules 2015, as amended and other provisions of the Act . The Company has uniformly applied the accounting policies during the periods presented.

For all periods up to and including the year ended 31 March 2017, the Company had prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended 31 March 2018 are the first financial statements which the Company has prepared in accordance with Ind AS (see note 63 for explanation for transition to Ind AS). For the purpose of comparatives, financial statements for the year ended 31 March 2017 and opening balance sheet as at 1 April 2016 are also prepared as per Ind AS.

The standalone financial statement for the year ended 31 March 2018 were authorised and approved for issue by Board of Directors on May 29, 2018.

3. Recent accounting pronouncement

Standard issued but not yet effective

In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, Revenue from Contract with Customers. The amendments are in line with recent amenments made by International Accounting Standard Board (IASB). This amedment is applicable to the Company from 1 April 2018. The Company will be adopting the amendments from their effective date.

Ind AS 115, Revenue from Contracts with Customers:

Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. Ind AS 115 requires an entity to report information regarding nature, amount, timing and uncertainity of revenue and cash flows arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognise revenue that demonstrates the transfer of promised goods and services to the customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard can be applied either retrospectively to each prior period presented or can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the date of initial application of standard.

Based on the preliminary assessment performed by the Company, the impact of application of the Standard is not expected to be material.

* Represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the pervious GAAP have been disclosed for the purpose of better understanding of the original cost of assets.

$ please see detail as below:

Gross carrying value on disposal on account of business transfer agreement for the year ended 31 March 2018, Rs.17,400 for plant and equipments and Rs.40,564 for office equipment.

Accumulated depreciation on disposal/adjustment for the year ended 31 March 2017, Rs.13,782 for office equipment.

Accumulated depreciation on disposal on account of business transfer agreement for the year ended 31 March 2018, Rs.6,360 for office equipment and Rs.19,088 for furniture and fixtures.

Accumulated depreciation on disposal/adjustments for the year ended 31 March 2018, Rs.25,343 for office equipment.

Property, plant and equipment pledged as security

Refer note 27 for information on property, plant and equipment pledged as security by the Company.

Contractual obligation

Refer note 62(c) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

Discontinued operation

Depreciation for the current year includes depreciation for discontinued operations Rs.21,417 lacs.

Capitalised borrowing cost

No borrowing cost has been capitalised during the year ended 31 March 2018, 31 March 2017 and as at 1 April 2016.

Capital work in progress

Refer note 27 for information on capital work in progress pledged as security by the Company.

Discontinued operation

Disposal for the current year on account of discontinued operations Rs.6,285 lacs. (refer note 42)

Impairment testing

At each balance sheet date, goodwill is tested for impairment. The recoverable amount of cash generating unit (CGU) is determined based on the higher of value-in-use and fair value less cost to sell Key assumptions on which the management has based its determination of recoverable amount include estimated long-term growth rates, weighted average cost of capital and estimated operating margins. The cash flow projections take into account past experience and represent the management’s best estimate about future developments. Cash flow projections based on financial budgets are approved by management.

Contractual obligation

Refer note 62(c) for disclosure of contractual commitments for the acquisition of intangible assets.

Discontinued operation

Depreciation for the current year includes depreciation for discontinued operations Rs.775 lacs.

# The carrying values are considered to be reasonable approximation of fair values.

* Includes Rs.314,826 lacs from subsidiary company, Dish Infra Services Private Limited including Rs.201,940 lacs as consideration for business transfer (refer note 42).

b) Detail of shares not fully paid-up

14,567 (31 March 2017: 15,262 and 1 April 2016: 15,383) equity shares of Rs.1 each, Rs.0.75 paid up.

19,115 ( 31 March 2017: 19,115 and 1 April 2016: 19,115) equity shares of Rs.1 each, Rs.0.50 paid up.

c) Rights, preferences, restrictions attached to the equity shares

The Company has only one class of equity shares, having a par value of Rs.1 per share. Each shareholder is eligible to one vote per fully paid equity share held (i.e. in proportion to the paid up shares in equity capital). The dividend proposed, if any, by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Shareholding disclosed above does not include shares issued but kept in abeyance as at the balance sheet date due to the reasons stated in foot note (h) below.

* In terms of the Scheme (refer note 41), the Board of Directors of the Company at their meeting held on 26 March 2018 issued and allotted equity shares to the shareholders of Videocon D2H Limited (D2H), including Deutsche Bank Trust Company Americas, which held the underlying equity shares of D2H against which American Depositary Shares (“ADSs”) were issued and listed on Nasdaq Global Market (“Nasdaq”). In terms of the Scheme, the said ADSs were to be voluntarily delisted from Nasdaq. Accordingly, the said ADS were delisted from Nasdaq and in terms of the Scheme, the ADS holders of D2H were issued Global Depositary Receipts (the “GDRs”) of Dish TV India Limited. However, the process of cancellation of ADS and issuance of GDRs of the Company was completed post 31 March 2018 and accordingly, pending completion of entire process, the equity shares issued to Deutsche Bank Trust Company Americas in its capacity as a “trustee” are disclosed as holders of the shares of the Company as on 31 March 2018. Subsequent to the year-end, ADS holders have been issued GDRs with shares of the Company as their underlying.

e) Subscribed and fully paid up shares include:

2,606,880 (31 March 2017: 2,561,510 and 1 April 2016: 2,457,440) equity shares of Rs.1 each, fully paid up, issued to the employees, under Employee Stock Option Plan, i.e., ESOP 2007.

f) 4,282,228 (31 March 2017: 4,282,228 and 1 April 2016: 4,282,228) equity shares of Rs.1 each are reserved for issue under Employee Stock Option Plan 2007. (refer note 49 for terms and amount etc.)

g) Aggregate number of bonus share issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

(i) The Company has issued 857,785,642 numbers of shares under the scheme of merger (refer note 41), out of which 775,256,159 numbers of shares have been allotted during the year without payment being received in cash (also refer footnote h below); and

(ii) No share has been alloted by way of bonus issues and no share has been bought back in the current year and preceding five year

h) The allotment of 82,529,483 equity shares of the Company has been kept in abeyance, due to litigation, till such time the claim over the title of the share is ascertained by appropriate statutory or judicial bodies.

Nature and purpose of other reserves Retained earnings

All the profits made by the Company are transferred to the retained earnings from statement of profit and loss

Securities premium account

Securities premium reserve represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act.

General reserve

Balance pursuant to the scheme of arrangement and re organisation of share capital as approved by Hon’ble high court of judicature at Bombay and high court of judicature at New delhi vide their order dated 12 January 2007 and 19 January 2007 respectively.

Shares Options Outstanding Account

The reserve account is used to recognise the amortisation of grant date fair value of options issued to employees (including employees of subsidiary company) under employee stock option plan over the vesting period.

Other component of equity

The shares issued under merger but not allotted are kept in abeyance.

Repayment term of outstanding long term borrowings (including current maturities) as at 31 March 2018, 31 March 2017 and 1 April 2016

(i) Loan outstanding Rs.24 lacs carrying interest rate @ 11.95% per annum, is repayable in 4 quarterly instalment of Rs.7 lacs (including interest) each with last instalment payable on 5 January 2019

(ii) Loan outstanding Rs.91 lacs carrying interest rate @ 11.95% per annum, is repayable in 4 quarterly instalment of Rs.24 lacs (including interest) each with last instalment payable on 11 January 2019

(iii) Loan outstanding Rs.140 lacs carrying interest rate @ 11.95% per annum, is repayable in 4 quarterly instalment of Rs.38 lacs (including interest) each with last instalment payable on 22 January 2019

(iv) Loan outstanding Rs.65 lacs carrying interest rate @ 11.95% per annum, is repayable in 4 quarterly instalment of Rs.17 lacs (including interest) each with last instalment payable on 18 January 2019

(v) Loan outstanding Rs.175 lacs carrying interest rate @ 11.95% per annum, is repayable in 5 quarterly instalment of Rs.38 lacs (including interest) each with last instalment payable on 24 May 2019

(vi) Loan outstanding Rs.738 lacs carrying interest rate @ 11.44% per annum, is repayable in 7 quarterly instalment of Rs.118 lacs (including interest) each with last instalment payable on 16 October 2019

(vii) Loan outstanding Rs.123 lacs carrying interest rate @ 11.95% per annum, is repayable in 6 quarterly instalment of Rs.23 lacs (including interest) each with last instalment payable on 20 July 2019

(viii) Loan outstanding Rs.698 lacs carrying interest rate @ 11.44% per annum, is repayable in 7 quarterly instalment of Rs.111 lacs (including interest) each with last instalment payable on 17 November 2019

(ix) Loan outstanding Rs.352 lacs carrying interest rate @ 11.44% per annum, is repayable in 7 quarterly instalment of Rs.49 lacs (including interest) each with last instalment payable on 23 December 2019.

Bill discounting facility, having outstanding amount of Rs.12,403 lacs as at 31 March 2018, assumed under the scheme of arrangement (refer note 41), were secured by the first pari-passu charge on the present and future current assets of the transferor company, first pari-passu charge on movable / immovable fixed assets of the transferor company and were also secured by personal guarantee of promoter of transferor company. Pursuant to the National Company Law Tribunal (NCLT) order dated 27 July 2018, all guarantees and securities provided by transferor company shall stand transferred to and vested in the transferee company upon the scheme of arrangement came into effect on the effective date. The Company is in the process of getting the aforementioned transfers effected in the records of the lenders. Also refer note 55.

This facility carries rate of interest ranging from 10.75% p.a. to 12.5% p.a.

4. The Board of Directors, at their meeting held on 23 May 2016, had approved adjustment of entire securities premium account against the accumulated losses, through Capital reduction under section 100 to 104 of the Companies Act, 1956 read with section 52 of the Companies Act, 2013. The Company received observation letter(s) from National Stock Exchange of India Limited and BSE Limited dated 14 July 2016 and 15 July 2016 respectively, confirming their No Objection to the said proposal. The Shareholders of the Company also accorded their approval vide special resolution dated 19 September 2016. The Hon’ble National Company Law Tribunal, Mumbai Bench (‘NCLT’) vide its order dated 28 June 2017 approved the reduction of Share Capital of the Company by way of utilising the amount standing to the credit of the Securities Premium Account for writing off deficit in the statement of Profit and Loss Account of the Company. The Company has completed the necessary filings with Registrar of Companies. Accordingly, the entire Securities Premium account amounting to Rs.154,340 lacs as on 31 March 2016, has been reduced for writing off deficit in the accumulated balance of retained earnings of the Company during year ended 31 March 2018.

5. Business Combination

A. Scheme of arrangement

The Board of Directors at their meeting held on 11 November 2016 had approved the “Scheme of Arrangement” to merge Videocon D2H Limited (“Videocon D2H”), a company engaged in providing direct to home television services through a network of distributors & direct dealers (‘Transferor company’) with Dish TV India Limited (‘Transferee company’) under Section 391 read with Section 394 of the Companies Act, 1956 and / or applicable Sections of the Companies Act 2013 with effect from 1 October 2017, (“the Appointed Date”) subject to obtaining necessary approvals of the Shareholders, National company Law Tribunal (NCLT) and regulatory authorities.

The proposed merger was to enable consolidation of the business and operations of the transferor and transferee company which could provide substantial impetus to growth, enable synergies, reduce operation costs, as a result of pooling of financial, managerial and technical resources and technology of both the companies, significantly contributing to the future growth and maximising the shareholder value.

The said scheme received the approval of the NCLT vide orders passed on 27 July 2017 which was subject to obtaining approvals from Competition Commission of India, Ministry of Information and Broadcasting, Securities and Exchange Board of India and Stock Exchanges. The company obtained required approvals from the aforementioned authorities and submitted relevant documents to the Ministry of Corporate Affairs on 22 March 2018 which was the effective date of the merger.

The business combination was considered from the appointed date as approved by the Hon’ble NCLT, viz 1 October 2017. Such date has been considered as the acquisition date for the purpose of Ind AS 103 Business Combination.

The fair value of 857,785,642 number of equity shares of Dish TV India Limited (‘the company’) issued as consideration paid for Videocon D2H Rs.642,053 lacs was based on the quoted price of equity shares of the company on 29 September 2017 as last traded prior to Sunday, 1 October 2017 i.e. acquisition date.

Acquisition-related cost

The Company incurred acquisition related cost of Rs.5,672 lacs on legal fees and other due diligence costs. These costs have been included in “legal and professional fee” in statement of profit and loss and in operating cash flows in the statement of cash flows.

Identifiable assets acquired and liabilities assumed

The following table summaries the recognised amounts of assets acquired and liabilities assumed at the date of acquisition i.e. 1 October 2017

Note A:

Land-operating lease (leasehold land) disclosed above is located at Plot No. 1D, Udyog Vihar Industrial Area, Greater Noida, Dist. Gautam Budh Nagar, U.P.-201301 having a carrying value of Rs.2,460 lacs as at 31 March 2018, net of lease rentals charged upto 31 March 2018 of Rs.17 lacs (gross value of Rs.2,477 lacs), acquired pursuant to business combination, title deeds of which are in the name of Videocon d2h Limited. The Company plans to get the registration transferred in its name in due course. Total carrying value of such land aggregating Rs.2,460 lacs is included under prepaid expenses of Rs.2,426 lacs and Rs.34 lacs under non-current assets and current assets as at 31 March 2018. Building constructed on this land which is also acquired as part of the business combination (included under property, plant and equipment above) has a carrying value of Rs.2,435 as at 31 March 2018 for which, in the opinion of the management, no separate registration is required to be done in the name of the Company.

The fair value of acquired trade receivable is Rs.2,693 lacs. The gross contractual amount for trade receivable due is Rs.3,365 lacs of which Rs.672 lacs is doubtful to be collected.

Note B : Measurement of fair values

The valuation technique used for measuring the fair value of material assets acquired were as follows :

For period ended 31 March 2018 (1 October 2017 to 31 March 2018), Videocon D2H contributed revenue of Rs.171,241 lacs and profit before tax of Rs.11,185 lacs to the company’s results.

I f the acquisition had occurred on 1 April 2017, management estimates that revenue of combined entities that is Dish TV India Limited and erstwhile Videocon D2H would have been Rs.518,846 lacs and combined profit before tax would have been Rs.6,697 lacs.

6. Slump Sale

The Board of directors approved a Business Transfer Agreement (BTA) between the Company and Dish Infra Services Private Limited (Dish Infra), a wholly owned subsidiary of the Company on 26 March 2018. The BTA became effective on closing of business hours of 31 March 2018 upon receipt of consent of the members of the Company.

Pursuant to the said BTA, the Company has transferred its infra support service business acquired as a part of merger with Videocon D2H to Dish Infra on a going concern basis by way of slump sale, with effect from closing of business hours of 31 March 2018. The assets and liabilities were transferred at carrying value as at 31 March 2018.

The BTA as referred to in note 42 above, became effective on closing of business hours of 31 March 2018 and has been disclosed as discontinued operation.

Financial performance and cash flow information

The financial performance and cash flow information presented are for six months ended 31 March 2018.

7. During the year ended 31 March 2017, the Company had incorporated a joint venture with Siti Networks Limited (SITI Cable Network Limited), namely C&S Medianet Private Limited. The Company holds 48% of the equity share capital.

8. With effect from 9 November 2016, the registered office of the Company had shifted from Delhi to the State of Maharashtra at Mumbai, by passing special resolution to alter the provisions of its Memorandum of Association with respect to the place of the Registered Office and such alteration having been confirmed vide an order dated 28 October 2016 of the Regional Director, Northern Region.

9. With effect from 1 April 2016, the Company changed its business policy and started recovering entertainment tax from its subscribers and then paying it to the relevant authorities, therefore, entertainment tax has been netted off from subscription revenue for the period 1 April 2016 to 30 June 2017.

10. The Company has advanced loans, classified under long term loans and advances, to Dish T V Lanka Private Limited (“Dish Lanka”), its subsidiary company, which has incurred losses and its net worth has been eroded. The management is in the process of implementing certain changes to its business strategy in Sri Lankan market and based on future business plans and projections, believes that the subsidiary would turn around in future and accordingly, the loan given to this subsidiary has been considered good for recovery.

11. Segmental information

In line with the provisions of Ind AS 108 “Operating segments” and based on review of the operations done by the chief operating decision maker (CODM), the operations of the Company fall under Direct to Home (‘DTH’) and teleport services, which is considered to be the only reportable segment by the CODM.

12. Employee stock option plan (ESOP) 2007

At the Annual General Meeting held on 3 August 2007, the shareholders of the Company had approved Employee Stock Option Plan, i.e., ESOP 2007 (“the Scheme”). The Scheme provided for issuance of 4,282,228 stock options (underlying fully paid equity share of Rs.1 each) to the employees of the Company as well as that of its subsidiaries of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 [‘SEBI (ESOP) Guidelines, 1999’].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the outstanding options were re-priced at Rs.37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999.

The activity relating to the options granted and movements therein are set out below:

13. Disclosure pursuant to Indian Accounting Standard 19 on “Employee Benefits”

Defined contribution plans

An amount of Rs.463 lacs (previous year Rs.275 lacs) and Rs.5 lacs (previous year Rs.2 lacs) for the year, have been recognised as expenses in respect of the Company’s contributions to Provident Fund and Employee’s State Insurance Fund respectively, deposited with the government authorities and have been included under “Employee benefits expenses”.

Defined benefit plans

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company’s Scheme, whichever is more beneficial. The gratuity plan is partly funded and the company has made contribution to the recognised funds in India.

Risk Exposure

The defined benefit plans are typically based on certain assumptions and expose company to various risk as follows:

a) Salary Risk - Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

b) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

c) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan’s liability.

d) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

e) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan’s liability.

The following table sets forth the status of the gratuity plan of the Company and the amounts recognised in the Balance Sheet and Statement of Profit and Loss:

iii) Major categories of plan assets

The Company’s plan assets primary comprise of qualifying insurance policies issued by life insurance corporation of India amounting to Rs.375 lacs (previous year nil) for defined benefit obligation.

Discount rate: The discount rate is estimated based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligation.

Salary escalation rate: The estimates of salary increases, considered in actuarial valuation, take account of inflation, promotion and other relevant factors.

Other long term employment benefits

The liability towards compensated absence for the year ended 31 March 2018 base on the actuarial valuation carried out by using projected unit credit method stood at Rs.508 lacs (previous year Rs.331 lacs).

14. Financial instruments by category

A. Fair value hierarchy

The financial assets and liabilities measured at fair value in the statement of financial position are divided in to three levels of fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: the fair value of financial instruments that are not traded in active market is determined using valuation technique which maximise the use of observable market data rely as low as possible on entity specific estimate.

Level 3: if one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.

B. Fair value of financial assets measured at fair value through Other Comprehensive Income

The above disclosures are presented for non-current financial assets and liabilities. The carrying value of current financial assets and liabilities (cash and cash equivalents, trade receivables, other receivables, trade payables and other current financial liabilities) represents the best estimate of fair value.

B. Risk management

The Company is exposed to various risk in relation to financial instruments. The main types of risks are credit risk, liquidity risk and market risk.

The Company’s risk management is coordinated in close co-operation with the board of directors, and focuses on securing Company’s short to medium term cash flows.

This note explains the sources of risk which the Company is exposed to and how the Company manages the risk and the related impact in these standalone financial statements.

a) Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation to the company causing a financial loss. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost.

Credit risk management

Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets. The Company continuously monitors defaults of the counterparties and incorporates this information into its credit risk controls.

A: Low credit risk B: Moderate credit risk C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Concentration of trade receivables

The Company has widespread customers and there is no concentration of trade receivables.

b) Expected credit losses

The company recognises lifetime expected credit losses on trade receivables using a simplified approach and uses historical information to arrive at loss percentage relevant to each category of trade receivables.

Expected credit loss for trade receivables and other financial assets under simplified approach

c) Liquidity risk

Liquidity risk is the risk that suitable sources of funding for the Company’s business activities may not be available. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. Short term liquidity requirements comprises mainly of trade payables and employee dues arising during normal course of business as on each balance sheet date. Long- term liquidity requirement is assessed by the management on periodical basis and is managed through internal accruals and through funding commitments from shareholders.

f) Market Risk

i. Foreign currency risk

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency.

ii. Interest rate risk Liabilities

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

a) Interest rate risk exposure

The exposure of the Company’s borrowing to interest rate changes at the end of the reporting period are as follows:

b) Sensitivity

The Company has only fixed rate borrowing and same are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rate.

Assets

The company’s fixed deposits are carried at fixed rate. Therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.

iii. Price risk

The exposure to price risk arises from investments held by the Company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

Further the company is not exposed to any price risk as none of the equity securities held by the company are classified as fair value through profit and loss or fair value through OCI.

15. Capital Management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value.

As at 31 March, 2018, the Company has only one class of equity shares and has reasonable debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

The major components of income tax expense and the reconciliation of expense based on the domestic effective tax rate of at 34.608% and the reported tax expense in statement of profit or loss are as follows:

16. Leases

a) Obligation on operating lease:-

The Company’s significant leasing arrangements are in respect of operating leases taken for offices, residential premises, transponder, etc. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The initial tenure of the lease generally is for 11 months to 73 years. The details of assets taken on operating leases during the year are as under:

b) Assets given under operating lease

Pursuant to merger of company with Videocon D2H, the company acquired certain assets which were leased out by way of operating lease. These were further transferred to Dish Infra services private limited by way of business transfer agreement.

The lease rental income recognised during the year in respect of non-cancellable operating leases are as follows:

17. a) The Company has been making payment of license fee to the Ministry of Information and Broadcasting considering the present legal understanding. However, in view of the ongoing dispute (refer note (b) below), the Company has recognised provision considering the terms and conditions of the License given by the Regulatory Authority.-

The outflow of economic benefits with regard to the disputed portion would be dependent on the final decision by the Regulatory Authority. Presently, it has been classified under the ‘Provisions (Current’

b) The Company has filed Petition (205(C) of 2014) before the Hon’ble Telecom Disputes Settlement & Appellate Tribunal (TDSAT) against Union of India challenging the propriety and legality of the demand of Rs.62,420 lacs including interest of Rs.15,967 lacs raised by the Ministry of Information and Broadcasting (MIB) by way of a demand letter dated 19 March 2014 towards alleged short payment of license fee for the period 2003-2004 to 2012-2013. The matter is pending before the TDSAT.

Further pursuant to scheme of merger, Company has assumed deemed liability of Rs.13,104 lacs including interest of Rs.2,724 lacs which was raised by the MIB on transferor company by way of demand letter dated 24 March 2014 towards alleged short payment of license fee for the period 2009-10 to 2012-13. Transferor company had filed petition (204(C) of 2014) before the TDSAT against Union of India challenging the propriety and legality of the demand. The matter is pending before the TDSAT

15. Rights issue

The Company during the financial year ended 31 March 2009 issued 518,149,592 equity shares of Rs.1 each at a premium of Rs.21 per share for cash to the existing equity shareholders on the record date. The terms of payment were as under:

Upto the financial year ended 31 March 2018, the Company has received Rs.31,089 lacs (previous year Rs.31,089 lacs) towards the application money on 518,149,592 (previous year 518,149,592) equity shares issued on Rights basis; Rs.41,450 lacs (previous year Rs.41,450 lacs) towards the first call money on 518,130,477 (previous year 518,130,477) equity shares; and Rs.41,450 lacs (previous years Rs.41,450 lacs) towards the second and final call money on 518,115,910 (previous year 518,115,215) equity shares.

The Company has also received Rs.0.42 Lacs (previous year Rs.0.42 lacs) towards first call and/ or second and final call. Pending completion of corporate action, the amount has been recorded as “money received against partly paid up shares” under ‘Other Equity’.

The utilisation of Rights Issue proceeds have been in accordance with the revised manner of usage of Rights Issue proceeds, as approved by the Board of Directors of the Company, in their meeting held on 28 May 2009. The utilisation of the Rights Issue proceeds as per the revised usage aggregating to Rs.113,989 lacs (previous year Rs.113,989 lacs) is as under.

The details of utilisation of Rights Issue proceeds by the Company, on an overall basis, are as below:

16. Issue of Global Depository Receipts (GDR Issue):

Pursuant to the approvals obtained by the Company and in accordance with the applicable laws including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on 23 November 2009 at a price of US $ 854.50 per GDR, each GDR representing 1000 fully paid equity shares. The pricing of the GDR, as per the pricing formula prescribed under Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs.39.80 per fully paid equity share and the relevant date for this purpose was 23 November 2009.

Upon opening, the GDR issue for USD 1,000 lacs (approx.) was fully subscribed and the Company received USD 1,000 lacs (approx.), towards the subscription money. The Issue Committee of the Board at its meeting held on 30 November 2009, issued and allotted 117,035,000 fully paid equity shares @ Rs.39.80 per fully paid equity share to M/s Deutsche Bank Trust Company Americas (being the depository) in lieu of the GDR issued. The GDR’s were listed at the Luxembourg Stock Exchange.

During the year ended 31 March 2013, 32,000 GDRs were cancelled and converted in to 32,000,000 equity shares of Rs.1 each by the holder and during the year ended 31 March 2016, 85,035 GDRs were sold in the domestic market and converted into 85,035,000 equity shares of Rs.1 each by the holder and accordingly GDR outstanding thereafter are nil.

Other than above, the Company has certain litigations involving customers and based on the legal advise of in-house legal team, the management believe that no material liability will devolve on the Company in respect of these litigations.

Income tax

In earlier years, the Company had received demand notices for Tax Deducted at Source (‘TDS’) and interest thereon amounting to Rs.760 lacs (excluding penalty levied amounting Rs.16 lacs) relating to matters pertaining to alleged short deduction of tax at source on certain payments for the assessment years 2009-10 to 2013-14. In respect of the demand received the Company had made payment under protest of Rs.726 lacs out of which Rs.39 lacs had been paid in the year ended 31 March 2017 and remaining was paid in the previous years. Further, the amount paid under protest, as a matter of abandoned caution, based on management estimate has been provided for in the books. Accordingly, the remaining amount Rs.34 lacs has been included under the head contingent liabilities above. However, the Company has disputed all these matters and filed appeal against the above said demands with the tax authorities.

During the year, contingent liability on account of demand notices for TDS and interest there amounting Rs.619 lacs (net of provision of Rs.125 lacs, amount paid under protest) is assumed by the Company as part of the merger with Videocon d2h Limited.

Further, for the assessment year 2004-05, in an income tax case of Siti Cable Network Limited (a unit of which was merged with the Company), demand under section 271(1)(c) amounting Rs.263 lacs on account of additions of loans and advances and bandwidth charges has been raised by assessing officer vide order dated 29 March 2016. The Company has preferred an appeal before higher appellate authorities on 29 April 2016 and same is pending for disposal.

Sales tax, value added tax, entry tax, service tax, entertainment tax and other claims

The Company has received notices / assessment orders in relation to applicability of above-mentioned taxes. The Company has contested these notices at various Appellate Forums / Courts and the matter is subjudice. Further, Company has assumed the contingent liability in relation to above-mentioned taxes as part of the merger with Videocon d2h Limited.

Based on the advice from independent tax experts, and development on the appeals, the Company is confident that the additional tax so demanded will not be sustained on the completion of appellate proceedings and accordingly, pending the decisions by the appellate authorities, no provision has been made in these financial statements.

d) Others

i) In August 2016, the Hon’ble Delhi High Court (HC) passed an order restraining the Company from operation in MENA (Middle East and North Africa) region, on a plea brought by the UAE-based company Gulf DTH FZ LLC, about copyright infringement by Dish TV in the region. An application for interim stay filed by Gulf DTH FZ LLC has been allowed by the Single Judge Bench of High Court vide its order dated 30 August 2016 which was further confirmed by Division Bench of Hon’ble High Court. The Company has filed appeals against the said order and same is pending for disposal. Based on management’s assessment and independent expert’s advice, the Company believes no significant claim will devolve upon the Company and no provision has been recognised.

ii) In terms of the letter dated 31 March 2017 of the Ministry of Information & Broadcasting, Government of India (MIB), the DTH license of the Company was valid upto 31 December 2017 or till the date of notification of ‘New DTH guidelines’, whichever is earlier, under the terms and conditions mentioned in the said letter. The Company has submitted a letter to the MIB for the DTH License and is awaiting the communication from MIB.

iii) The Directorate of Revenue Intelligence (DRI), Bangalore, u/s 108 of the Custom Act, 1962, is inquiring about the classification of viewing cards for applicability of customs duty. Whilst no demand has been received so far, the Company has, suo-moto, paid Rs.600 lacs under protest. The management believes that no liability will devolve on the Company.

17. First time adoption of Ind AS

Transition to Ind AS

These are the Company’s first standalone financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 3 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS standalone balance sheet at 1 April 2016 (the date of transition). In preparing its opening Ind AS standalone balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

Use of deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

Use of deemed cost for investments in subsidiaries and jointly ventures

The balance of the investment in subsidiaries and jointly controlled entities at the date of transition to Ind AS, determined in accordance with the previous GAAP as the deemed cost of the investment at initial recognition.

Exchange differences on long-term foreign currency monetary items

Under previous GAAP, the company applied paragraph 46A of AS 11 whereby exchange differences arising from translation of long-term foreign currency monetary items were capitalized/ deferred. On transition to Ind AS first time adopter is permitted to continue policy adopted for accounting for such exchange differences recognised in the previous GAAP financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period.

Under previous GAAP foreign exchange gain/ loss on long term foreign currency monetary items recognized upto 31 March, 2016 has been deferred/ capitalized. Such exchange differences arising on translation/settlement of long-term foreign currency monetary items and pertaining to the acquisition of a depreciable asset are amortised over the remaining useful lives of the assets. From accounting periods commencing on or after April 01, 2017, exchange differences arising on translation/ settlement of longterm foreign currency monetary items, acquired post April 01, 2017, pertaining to the acquisition of a depreciable asset are charged to the statement of profit and loss.

B. Ind AS mandatory exceptions Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

I nd AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP Investment in equity instruments carried at FVTPL or FVOCI.

Impairment of financial assets based on expected credit loss model.

Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when an entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) The effects of the retrospective application or retrospective restatement are not determinable;

b) The retrospective application or restatement requires assumptions about what management’s intent would have been in that period

The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity and total comprehensive income for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Note A

The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purpose of this note.

Note 1: Property, plant and equipment

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

Note 2: Investment

Under the previous GAAP, no adjustment was recognised on account of financial guarantee provided by parent company on behalf of subsidiary company so Investment was shown at cost. Ind AS 109 requires the guarantor to recognise the financial guarantee contract initially at its fair value and consider it as capital contribution by parent company. Accordingly the company has recognised a liability in its separate financial statements for the fair value of the financial guarantee given and subsequent recognition of income on a straight line basis and considered this as a deemed capital contribution by company in its subsidiary.

Note 3: Deferred Tax

Retained earnings has been adjusted consequent to the Ind AS transition adjustments with corresponding impact to deferred tax, wherever applicable.

Note 4: Retained earnings

Retained earnings as at 1 April 2016 has been adjusted consequent to all the Ind AS transition adjustments.

Note 5: Remeasurements of post-employment

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these measurements were forming part of the profit or loss for the year, accordingly an adjustment has been done to reinstate the employee benefit cost for financial year 2016-17 by the amount pertainig to actuarial gain and loss and same has been shown as other comprehensive income in the statement of Profit and Loss.

Note 6: Prior period item

Under Ind AS 8, financial statements are restated retrospectively for correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred. Accordingly an adjustment has been made in the financial statement to take above impact.

Under previous GAAP prior period items were included in determination of net profits in which error pertaining to prior period were identified. Under Ind AS, such items have been adjusted retrospectively by reinstating the amounts for respective periods to which such errors related to, with the impact of such errors, if any, adjusted with balances as at 1 April 2016 in case these pertain to period prior to that date. Following is the impact:

Note 7: Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit obligation on account of actuarial gain and loss (Net of taxes)

Note 8: Employee Stock option plan

Under the previous GAAP, the Company had the option to measure the cost of equity-settled employee share-based plan either using the intrinsic value method or using the fair value method. Under Ind AS, the cost of equity-settled share-based plan is recognised based on the fair value of the options as at the grant date. accordingly ESOPs has been measures at fair value and additional cost on account of employee cost has been recognised in the statement of profit and loss.

Note 9:

(a) Financial assets at amortised cost

Under previous GAAP, financial assets and security deposits paid were initially recognised at transaction price. Subsequently, any finance income were recognised based on contractual terms.

Under Ind AS, such financial instruments are initially recognised at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value affects profit and loss unless it quantifies for recognition as some other type of asset.

(b) Financial liabilities at amortised cost

Under previous GAAP, financial liabilities were initially recognised at transaction price. Subsequently, any finance costs were recognised based on contractual terms. Under Ind AS, such financial instruments are initially recognised at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value affects profit and loss unless it quantifies for recognition as some other type of liability.

18. In accordance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (‘CSR’) Committee. In terms with the provisions of the said Act, the Company was to spend a sum of approx Rs.431 lacs during the year ended 31 March 2018 (previous year Rs.189 lacs) towards CSR activities. The details of amount actually paid by the Company are:

19. Particulars of loans, guarantee or investment under section 186 of the Companies Act 2013.

The Company has provided following loans, guarantee or investment pursuant to section 186 of Companies Act, 2013.

Security or guarantee against loan

During the current year Company has given guarantees on behalf of Dish Infra Services Private Limited to various banks amounting to Rs.250,438 lacs (Previous year Rs.278,710 lacs) for loan facility obtained by Dish Infra

Services Private Limited.

Investment

There are no investments by the Company other than those stated under Note 9 in the Financial Statements.

Note

All the loans are provided for business purposes of respective entities.

20. Disclosure pursuant to schedule V of Securities and Exchange Board of India (Listing Obligation and Disclosure requirements) regulations, 2015.


Mar 31, 2017

1. Background

Dish TV India Limited (‘Dish TV’ or ‘the Company’) was incorporated on 10 August 1988. The Company is engaged in the business of providing Direct to Home (‘DTH’) and Teleport services.

2. a) During the previous year ended 31 March 2016, pursuant to resolution approved by shareholder through postal ballot on 3 February 2015 the Company had entered into Business Transfer Agreement (dated 25 February 2015) with Dish Infra Services Private Limited (Dish Infra), for transfer of its Non-core business on ‘Slump Sale’ basis w.e.f.1 April 2015. As per the terms of the agreement Dish Infra undertook following activities of the Company providing support services for satellite based communication services, broadcasting content services, management of hard assets like CPEs and their installation, value added services, etc.

b) As per the Valuation Report obtained from Independent valuers, the Enterprise value of Non-core Business was valued at Rs.165,961 Lacs and the Company had received cash consideration amounting to Rs.507 lacs from Dish Infra Services Private Limited, which is arrived after adjusting Closing Net Debt and difference between Closing Working Capital and Base Working Capital on the Transfer Date. The surplus arising on slump sale of Non-core Business was Rs.358 lacs as included in the financial statements under note 20.

Following assets and liabilities were transferred from Dish TV India Limited to Dish Infra Services Private Limited w.e.f. 1 April 2016.

c) In reference to term loan and buyers credit related to non-core business, the Company had entered into novation agreement with banks to transfer its debt to its subsidiary company Dish Infra Services Private Limited w.e.f 1 April 2015.

3. The Board of Directors at their meeting held on 23 May 2016 had approved adjustment of entire securities premium account against the accumulated losses, through Capital reduction under section 100 to 104 of the Companies Act, 1956 read with section 52 of the Companies Act, 2013. The Company has received observation letter(s) from NSE (National Stock Exchange of India Limited) and BSE (BSE Limited) dated 14 July 2016 and 15July 2016 respectively, confirming their No Objection. The Shareholders of the Company have also accorded their approval vide special resolution dated 19 September 2016. The Company had filed an application with the Hon’ble National Company Law Tribunal, Mumbai Bench (NCLT) on 13January 2017. The proposed adjustment of entire securities premium account against the accumulated losses is subject to final approval of NCLT and accordingly has not been accounted for in these financial statements.

4. During the year ended 31 March 2017, the Company has incorporated a new joint venture with Siticable Network Limited, namely C&S Medianet Private Limited. The Company holds 48% of the equity share capital.

5. With effect from 09 November 2016, the Registered Office of the Company has shifted from Delhi to the State of Maharashtra at Mumbai, by passing special resolution to alter the provisions of its Memorandum of Association with respect to the place of the Registered Office and such alteration having been confirmed vide an order dated 28 October 2016 of the Regional Director, Northern Region.

6. The Board of Directors at their meeting held on 11 November 2016 approved a Scheme of Arrangement (Scheme) under section 391 to 394 of Companies Act 1956 and/or applicable sections of Companies Act 2013, among Dish TV India Limited (DTIL) and Videocon DTH Limited (VD2H) and their respective Shareholders and Creditors inter alia for amalgamation of the VD2H into and with the DTIL, pursuant to the relevant provision of the Companies Act and relevant provisions of the scheme, and various other matters consequential or otherwise integrally connected therewith.

The Company has received observation letter(s) dated 1 March 2017 and 2 March 2017 from NSE (National Stock Exchange of India Limited) and BSE (BSE Limited) respectively, confirming their No Objection to the said Scheme. Further, the Competition Commission of India (CCI), in its meeting held on 4 May 2017, has accorded its approval for the said combination. The Company has filed an application with Hon’ble National Company Law Tribunal, Mumbai Bench (NCLT) on 10 March 2017 and vide its order dated 22 March 2017 the Company had convened a Meeting of Shareholders who have accorded their approval to the said Scheme vide resolution dated 12 May 2017 pursuant to the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 / 1956. Post the said approval, the Company has filed a Petition with NCLT on 19 May 2017 for final direction. The said scheme of arrangement is subject to requisite approval of NCLT and other approvals (regulatory or otherwise) and accordingly no impact has been given in these financial statements.

7. With effect from 01 April 2016, the Company has changed its business policy and started recovering entertainment tax from its subscribers and then paying it to the relevant authorities, therefore, entertainment tax has been netted off from subscription revenue.

8. Employee stock option plan (ESOP) 2007

At the Annual General Meeting held on 3 August 2007, the shareholders of the Company had approved Employee Stock Option Plan, i.e., ESOP 2007 (“the Scheme”). The Scheme provided for issuance of 4,282,228 stock options (underlying fully paid equity share of Rs.1 each) to the employees of the Company as well as that of its subsidiaries of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 [‘SEBI (ESOP) Guidelines, 1999’].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the outstanding options were re-priced at Rs.37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999. Further, since the Company follows intrinsic value method for accounting of the above options, there is no charge in the Statement of Profit and Loss.

The activity relating to the options granted and movements therein are set out below:

As permitted by the Guidance Note on accounting for Employee Share - based Payment, issued by the Institute of Chartered Accountants of India, the Company has elected to account for stock options based on their intrinsic value (i.e., the excess of fair market value of the underlying share over the exercise price) at the grant date rather than their fair value at that date. Had the compensation cost for employee stock options been determined on the basis of the fair value method as described in the said Guidance Note, the impact on the Company’s net profit after tax and basic/diluted earnings per share would have been as stated below.

* Additional compensation cost had the Company recorded employee stock option expenses based on the fair value of option (using black scholes method)

For purposes of the above proforma disclosures, the fair values are measured based on the Black-Scholes-Merton formula. Expected volatility, an input in this formula, is estimated by considering historic average share price volatility. The inputs used in the measurement of grant-date fair values are as follows:

9. Disclosure pursuant to Accounting Standard 15 on “Employee Benefits”

Defined contribution plans

An amount of Rs.275 lacs (previous year Rs.240 lacs) and Rs.2 lac (previous year Rs.1 lacs) for the year, have been recognized as expenses in respect of the Company’s contributions to Provident Fund and Employee’s State Insurance Fund respectively, deposited with the government authorities and have been included under “Employee benefits expenses”.

Defined benefit plans

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company’s Scheme, whichever is more beneficial.

The following table sets forth the status of the gratuity plan of the Company and the amounts recognised in the Balance Sheet and Statement of Profit and Loss:

Discount rate: The discount rate is estimated based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligation.

Salary escalation rate: The estimates of salary increases, considered in actuarial valuation, take account of inflation, promotion and other relevant factors.

The best estimate of expected contributions for Defined Benefit Plan for the next financial year will be Rs.244 lacs.

10. Segmental information

The Company is in the business of providing Direct to Home (‘DTH’) and teleport services primarily in India. As the Company’s business activity primarily falls within a single business and geographical segment, disclosures in terms of Accounting Standard 17 on “Segment Reporting” are not applicable.

11. Related party disclosures

a) Related parties where control exists: Subsidiary companies:

Dish T V Lanka (Private) Limited.

Dish Infra Services Private Limited (formerly known as Xingmedia Distribution Private Limited)

Joint Venture:

C&S Medianet Private Limited

b) Other related parties with whom the Company had transactions:

c) Transactions during the year with related parties:

12. Leases

Obligation on operating lease:-

The Company’s significant leasing arrangements are in respect of operating leases taken for offices, residential premises, transponder, etc. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessee and the lessor.The initial tenure of the lease generally is for 11 months to 69 months.The details of assets taken on operating leases during the year are as under:

13. a) The Company has been making payment of license fee to the Ministry of Information and Broadcasting considering the present legal understanding. However, in view of the ongoing dispute (refer note (b) below), the Company has made provision on a conservative basis considering the terms and conditions of the License given by the Regulatory Authority.-

The outflow of economic benefits with regard to the disputed portion would be dependent on the final decision by the Regulatory Authority. Presently, it has been considered under the ‘Short-term provisions’.

b) The Company has filed Petition (205(C) of 2014) before the Hon’ble Telecom Disputes Settlement & Appellate Tribunal (TDSAT) against union of India challenging the propriety and legality of the demand of Rs.62,420 lacs including interest of Rs.15,967 lacs raised by the Ministry of Information and Broadcasting (MIB) by way of a demand letter dated 19 March 2014 towards alleged short payment of license fee for the period 2003-2004 to 2012-2013. The matter is pending before the TDSAT.

14. Rights issue

The Company during the financial year ended 31 March 2009 issued 518,149,592 equity shares of Rs.1 each at a premium of Rs.21 per share for cash to the existing equity shareholders on the record date. The terms of payment were as under:

Upto the financial year ended 31 March 2017, the Company has received Rs.31,089 lacs (previous year Rs.31,089 lacs) towards the application money on 518,149,592 (previous year 518,149,592) equity shares issued on Rights basis; Rs.41,450 lacs (previous year Rs.41,450 lacs) towards the first call money on 518,130,477 (previous year 518,130,477) equity shares; and Rs.41,450 lacs (previous years Rs.41,450 lacs) towards the second and final call money on 518,115,215 (previous year 518,115,094) equity shares.

The Company has also received Rs.0.42 Lacs (previous year Rs.0.42 lacs) towards first call and/ or second and final call. Pending completion of corporate action, the amount has been recorded as Share call money pending adjustments under ‘Other long term liabilities.

The utilisation of Rights Issue proceeds have been in accordance with the revised manner of usage of Rights Issue proceeds, as approved by the Board of Directors of the Company, in their meeting held on 28 May 2009. The utilization of the Rights Issue proceeds as per the revised usage aggregating to Rs.113,989 lacs (previous year Rs.113,989 lacs) is as under. The monitoring agency, IDBI Bank Limited, has issued its report dated 25th January 2016 on utilization of the Rights Issue proceeds upto 31 December 2016.

The details of utilisationof Rights Issue proceeds by the Company, on an overall basis, are as below:

15. Issue of Global Depository Receipts (GDR Issuer-

Pursuant to the approvals obtained by the Company and in accordance with the applicable laws including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on 23 November 2009 at a price of US $ 854.50 per GDR, each GDR representing 1000 fully paid equity shares. The pricing of the GDR, as per the pricing formula prescribed under Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs.39.80 per fully paid equity share and the relevant date for this purpose was 23 November 2009.

Upon opening, the GDR issue for USD 1,000lacs (approx.) was fully subscribed and the Company received USD1,000lacs (approx.), towards the subscription money. Upon receipt of the subscription money, the Issue Committee of the Board at its meeting held on 30 November 2009, issued and allotted 117,035,000 fully paid equity shares @ Rs.39.80 per fully paid equity share to M/s Deutsche Bank Trust Company Americas (being the depository) in lieu of the Global Depository Receipts issued. The GDR’s were listed at the Luxembourg Stock Exchange.

During the year ended 31 March 2016, 85,035 GDRs were sold into the domestic market and converted into 85,035,000 equity shares of Re 1 each by the holder and accordingly GDR outstanding thereafter are nil.

16. Foreign currency transactions

Foreign currency transactions outstanding as on the balance sheet date that are not hedged by derivative instruments or otherwise are as under.

17. Contingent liabilities, litigations and commitments

a) Claims against the Company (including unasserted claims) not acknowledged as debt:

Other than above, the Company has certain litigations involving customers and based on the legal advise of in-house legal team, the management believe that no material liability will devolve on the Company in respect of these litigations.

Income tax

In earlier years, the Company had received demand notices for TDS and interest thereon amounting to Rs.760 lacs (excluding penalty levied amounting Rs.16 lacs) relating to matters pertaining to alleged short deduction of tax at source on certain payments for the Assessment Year’s 2009-10 to 2013-14. In respect of the demand received the Company had made payment under protest of Rs.726 lacs out of which Rs.141 lacs had been paid in the FY 2015-16 and Rs.39 lacs has been paid in the year ended 31 March 2017 and remaining was paid in the previous years. Further, the amount paid under protest, as a matter of abandoned caution, based on management estimate has been provided for in the books. Accordingly, the remaining amount Rs.34 lacs has been included under the head contingent liabilities above. However, the Company has disputed all these matters and filed appeal against the above said demands with the tax authorities.

Further, for the assessment year 2004-05, in case of Siti Cable Network Limited (now merged with the Company), demand under section 271(1)(c) amounting Rs.263 lacs on account of additions of loans and advances and bandwidth charges has been raised by assessing officer vide order dated 29 March 2016. The Company has preferred an appeal before higher appellate authorities on 29 April 2016 and same is pending for disposal.

Sales tax, value added tax, entry tax, service tax, entertainment tax and other claims

The Company has received notices / assessment orders in relation to applicability of above-mentioned taxes. The Company has contested these notices at various Appellate Forums / Courts and the matter is subjudice. Based on the advice from independent tax experts, and development on the appeals, the Company is confident that the additional tax so demanded will not be sustained on the completion of appellate proceedings and accordingly, pending the decisions by the appellate authorities, no provision has been made in these financial statements.

b) Guarantees

c) Commitments

d) Others

i) During the year, the Delhi High Court (HC) passed an order retraining the Company from operation in MENA (Middle East and North Africa) region, on a plea brought by the UAE-based company Gulf DTH FZ, about copyright infringement by Dish TV in the region. An application for interim stay filed by Gulf DTH FZ lLC has been allowed by the Single Judge Bench of High Court vide its order dated 30 August 2016 which is further confirmed by Division Bench of High Court. The Company has filed appeals against the said order and same is pending for disposal. Based on management’s assessment and independent expert’s advice, the Company believes no significant claim will devolve upon the Company and no provision has been recognised.

ii) The Company’s DTH license was valid upto 30 September 2013. Ministry of Information and Broadcasting (MIB) has been extending the validity of the DTH License on yearly basis and as per the letter dated 31 March 2017of the MIB, the DTH License is valid upto 31 December 2017.

iii) Management believes that it is appropriate to prepare these financial statements on a going concern basis considering available resources, current level of operations of the Company, and those projected for foreseeable future.

18. Particulars of loans, guarantee or investment under section 186 of the Companies Act 2013.

The Company has provided following loans, guarantee or investment pursuant to section 186 of Companies Act, 2013.

Note:

All the loans are provided for business purposes of respective entities.

Security or guarantee against loan

During the current year Company has given guarantees on behalf of Dish Infra Services Private Limited to various banks amounting to Rs.278,710 lacs (Previous year Rs.234,083 lacs) for loan facility obtained by Dish Infra Services Private Limited.

Investment

There are no investments by the Company other than those stated under Note 13 in the Financial Statements.

19. Disclosure pursuant to schedule V of Securities and Exchange Board of India (Listing Obligation and Disclosure requirements) regulations, 2015.

20. In accordance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (‘CSR’) Committee. In terms with the provisions of the said Act, the Company was to spend a sum of approx Rs.189 lacs during the year ended 31 March 2017 (previous year Nil) towards CSR activities. The details of amount actually paid by the Company are:

21. The Company has advanced loans, classified under long term loans and advances, to Dish T V Lanka Private Limited (“Dish Lanka”), its subsidiary company, which has incurred losses and its net worth has been eroded. The management is in the process of implementing certain changes to its business strategy in Sri Lankan market and based on future business plans and projections, believes that the subsidiary would turn around in future and accordingly, the loan given to this subsidiary has been considered good for recovery.

22. Figures of the previous year have been regrouped / rearranged, wherever considered necessary to conform to the current year’s presentation.


Mar 31, 2015

1. a) Dish Infra Services Private Limited (Dish Infra) (formerly known as Xingmedia Distribution Private Limited) was incorporated on 13 February 2014 under the Companies Act, 1956. Consequent upon the approval of the Board of Directors and Shareholders of the Company, the entire share capital of Dish Infra, comprising of 10,000 equity shares having face value of Rs. 10 each, was acquired by the Company at Rs. 100,000. Accordingly, Dish Infra became the wholly owned subsidiary of the Company on 24 March 2014. Subsequently, upon the approval of the Board of Directors, the Company had subscribed to additional 118,000,000 equity shares of Dish Infra at Rs. 10 per equity share.

b) The Board of Directors of the Company, in its meeting held on 26 August 2014, passed resolutions approving the transfer of the Non-core business to Dish Infra. Further, on 3 February 2015 the shareholders of the Company, through Postal ballot, have approved necessary resolutions for the transfer of Non-core business.

Post approvals, the Company entered into the Business Transfer Agreement (dated 25 February 2015) with Dish Infra, for transfer of its Non-core business on 'Slump Sale' basis w.e.f. 1 April 2015 As per the terms of the agreement Dish Infra shall undertake activities of the Company which would include providing support services for satellite based communication services, broadcasting content services, management of hard assets like CPEs and their installation, value added services, etc. and the Company shall receive net consideration of Rs. 507 lacs from Dish Infra Services Private Limited, in terms of Business Transfer Agreement.

* As per the practice followed by the Company for preparation of its financial statements for financial reporting purposes, its present system of maintenance of books of account and other relevant records do not provide clearly identifiable cash flow from operating activities/Investing activities/ financing activities and hence the same has not been disclosed above.

2. employee stock option plan (esop) 2007

At the Annual General Meeting held on 3 August 2007, the shareholders of the Company had approved Employee Stock Option Plan, i.e., ESOP 2007 ("the Scheme"). The Scheme provided for issuance of 4,282,228 stock options (underlying fully paid equity share of Re.1 each) to the employees of the Company as well as that of its subsidiaries of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ['SEBI (ESOP) Guidelines, 1999'].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the outstanding options were re-priced at Rs. 37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999. Further, since the Company follows intrinsic value method for accounting of the above options, there is no charge in the Statement of Profit and Loss.

3. segmental information

The Company is in the business of providing Direct to Home ('DTH') and teleport services primarily in India. As the Company's business activity primarily falls within a single business and geographical segment, disclosures in terms of Accounting Standard 17 on "Segment Reporting" are not applicable.

e) Guarantees etc. given by related parties in respect of secured loans:

i) As at 31 March 2015, personal guarantees by key managerial personal amounting to Rs. 30,000 lacs (previous year Rs. 30,000 lacs) and corporate guarantee by Sprit Textiles Private Limited amounting to Rs. 30,000 lacs (previous year Rs. 30,000 lacs by Churu Trading Company Private Limited) are outstanding as at the year end.

ii) As at 31 March 2015, corporate guarantee by Direct Media Distribution Ventures Private Limited amounting to Rs. 60,000 lacs (previous year Rs. 60,000 lacs) are outstanding at the year end.

iii) As at 31 March 2015, corporate guarantee by Zee Entertainment Enterprises Limited amounting to Rs. Nil (previous year Rs. 4,174 lacs) is outstanding as at the year end.

4. Contingent liabilities and commitments

a) Contingent liabilities

Particulars As at As at 31 March 2015 31 March 2014

Claims against the Company not acknowledged as debt 489 483

Income-tax (refer note 47b) 225 102

Sales tax and Value Added tax 2,053 1,772

Customs duty 795 795

Service tax* 7,195 5,721

Wealth tax 2 2

Entertainment tax (refer note 47c) 1,828 1,339

Legal cases including from customers against the Company unascertained Unascertained * Penalty not ascertainable.

b) During the year ended 31 March 2011, the Company received a demand notice for income tax and interest thereon aggregating Rs. 4,056 lacs in relation to assessment year 2009-10. During the year ended 31 March 2012, the assessing authority had reduced the demand to Rs. 2,642 lacs on the basis of application for rectification filed by the Company. The Company deposited Rs. 730 lacs during the previous years. The matter pertains to alleged short deduction of tax at source on certain payments and interest thereon for delayed period. The Company had disputed the issue and has filed an appeal against the above said demand with the tax authorities. The Company had also submitted with the tax authorities the requisite supporting documents/clarification from vendors during the previous year.

During the year ended 31 March 2014 & 31 March 2015, the Company received a demand notice for income tax and interest thereon aggregating Rs. 110 lacs & 123 lacs (respectively) in relation to assessment year 2011-12, 2012-13 & 2013-14. The Company had deposited Rs. 18 lacs during the previous years, and is required to deposit additional 96 lacs to be paid under protest. The matter pertains to alleged short deduction of tax at source on certain payments and interest thereon for delayed period. The Company had disputed the issue and has filed an appeal against the above said demand with the tax authorities. The Company had also submitted with the tax authorities the requisite supporting documents/clarification from vendors during the previous year. The Company, supported by legal case laws in the said matter, is of the view that outcome of the litigation will not have significant impact on the financial statements.

c) The Company has received notices in various States on applicability of Entertainment Tax, for which no demands have been received. The Company has contested these notices at various Appellate Forums/ Courts and the matter is subjudice.

d) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the company has reviewed and ensured that adequate provision as required under the law / Accounting Standards for the material foreseeable losses on such long term contract (including derivative contracts) has been made in the books of accounts.

e) The Company has earned Subscription income from overseas and is evaluating the related compliances and adjustments, if any

f) Commitments

Particulars As at As at 31 March 2015 31 March 2014

Estimated amount of contracts remaining to be executed on capital account 26,309 17,810

5. During the financial year 2011-12, the Company migrated from the fixed fee agreement with ESPN Software India Private Limited (ESPN) to the Reference Interconnect Offer (RIO) based agreement for its content fees. Upon refusal by the ESPN to the said migration, the Company approached the Telecom Dispute Settlement Appellate Tribunal (TDSAT). The TDSAT, vide its judgment dated 10 April 2012, allowed the Company to pay the content fees to ESPN w.e.f. 1 September 2011 on the basis of RIO rates published by ESPN and also allowed the Company a refund of any amount representing the difference between the amount paid by the Company as per the fixed fee agreement and the amount payable under the RIO rates w.e.f. 1 September 2011. ESPN filed a Special Leave Petition before the Hon'ble Supreme Court. The Hon'ble Supreme Court, vide its order dated 17 July 2012 refused to grant interim stay on the order of the Hon'ble TDSAT. The said appeal is still pending before the Hon'ble Supreme Court.

Further, during the previous year, a petition was filed by the Company against ESPN in TDSAT against the public notices dated 5 November 2012 and 12 November 2012 issued by them for disconnection of their channels from Dish TV DTH platform. TDSAT vide its order dated 23 November 2012 granted an interim stay on the operation of the said notices and subsequently, vide judgment dated 25 April 2014 has held that the manner of distribution of channels by Dish TV was as per the regulations. It has directed the parties to conduct a reconciliation in terms of the said judgment. ESPN filed an appeal before the Hon'ble Supreme Court. Vide order dated 09 May 2014, no stay against Dish TV was granted by the Hon'ble Supreme Court. The said appeal is still pending before the Hon'ble Supreme Court.

6. The life of the Consumer Premises Equipment (CPE) for the purposes of depreciation has been estimated by the management as five years. Upto 31 March 2012, in certain cases, the one-time advance contribution towards the CPEs in the form of rental was being recognized over a period of three years from the activation date.

However, such practice, with effect from 1 April 2012, was changed to five years in respect of CPEs activated on or after 1 April 2012. During the previous year, Company had amended its policy in respect of CPEs activated upto 31 March 2012 also in order to align the same with the CPEs installed thereafter. The correction in the policy had resulted in reversal of excess revenue of Rs. 12,930 lacs and excess provisions of license fee of Rs. 1,293 lacs recognised upto 31 March 2013 during the previous year. This had also resulted in revenue for the previous year being higher by Rs. 3,702 lacs and license fee being higher by Rs. 370 lacs. The above correction had resulted into the net loss for the year ended 31 March 2014 being higher by Rs. 8,305 lacs.

7. Hitherto, upto the year ended 31 March 2013, the Company recognized a portion of the activation fees over the estimated period of subscription/ the life of the CPE. During the previous year, the Company had reassessed its position of recognition of above activation fees, together with the level of service already rendered on activation, the corresponding cost incurred and separate consideration charged for the subsequent continuing services etc. Considering that the Company incurs significant upfront cost upto the stage of activation of CPE and charges separate consideration for subsequent continuing services, the Company had, in order to make better and appropriate presentation, amended its policy of revenue recognition of activation fee on an upfront basis.

The above change had resulted into additional activation / subscription revenue of Rs. 9,936 lacs for the previous year (including Rs. 4,614 lacs in relation to the financial year ended 31 March 2013) with a corresponding increase in license fees of Rs. 994 lacs (including Rs. 461 lacs in relation to the financial year ended 31 March 2013). As a consequence, the loss after tax for the previous year was lower by Rs. 8,942 lacs

8. Figures of the previous year have been regrouped / rearranged, wherever considered necessary to conform to the current year's presentation.


Mar 31, 2014

1. Background

Dish TV India Limited (''Dish TV'' or ''the Company'') was incorporated on 10 August 1988. The Company is engaged in the business of Direct to Home (''DTH'') and Teleport services. The DTH services are rendered to the customers through Consumer Premise Equipment (CPE), used for receiving and broadcasting DTH signals to the subscriber.

2. Employee stock option plan (ESOP) 2007

At the Annual General Meeting held on 3 August 2007, the shareholders of the Company had approved Employee Stock Option Plan, i.e., ESOP 2007 ("the Scheme"). The Scheme provided for issuance of 4,282,228 stock options (underlying fully paid equity share of Re.1 each) to the employees of the Company as well as that of its subsidiaries and also to independent directors of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 [''SEBI (ESOP) Guidelines, 1999''].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the outstanding options were re-priced at Rs. 37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999. Further, since the Company follows intrinsic value method for accounting of the above options, there is no charge in the Statement of profit and Loss.

3. Disclosure pursuant to Accounting Standard 15 on "Employee benefits"

Defined contribution plans

An amount of Rs. 475 lacs (previous year Rs. 430 lacs) and Rs. 4 lacs (previous year Rs. 5 lacs) for the year, have been recognized as expenses in respect of the Company''s contributions to Provident Fund and Employee''s State Insurance Fund respectively, deposited with the government authorities and have been included under "Employee benefits expenses".

Defined benefit plans

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company''s Scheme, whichever is more beneficial.

The following table sets forth the status of the gratuity plan of the Company and the amounts recognised in the Balance Sheet and Statement of profit and Loss:

4. Segmental information

The Company is in the business of providing Direct to Home (''DTH'') and teleport services primarily in India. As the Company''s business activity primarily falls within a single business and geographical segment, disclosures in terms of Accounting Standard 17 on "Segment Reporting" are not applicable.

5. Related party disclosures-

a) Related parties where control exists:

Holding company:

Direct Media Distribution Ventures Private Limited (formerly known as Dhaka Warriors Sports Private Limited) (with effect from 26 December 2011 upto 30 March 2013)

Subsidiary companies:

Digital Network Distribution PTE Limited (upto 1 April 2013)

Dish T V Lanka (Private) Limited (with effect from 25 April 2012)

Xingmedia Distribution Private Limited (with effect from 24 March 2014)

b) Other related parties with whom the Company had transactions:

Key management personnel

Mr. Jawahar Lal Goel

Relative of key

management

personnel

Mr. Gaurav Goel

Enterprises over which key management personnel/ their relatives have significant infuence

Agrani Convergence Limited

ASC Telecommunication Private Limited

Asia Today Limited

Cyquator Media Services Private Limited (referred to as Cyquator)

Diligent Media Corporation Limited /Dakshin Media Gaming Solutions Private Limited (Dakshin Media Gaming Solutions Private Limited merged with Diligent Media Corporation Limited pursuant to a scheme of amalgamation)

E-City Property Management & Services Private Limited

E-City Bioscope Entertainment Private Limited

Essel Agro Private Limited

Essel Corporate Resources Private Limited

Essel International Limited

ITZ Cash Card Limited

Interactive Finance & Trading Services Private Limited

Media Pro Enterprise India Private Limited

PAN India Network Infravest Private Limited

PAN India Network Limited

PAN India Paryatan Private Limited

Procall Private Limited

Rama Associates Limited

Siti Cable Network Limited

Taj Television India Private Limited

Zee Aakash News Private Limited

Zee Entertainment Enterprises Limited

ZEE Media Corporation Limited (formerly known as Zee News Limited)

ZEE Teleflms Middle East Fz LLC

6. Leases

a) Obligation on operating lease:-

The Company''s significant leasing arrangements are in respect of operating leases taken for offices, residential premises, transponder, etc. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The initial tenure of the lease generally is for 11 months to 69 months. The details of assets taken on operating leases during the year are as under:

7. a) The Company has been making payment of license fee to the Regulatory Authority considering the present legal understanding. However, in view of the ongoing dispute, the Company has made provision on a conservative basis considering the terms and conditions of the License given by the Regulatory Authority

b) During the year 2013-14, the Company received a demand notice from the Ministry of Information and Broadcasting (''MIB'') whereunder a demand of Rs. 62,420 lacs (including interest) has been raised towards the DTH License Fee. The Company has challenged the demand before the Hon''ble Telecom Dispute Settlement Appellate Tribunal (''TDSAT'') and the Hon''ble TDSAT has directed the MIB not to enforce the demand till the next order.

8. Issue of Global Depository Receipts (GDR Issue):

Pursuant to the approvals obtained by the Company and in accordance with the applicable laws including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on 23 November 2009 at a price of US $ 854.50 per GDR, each GDR representing 1000 fully paid equity shares. The pricing of the GDR, as per the pricing formula prescribed under Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs. 39.80 per fully paid equity share and the relevant date for this purpose was 23 November 2009.

Upon opening, the GDR issue for USD 1,000 lacs (approx) was fully subscribed and the Company received USD 1,000 lacs (approx), towards the subscription money. Upon receipt of the subscription money, the Issue Committee of the Board at its meeting held on 30 November 2009, issued and allotted 117,035,000 fully paid equity shares @ Rs. 39.80 per fully paid equity share to M/s Deutsche Bank Trust Company Americas (being the depository) in lieu of the Global Depository Receipts issued. The GDR''s are listed at the Luxembourg Stock Exchange.

During the previous year ended 31 March 2013, 32,000 GDR''s were cancelled and converted into 32,000,000 equity shares of Re. 1 each by the holder and accordingly, the GDRs outstanding thereafter are 85,035, each GDR representing 1,000 fully paid equity shares.

9. Foreign currency transactions-

a) In accordance with the Accounting Standard 11 (AS-11) and related notifcations, the foreign currency exchange loss of Rs. 16,541 lacs has been adjusted (previous year foreign currency exchange loss of Rs. 12,467 lacs) in the value of fixed assets and the foreign currency exchange loss of Rs. 684 lacs (previous year foreign currency exchange gain of Rs. 51 lacs) in the capital work in progress.

b) i) The Company has outstanding forward contracts of US Dollars 11 lacs (previous year US Dollar 70 lacs) at fixed amount of Rs. 677 lacs (previous year Rs. 3,879 lacs) which will be settled at a future date. These derivative contracts are for the repayment of Buyers'' credit loans.

10. Contingent liabilities and commitments

a) Contingent liabilities

Particulars As at As at 31 March 2014 31 March 2013

Claims against the Company not acknowledged as debt 483 483

Income-tax (refer note 47b) 102 2,652

Sales tax and Value Added tax 1,772 1,046

Customs duty 795 795

Service tax 5,721 5,721

Wealth tax 2 2

Entertainment tax (refer note 47c) 1,339 1,279

Legal cases including from customers against the Company Unascertained Unascertained

b) During the year ended 31 March 2011, the Company received a demand notice for income tax and interest thereon aggregating Rs. 4,056 lacs in relation to assessment year 2009-10. During the year ended 31 March 2012, the assessing authority had reduced the demand to Rs. 2,642 lacs on the basis of application for rectifcation fled by the Company. The Company deposited Rs. 730 lacs during the previous years. The matter pertains to alleged short deduction of tax at source on certain payments and interest thereon for delayed period. The Company had disputed the issue and has fled an appeal against the above said demand with the tax authorities. The Company had also submitted with the tax authorities the requisite supporting documents/clarifcation from vendors during the previous year.

During the year, the appeal is partly allowed in favour of the Company and demand has been reduced to Rs. 225 lacs. The Company has further fled an appeal before Income Tax Appellate Tribunal (ITAT) on same matter of short deduction of tax at source. The Company, supported by legal view in the matter, is of the view that outcome of the litigation will not have significant impact on the financial statements.

c) The Company has received notices in various States on applicability of Entertainment Tax, for which no demands have been received. The Company has contested these notices at various Appellate Forums/ Courts and the matter is subjudice.

11. The life of the Consumer Premises Equipment (CPE) for the purposes of depreciation has been estimated by the management as five years. Upto 31 March 2012, in certain cases, the one-time advance contribution towards the CPEs in the form of rental was being recognized over a period of three years from the activation date.

However, such practice, with effect from 1 April 2012, was changed to five years in respect of CPEs activated on or after 1 April 2012. During the year, Company has amended its policy in respect of CPEs activated upto 31 March 2012 also in order to align the same with the CPEs installed thereafter. The correction in the policy has resulted in reversal of excess revenue of Rs. 12,930 lacs and excess provisions of license fee of Rs. 1,293 lacs recognised upto 31 March 2013 during the year. This has also resulted in revenue for the year being higher by Rs. 3,702 lacs and license fee being higher by Rs. 370 lacs. The above correction has resulted into the net loss for the year ended 31 March 2014 being higher by Rs. 8,305 lacs.

12. Hitherto, upto the year ended 31 March 2013, the Company recognized a portion of the activation fees over the estimated period of subscription/ the life of the CPE. During the year, the Company has reassessed its position of recognition of above activation fees, together with the level of service already rendered on activation, the corresponding cost incurred and separate consideration charged for the subsequent continuing services etc. Considering that the Company incurs significant upfront cost upto the stage of activation of CPE and charges separate consideration for subsequent continuing services, the Company has, in order to make better and appropriate presentation, amended its policy of revenue recognition of activation fee on an upfront basis.

The above change has resulted into additional activation / subscription revenue of Rs. 9,936 lacs for the year (including Rs. 4,614 lacs in relation to the previous year) with a corresponding increase in license fees of Rs. 994 lacs (including Rs. 461 lacs in relation to the previous year). As a consequence, the loss after tax for the year is lower by Rs. 8,942 lacs.

13. Till the year ended 31 March 2012, the exchange differences arising from foreign currency borrowing to the extent that they were regarded as an adjustment to interest cost, were treated as borrowing cost in terms of AS – 16, "Borrowing Costs". During the year ended 31 March 2013, pursuant to a clarifcation dated 9 August 2012 from the MCA, the Company has changed the accounting policy w.e.f. from 1 April 2011, to treat the same as "foreign exchange fuctuation", to be accounted as per AS – 11 "Effects of Changes in Foreign Exchange Rates", instead of AS – 16 "Borrowing Costs". This change has resulted into reversal of finance cost of Rs. 7,068 lacs for the financial year 2011-12 and consequential increase in depreciation by Rs. 1,124 lacs for the financial year 2011-12. The aforesaid change, resulting in net gain of Rs. 5,944 lacs for the financial year 2011-12, has been shown as ''exceptional items'' in the financial statements for the year ended 31 March 2013. In this regard, if the Company had followed the same accounting policy as during the year ended 31 March 2012, finance costs for the year ended 31 March 2013 would have been higher by Rs. 5,841 lacs, depreciation expense would have been lower by Rs. 1,415 lacs and the loss for the year ended 31 March 2013 would have been higher by Rs. 4,426 lacs.

14. Dish TV fled a petition before the Hon''ble Telecom Dispute Settlement Appellate Tribunal (TDSAT) against the public notices issued by IndiaCast UTV Media Distribution Private Limited (''IndiaCast'') for discontinuation of its channels. IndiaCast has also fled a petition against Dish TV inter alia challenging the manner of distribution of channels by Dish TV. Hon''ble TDSAT vide its order dated 15 April 2014 clubbed both the petitions and vide order dated 25 April 2014, stayed the public notice of IndiaCast and has also directed an audit of manner of distribution of IndiaCast channels, to be done by Broadcast Engineering Consultants India Limited (BECIL) and listed the matter for final hearing on 17 July 2014.

15. During the financial year 2011-12, the Company migrated from the fixed fee agreement with ESPN Software India Private Limited (ESPN) to the Reference Interconnect Offer (RIO) based agreement for its content fees. Upon refusal by the ESPN to the said migration, the Company approached the Telecom Dispute Settlement Appellate Tribunal (TDSAT). The TDSAT, vide its judgment dated 10 April 2012, allowed the Company to pay the content fees to ESPN w.e.f. 1 September 2011 on the basis of RIO rates published by ESPN and also allowed the Company a refund of any amount representing the difference between the amount paid by the Company as per the fixed fee agreement and the amount payable under the RIO rates w.e.f. 1 September 2011. ESPN fled a Special Leave Petition before the Hon''ble Supreme Court. The Hon''ble Supreme Court, vide its order dated 17 July 2012 refused to grant interim stay on the order of the Hon''ble TDSAT. The Company in view of the order of the TDSAT has exercised its right to claim the above refund amount and adjusted the same from the monthly content fee payable to ESPN.

Further, during the previous year, a petition was fled by the Company against ESPN in TDSAT against the public notices dated 5 November 2012 and 12 November 2012 issued by them for disconnection of their channels from Dish TV DTH platform. TDSAT vide its order dated 23 November 2012 granted an interim stay on the operation of the said notices and subsequently, vide judgment dated 25 April 2014 has held that the manner of distribution of channels by Dish TV was as per the regulations. It has directed the parties to conduct a reconciliation in terms of the said judgment. ESPN fled an appeal before the Hon''ble Supreme Court. Vide order dated 09 May 2014, no stay against Dish TV was granted by the Hon''ble Supreme Court.

16. Figures of the previous year have been regrouped / rearranged, wherever considered necessary to conform to the current year''s presentation. significant items in this regard are as under:

a) ''Repair and maintenance - plant and machinery'' amounting to Rs. 251 lacs have been reclassified under ''repair and maintenance - consumer premises equipments''.

b) ''Amounts/taxes paid under protest'' amounting to Rs. 730 lacs have been reclassified under ''Advance tax''.


Mar 31, 2013

1. Background

Dish TV India Limited (''Dish TV'' or ''the Company'') was incorporated on 10 August 1988. The Company is engaged in the business of Direct to Home (''DTH'') and Teleport services. The DTH services are rendered to the customers through Consumer Premise Equipment (CPE), used for receiving and broadcasting DTH signals to the subscriber.

2. a) The name of the Company''s wholly owned subsidiary in Singapore viz Dish TV Singapore Pte Limited was changed to Digital Network Distribution Pte Limited on 12 March 2013. The Company entered into Share Purchase Agreement dated 19 March 2013 with a party for transfer of its investment at an agreed price of Singapore Dollar 12,000. On 1 April 2013, shareholding in Digital Network Distribution Pte Limited was transferred to other party and, accordingly, as at 31 March 2013, the investment has been shown under current maturities of long term investment.

b) Dish T V Lanka (Private) Limited, a Joint Venture (''JV'') Company, was incorporated on 25 April 2012 under the laws of Sri Lanka. Dish TV India Ltd holds 70% share capital in the JV Company with Satnet (Private) Limited, a company duly incorporated and having a DTH License in Sri Lanka, holding 30% of the share capital. The said JV Company shall engage in providing DTH related services in Sri Lanka.

c) During the previous year, upon inter-se transfer of shares between the Promoters, with effect from 26 December 2011 the Company became a subsidiary of Direct Media Distribution Ventures Pvt. Ltd (formerly known as Dhaka Warriors Sports Private Limited).

During the current year, Direct Media Distribution Ventures Pvt. Ltd. disinvested its holding in the Company from 59.86% to 45.24% and consequently, it ceases to be the holding company of Dish TV India Limited.

d) The Company, to enhance its focus on core Direct to Home (DTH) operations and to capitalize the growth prospects of DTH industry, divested its entire investment on 1 June 2011 in Integrated Subscribers Management Services Limited and recorded profit on sale of such investment amounting to Rs. 93 lacs in ''Other income'' in the previous year.

3. Employee stock option plan (EsOP) 2007

In the Annual General Meeting held on 3 August 2007, the shareholders of the Company have approved Employee Stock Option Plan, i.e., ESOP 2007 ("the Scheme"). The Scheme provided for issue of 4,282,228 stock options (underlying fully paid equity share of Rs. 1 each) to the employees of the Company as well as that of its subsidiaries and also to non-executive directors including independent directors of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 [''SEBI (ESOP) Guidelines, 1999''].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the options were re-priced at Rs. 37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999. Further, since the Company follows intrinsic value method for accounting of the above options, there is no charge in the Statement of Profit and Loss.

4. Disclosure pursuant to Accounting Standard 15 on "Employee Benefits"

Defined contribution plans

An amount of Rs. 430 lacs (previous year Rs. 360 lacs) and Rs. 5 lacs (previous year Rs. 6 lacs) for the year, have been recognized as expenses in respect of the Company''s contributions to Provident Fund and Employee''s State Insurance Fund respectively, deposited with the government authorities and have been included under "Employee benefits expenses".

Defined benefit plans

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company''s Scheme, whichever is more beneficial.

The following table sets forth the status of the gratuity plan of the Company and the amounts recognised in the Balance Sheet and Statement of Profit and Loss:

5. Segmental information

The Company is in the business of providing Direct to Home (''DTH'') and teleport services primarily in India. As the Company''s business activity primarily falls within a single business and geographical segment, disclosures in terms of Accounting Standard 17 on "Segment Reporting" are not applicable.

6. Related party disclosures

a) Related parties where control exists: Holding company:

Direct Media Distribution Ventures Private Limited. (formerly known as Dhaka Warriors Sports Private Limited) (with effect from 26 December 2011 upto 30 March 2013) Subsidiary companies:

Integrated Subscriber Management Services Limited (ISMSL) {ISMSL was subsidiary till 31 May 2011; renamed as Essel Business Processes Limited (EBPL), and with effect from 16 October 2011 merged with Cyquator Media Services Private Limited (all referred to as ''Cyquator'')}

Digital Network Distribution PTE Limited. (formerly known as Dish TV Singapore Pte Limited.)

Dish TV Lanka (Private) Limited (with effect from 25 April 2012)

b) Other related parties with whom the Company had transactions:

Key management personnel

Mr. Jawahar Lal Goel

Relative of key management personnel

Mr. Gaurav Goel

Enterprises over which key management personnel/ their relatives have significant influence

Agrani Convergence Limited

ASC Telecommunication Private Limited (formerly known as ASC Telecommunication Limited)

Asia Today Limited

Churu Trading Company Private Limited

Cyquator Media Services Private Limited/ Essel Business Processes Limited (referred to as Cyquator) (w.e.f. 1 June 2011)

Dakshin Media Gamming Solutions Private Limited

Diligent Media Corporation Limited

E-City Property Management & Services Private Limited

E-City Bioscope Entertainment Private Limited

Essel Agro Private Limited

Essel Corporate Resources Private Limited

Essel Infraprojects Limited

Essel International Limited

Interactive Finance and Trading Services Private Limited.

ITZ Cash Card Limited

Media Pro Enterprise India Private Limited

PAN India Network Infravest Private Limited

PAN India Network Limited

PAN India Paryatan Private Limited

Procall Private Limited

Rama Associates Limited

Siti Cable Network Limited (formerly known as Wire and Wireless (India) Limited)

Taj Television India Private Limited Taj TV Limited

Zee Akash News Private Limited

Zee Entertainment Enterprises Limited

Zee News Limited

Zee Turner Limited

ZEE Telefilms Middle East Fz LLC

7. Leases

a) Obligation on operating lease:

The Company''s significant leasing arrangements are in respect of operating leases taken for offices, residential premises, transponder, etc. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The initial tenure of the lease generally is for 11 months to 69 months. The details of assets taken on operating leases during the year are as under:

8. The Company has been making payment of license fee to the Regulatory Authority considering the present legal understanding. However, in view of the ongoing dispute, the Company has made provision on a conservative basis considering the terms and conditions of the License given by the Regulatory Authority.

Provision for regulatory dues (including interest)

The outflow of economic benefits with regard to the disputed portion would be dependent on the final deci- sion by the Regulatory Authority. Presently, it has been considered under the ''Short-term provisions''.

9. Rights issue

The Company during the financial year ended 31 March 2009 issued 518,149,592 equity shares of Rs.1 each at a premium of Rs. 21 per share for cash to the existing equity shareholders on the record date. The terms of payment were as under:

10. Issue of Global Depository Receipts (GDR Issue):

Pursuant to the approvals obtained by the Company and in accordance with the applicable laws including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on 23 November 2009 at a price of US $ 854.50 per GDR, each GDR representing 1000 fully paid equity shares. The pricing of the GDR as per the pricing formula prescribed under Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs. 39.80 per fully paid equity share and the relevant date for this purpose was 23 November 2009.

Upon opening, the GDR issue for USD 100 Million (approx) was fully subscribed and the Company received USD 1,000 lacs towards the subscription money. Upon receipt of the subscription money, the Issue Committee of the Board at its meeting held on 30 November 2009, issued and allotted 117,035,000 fully paid equity shares @ Rs. 39.80 per fully paid equity share to M/s Deutsche Bank Trust Company Americas (being the depository) in lieu of the Global Depository Receipts issued. The GDR''s are listed at the Luxembourg Stock Exchange.

During the year, 32,000 Global Depository Receipts were cancelled and converted into 32,000,000 equity shares of Rs. 1 each, by the holder and accordingly, the current outstanding GDRs are 85,035, each GDR representing 1000 fully paid equity shares.

11. Foreign currency transactions

a) In accordance with the Accounting Standard 11 (AS-11) and related notifications, the foreign currency exchange loss of Rs. 12,467 lacs has been adjusted (previous year foreign currency exchange loss of Rs. 2,101 lacs) in the value of fixed assets and the foreign currency exchange gain of Rs. 51 lacs (previous year foreign currency exchange loss of Rs. 154 lacs) in the capital work in progress.

b) i) The Company has outstanding forward contracts of US Dollars 70 lacs (previous year US Dollar 126 lacs) at fixed amount of Rs. 3,879 lacs (Rs. 5,652 lacs) which will be settled at a future date. These derivative contracts are for the repayment of Buyers'' credit loans.

ii) Foreign currency transactions outstanding as on the balance sheet date that are not hedged by derivative instruments or otherwise are as under.

12. Contingent liabilities and commitments

a) Contingent liabilities

Particulars As at As at 31 March 2013 31 March 2012

Claims against the Company not acknowledged as debt 483 483

Income-tax (refer note 47b) 2,652 2,652

Sales tax and Value Added tax 1,046 1,169

Customs duty 795 795

Service tax 5,721 167

Wealth tax 2 1

Entertainment tax (refer note 47c) 1,279 1,244

Legal cases including from customers against the Company Unascertained Unascertained

b) During the year ended 31 March 2011, the Company received a demand notice for income tax and interest thereon aggregating Rs. 4,056 lacs in relation to an earlier year. During the previous year, the assessing authority had reduced the demand to Rs. 2,642 lacs on the basis of application for rectification filed by the Company. The Company deposited Rs. 400 lacs during the previous year; and deposited additional amount of Rs. 330 lacs during the year. The matter pertains to alleged short deduction of tax at source on certain payments and interest thereon for delayed period. The Company has disputed the issue and has filed an appeal against the above said demand with the tax authorities. During the current year, the Company had submitted with the tax authorities the requisite supporting documents/ clarification from vendors. The Company, supported by legal view in the matter, is of the view that outcome of the litigation will not have significant impact on the financial statements.

c) The Company has received notices in various States on applicability of Entertainment Tax, for which no demands have been received. The Company has contested these notices at various Appellate Forums/Courts and the matter is subjudice.

13. The life of the Consumer Premises Equipment (CPE) for the purposes of depreciation has been estimated by the management as five years. Upto 31 March 2012, in certain cases, the one-time advance contribution towards the CPEs in the form of rental was being recognized over a period of three years from the activation date. The implication of this on these financial statements has not been determined presently.

However, such practice, with effect from 1 April 2012, has been changed to five years in respect of CPEs activated on or after 1 April 2012. There is no significant impact on financial statements for year ended 31 March 2013 on account of change in estimate for revenue recognition.

14. During the financial year 2011-12, the Company migrated from the fixed fee agreement with ESPN Software India Private Limited (ESPN) to the Reference Interconnect Offer (RIO) based agreement for its content fees. Upon refusal by the ESPN to the said migration, the Company approached the Telecom Dispute Settlement Appellate Tribunal (TDSAT). The TDSAT, vide its judgment dated 10 April 2012, allowed the Company to pay the content fees to ESPN w.e.f. 1 September 2011 on the basis of RIO rates published by ESPN and also allowed the Company a refund of any amount representing the difference between the amount paid by the Company as per the fixed fee agreement and the amount payable under the RIO rates w.e.f. 1 September 2011. ESPN filed a Special Leave Petition before the Hon''ble Supreme Court. The Hon''ble Supreme Court, vide its order dated 17 July 2012 refused to grant interim stay on the order of the Hon''ble TDSAT. The Company in view of the order of the TDSAT has exercised its right to claim the above refund amount and adjusted the same from the monthly content fee payable to ESPN.

Further, during the current year, a petition has been filed by the Company against ESPN in TDSAT against the public notices dated 5 November 2012 and 12 November 2012 issued by them for disconnection of their channels from Dish TV DTH platform. TDSAT vide its order dated 23 November 2012 has granted an interim stay on the operation of the said notices and the matter is pending at the TDSAT.

15. Hitherto, the exchange differences arising from foreign currency borrowing to the extent that they are regarded as an adjustment to interest cost, were treated as borrowing cost in terms of AS - 16, "Borrowing Costs". During the year ended 31 March 2013, pursuant to a clarification dated 9 August 2012 from the MCA, the Company has changed the accounting policy w.e.f. 1 April 2011, to treat the same as "foreign exchange fluctuation", to be accounted as per AS - 11 "Effects of Changes in Foreign Exchange Rates", instead of AS - 16 "Borrowing Costs". This change has resulted into reversal of prior year finance cost of Rs. 7,068 lacs and consequential increase in depreciation by Rs. 1,124 lacs during the year ended 31 March 2013. The aforesaid change, resulting in net gain of Rs. 5,944 lacs, has been shown as an ''exceptional items'' in the financial statements for the year ended 31 March 2013. In this regard, if the Company had followed the same accounting policy as in the previous year, finance costs for the year would have been higher by Rs. 5,841 lacs; depreciation expense would have been lower by Rs. 1,415 lacs and the loss for the year would have been higher by Rs. 4,426 lacs.

16. Figures of the previous year have been regrouped / rearranged, wherever considered necessary to conform to the current year''s presentation. Significant items in this regard are as under:

a) Foreign exchange gain amounting to Rs. 1,928 lacs which was classified under ''Finance costs'' has been reclassified under ''Other income'' as foreign exchange fluctuation.

b) Other creditors under ''Other Current liabilities'' amounting to Rs. 4,798 lacs have been reclassified in Sundry creditors under ''Trade payable''.

c) Advance tax which was classified under ''Short-term loans and advance'' amounting to Rs. 1,529 lacs have been reclassified in Advance tax under ''Long-term loans and advance''.

d) Advances to vendors, distributors, etc., under ''Short-term loans and advance'' amounting to Rs. 673 lacs have been reclassified in ''Loans and advances to related parties under short-term loans and advance''

e) ''Interest income from fixed deposits/margin money'' amounting to Rs. 3,047 lacs have been reclassified in ''Interest income from long-term investments'' Rs. 1,882 lacs and in ''Interest income from fixed deposits/ margin money'' Rs. 1,165 lacs.


Mar 31, 2012

1. Background

Dish TV India Limited ('Dish TV' or 'the Company') was incorporated on 10 August 1988. The Company is engaged in the business of Direct to Home ('DTH') and Teleport services. The DTH services are rendered to the customer through Consumer Premise Equipment (CPE), used for receiving and broadcasting DTH signals to the subscriber. Also refer to note 33 and 34 below.

2. Composite Scheme of Amalgamation and Arrangements ('the Scheme')

i) Agrani Satellite Services Limited ('ASSL'), a wholly owned subsidiary of the Company, was formed to own, establish and operate Ku band satellite system and to market and lease their bandwidth capacities. However, due to unfavorable market conditions, the satellite business was discontinued in the financial year 2009-10. Integrated Subscriber Management Services Limited ('ISMSL'), another wholly owned subsidiary of the Company, was in the business of providing services on commercial basis pertaining to subscriber's management, including raising and collection of bills, collection and maintenance of subscriber's information, preparation of required reports and call centre activities.

ii) In order to simplify the group structure and improve cost efficiency, the Board of Directors had approved a Composite Scheme of Amalgamation and Arrangement between the Company, ASSL, ISMSL and their respective shareholders and creditors ('the Scheme') at their meeting held on 11 June 2010. The Scheme envisaged transfer of the Company's non-DTH related business [including equity shares in ASSL and in Agrani Convergence Limited ('ACL'), another subsidiary company], to ISMSL followed by the merger of ASSL with ISMSL on 31 March 2010, the appointed date. As consideration for transfer of non-DTH related business, ISMSL would issue and allot 100,000 equity shares of the face value of Rs. 10 each, fully paid up, to the Company.

iii) The above Scheme was approved by the Hon'ble High Court of Delhi, vide its Order dated 3 March 2011 and corrigendum dated 31 March 2011 and became effective on 31 March 2011 on filing the Order of the Court with the Registrar of Companies, NCT of Delhi and Haryana.

v) The non-DTH business, transferred as above and which was excluded from the financial statements of the Company after 31 March 2010, did not have any operations during the previous year.

vi) While the Company followed the accounting treatment prescribed in the Scheme, duly approved by the Hon'ble High Court of Delhi, it resulted in certain deviations as compared to the Generally Accepted Accounting Principles (GAAP) in India. Had the Company followed the GAAP, the impairment of fixed assets/ diminution in the value of investment [in accordance with Accounting Standard ('AS') 28 and AS 13 respectively] would have been recognised in the Profit and Loss Account of the financial year 2009-10 and, accordingly, loss for the year 2009-10 and the debit balance in the Profit and Loss Account as at 31 March 2010 would have been higher by Rs. 17,435 lacs.

Since the aforesaid impairment of fixed assets/ diminution in the value of investment was not recognised in the previous year as a prior period item, which together with the impact of the transfer of other net assets/ liabilities in the previous year, net of consideration received, was adjusted in General Reserve directly, the loss for the previous year and the debit balance in the Profit and Loss Account at the end of the previous year was lower by Rs. 15,110 lacs. However, on implementation of the Scheme, the above net loss stands adjusted directly in the General Reserve in accordance with the accounting treatment approved in the Scheme by the Hon'ble High Court of Delhi

34. i) Further to enhance the focus of the Company on core Direct to Home (DTH) operations and to capitalize the growth prospects of DTH industry, the Company divested its entire investment on 1 June 2011 in ISMSL and recorded profit on sale of such investment amounting to Rs. 93 lacs in other income.

ii) During the year, Dish TV Singapore Re. Ltd. was incorporated on 6 October 2011 as a wholly owned subsidiary of the Company under the laws of Singapore to provide DTH related services.

iii) During the year upon inter-se transfer of shares between the Promoters, with effect from 26 December 2011 the Company has become a subsidiary of Dhaka Warriors Sports Private Limited.

iv) Since April 1, 2010 the new CAS activity was undertaken by the Company. However, the Viewing Cards (VC) activated prior to that date are being serviced by ISMSL (now a part of Cyquator Media Services Private Limited, refer to as Cyquator).

3. Employee stock option plan (ESOP) 2007

In the Annual General Meeting held on 3 August 2007, the shareholders of the Company have approved Employee Stock Option Plan, i.e., ESOP 2007 ("the Scheme"). The Scheme provided for issue of 4,282,228 stock options (underlying fully paid equity share ofRs. 1 each) to the employees of the Company as well as that of its subsidiaries and also to non-executive directors including independent directors of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ['SEBI (ESOP) Guidelines, 1999'].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the options were re-priced at Rs. 37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999. Further, since the Company follows intrinsic value method for accounting of the above options, there is no charge in the Statement of Profit and Loss.

4. Disclosure pursuant to Accounting Standard 15 on "Employee Benefits"

Defined contribution plans

An amount of Rs. 360 lacs (previous year Rs. 277 lacs) and Rs. 6 lacs (previous year Rs. 6 lacs) for the year, have been recognized as expenses in respect of the Company's contributions to Provident Fund and Employee's State Insurance Fund respectively, deposited with the government authorities and have been included under operating and other expenditure in the Statement of Profit and Loss.

Defined benefit plans

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company's Scheme, whichever is more beneficial.The following table sets forth the status of the gratuity plan of the Company and the amounts recognised in the Balance Sheet and Statement of Profit and Loss:

The principal assumptions used in determining gratuity for the Company's plans are shown below:

Discount rate: The discount rate is estimated based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligation.

Salary escalation rate: The estimates of salary increases, considered in actuarial valuation, take account of inflation, promotion and other relevant factors.

5. Segmental information

The Company is in the business of providing Direct to Home ('DTH') and teleport services primarily in India. As the Company's business activity primarily falls within a single business and geographical segment, disclosures in terms of Accounting Standard 17 on "Segment Reporting" are not applicable.

6. Related party disclosures

a) Related parties where control exists:

Holding company:

Dhaka Warriors Sports Private Limited (with effect from 26

December 2011)

Subsidiary companies:

Integrated Subscriber Management Services Limited

(ISMSL){ISMSL was subsidiary till 31 May 2011; renamed as Essel Business Processes Limited (EBPL), and with effect from 16 October 2011 merged with Cyquator Media Services Private limited (all referred to as Cyquator) Dish TV Singapore Re Limited

Agrani Convergence Limited #

Agrani Satellite Services Limited #

(#lnvestments disposed of to ISMSL in pursuant to the

Scheme approved by the Hon'ble High Court of Delhi, vide

its Order dated 3 March 2011 effective 31 March 2010)

b) Other related parties with whom the Company had transactions:.

Key management personnel

Mr. Jawahar Lal Goel

Enterprises over which key management personnel/ their relatives have significant influence

ASC Telecommunication Private Limited (formerly ASC Telecommunication Limited)

Asia Today Limited

Asia TV USA Limited

Chum Trading Company Private Limited

Cyquator Media Services Private Limited

Dakshin Media Gamming Solutions Private Limited

Diligent Media Corporation Limited

E-City Property Management & Services Private Limited

Essel Agro Private Limited

Essel Corporate Resources Private Limited

Essel Infraprojects Limited

Essel International Limited

Indian Cable Net Company Limited

Interactive Finance and Trading Services Private Limited.

ITZ Cash Card Limited

Media Pro Enterprise India Private Limited

PAN India Network Infravest Private Limited

PAN India Network Limited

Procall Private Limited

Rama Associates Limited

Wire and Wireless (India) Limited

Taj Television India Private Limited

Taj TV Limited

Zee Akash News Private Limited

Zee Entertainment Enterprises Limited

Zee News Limited

Zee Turner Limited

ZEE Telefilms Middle East Fz LLC

e) Guarantees etc. given by related parties in respect of secured loans:

i) As at 31 March 2012, personnel guarantees by key managerial personnel amounting to Rs. 30,000 lacs

(previous year 30,000 lacs) and corporate guarantee by Churu Trading Company Private Limited amounting to Rs. 30,000 lacs (previous year 30,000 lacs) are outstanding as at the year end.

ii) As at 31 March 2012, corporate guarantee by Dhaka Warriors Sports Private Limited amounting to Rs. 20,000 lacs (Previous year Rs. 20,000 lacs from Churu Trading Company Private Limited). During the year corporate guarantee of Rs. 20,000 lacs were released and transferred from Churu Trading Company Private Limited to Essel Corporate Resources Private Limited which was later transferred to Cyquator Media Services Private Limited and finally to Dhaka Warriors Sports Private Limited

iii) As at 31 March 2012, corporate guarantee by Zee Entertainment Enterprises Limited amounting to Rs. 13,222 lacs (previous year Rs. 32,220 lacs). During the year, the guarantee of Rs. 18,998 lacs (previous year Rs. 10,840 lacs) was released. The remaining guarantee is outstanding as at the year end.

iv) As at 31 March 2012, corporate guarantee by Essel Infraprojects Limited and Rama Associates Limited amounting to Rs. Nil (previous year Rs. 30,000 lacs), jointly and severally. During the current year the guarantee was released.

v) As at 31 March 2012 completion support undertaking from Zee Entertainment Enterprises Limited for the buyer's credit of Rs. 6,432 lacs (previous year Rs. 11,564 lacs).

7. Leases

(a) Obligation on operating lease:

The Company's significant leasing arrangements are in respect of operating leases taken for offices, residential premises, transponder, etc. These leases are generally cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessee and the lessor except in case of leases for office premises which are non-cancellable leases. The initial tenure of the lease generally is for 11 months to 51 months. The details of assets taken on operating leases during the year are as under:

8. The Company has been making payment of license fee to the Regulatory Authority considering the present legal understanding. However, in view of the ongoing dispute, the Company has made provision on a conservative basis

9. Issue of Global Depository Receipts (GDR Issue):

Pursuant to the approvals obtained by the Company and in accordance with the applicable laws including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on 23 November 2009 at a price of US $ 854.50 per GDR, each GDR represent- ing 1000 fully paid equity shares. The pricing of the GDR as per the pricing formula prescribed under For- eign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs. 39.80 per fully paid equity share and the relevant date for this purpose was 23 November 2009.

Upon opening, the GDR issue for USD 100 Million (approx) was fully subscribed and the Company received USD 1,000 lacs towards the subscription money. Upon receipt of the subscription money, the Issue Com- mittee of the Board at its meeting held on 30 November 2009, issued and allotted 117,035,000 fully paid equity shares @ Rs. 39.80 per fully paid equity share to M/s Deutsche Bank Trust Company Americas (being the depository) in lieu of the Global Depository Receipts issued. The GDR's are listed at the Luxembourg Stock Exchange.

10. Foreign currency transactions

a) In accordance with the Accounting Standard 11 (AS-11) and related notifications, the foreign currency exchange loss of Rs. 2,101 lacs has been adjusted (previous year foreign currency exchange gain of Rs. 856 lacs) in the value of fixed assets and Rs.154 lacs (previous year foreign currency exchange gain of Rs 30 lacs) in the capital work in progress.

b) i) The Company has outstanding forward contracts of US Dollars 126 lacs (previous year US Dollar 429 lacs) at fixed amount of Rs. 5,652 lacs (Rs. 19,660 lacs) which will be settled at future date. The purposes of these derivative contracts are for repayment of loans of US Dollar 126 lacs.

11. Contingent liabilities and commitments

a) Contingent liabilities

Particulars For the year ended For the year ended 31 March 2012 31 March 2011

Claim against the Company not acknowledged as debt 483 483

Income-tax Act, 1961 (refer note 49c) 2,652 4,056

Sales Tax and Value Added Tax demands 1,169 1,099

Indian Customs Act, 1962 795 1,494 Finance Act,1994 (Service tax case) 167 - Wealth Tax Act, 1957 1 -

Entertainment tax demands (refer note 49d) 1,244 1,182

Legal cases including customers against the Company Unascertained Unascertained

c) During the previous year, the Company received a demand notice for income tax and interest thereon aggregating Rs. 4,056 lacs in relation to an earlier year. During the current year the Company received stay order on demand of Rs. 4,056 lacs, depositing Rs. 400 lacs till disposal of appeal or 31 July 2012, whichever is earlier. Further, the assessing authority has reduced the demand to Rs. 2,642 lacs on the basis of application for rectification filed by the Company. The matter pertains to alleged short deduction of tax at source on certain payments and interest thereon for delayed period. The Company has disputed the issue and has filed an appeal against the abovesaid demand with the tax authorities. The Company, supported by a legal view in the matter, is of the view that no provision is necessary till the dispute is finally concluded by the appropriate authorities.

d) The Company has received notices in various States on applicability of Entertainment Tax, for which no demands have been received. The Company has contested these notices at various Appellate Forums/ Courts and the matter is subjudice.

12. During the year, the Company migrated from the fixed fee agreement with ESPN Software India Private Limited (ESS) to a Reference Interconnect Offer (RIO) based agreement for its content fees. Upon refusal by the ESS to migrate, the Company has approached the Telecom Dispute Settlement Appellate Tribunal (TDSAT). The TDSAT, vide its judgement dated 10 April 2012, has allowed the Company to pay the content fees to ESS w.e.f. 1 September 2011 on the basis of RIO rates published by ESS and also allowed the Company a refund of any amount representing the difference between the amount paid by the Company as per the fixed fee agreement and the amount payable under the RIO rates w.e.f. 1 September 2011. Though ESS has filed a special leave petition against the above order before the Supreme Court after the year end, the company in lieu of the order of the TDSAT has exercised its right to claim the above refund of the balance amount and/or adjust the same from the monthly content fee payable to ESS. The content charges aggregative Rs. 1,710 lacs with respect to the above party have accordingly been adjusted.


Mar 31, 2011

1. Background

Dish TV India Limited ('Dish TV' or 'the Company') was incorporated on 10 August 1988. The Company is engaged in the business of Direct to Home ('DTH') and Teleport services. The DTH services are rendered to the customer through Consumer Premise Equipment (CPE), used for receiving and broadcasting DTH signals to the subscriber. Also refer to Note 4 below.

2. Capital commitments and contingent liabilities

a) Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 3,469,882,668 (previous year Rs. 325,392,762).

b) Contingent liabilities not provided for

Particulars For the For the year ended year ended 31 March 2011 31 March 2010

Claim against the Company not acknowledged as debt 48,301,037 43,577,609

Income-tax Act, 1961* 405,614,101 -

Sales Tax and Value Added Tax demands 109,855,534 89,864,314

Indian Customs Act, 1962 149,406,086 -

Entertainment Tax demands # 118,223,928 101,520,074

Legal cases against the Company Unascertained Unascertained

* During the year, the Company received a demand notice for income tax and interest thereon aggregating Rs. 4,05,614,101 in relation to an earlier year. The matter pertains to alleged short deduction of tax at source on certain payments and interest thereon for delayed period. The Company has disputed the issue and has filed an appeal against the abovesaid demand with the tax authorities. The Company, supported by a legal view in the matter, is of the view that no provision is necessary till the dispute is finally concluded by the appropriate authorities.

# The Company has also received notices in various States on applicability of Entertainment Tax, for which no demands have been received. The Company has contested these notices at various Appellate Forums/ Courts and the matter is subjudice.

3. Composite Scheme of Amalgamation and Arrangements ('the Scheme')

i) Agrani Satellite Services Limited ('ASSL'), a wholly owned subsidiary of the Company, was formed to own, establish and operate Ku band satellite system and to market and lease their bandwidth capacities. However, due to unfavorable market conditions, the satellite business was discontinued in the previous year. Integrated Subscriber Management Services Limited ('ISMSL'), another wholly owned subsidiary of the Company, is in the business of providing services on commercial basis pertaining to subscriber's management, including raising and collection of bills, collection and maintenance of subscriber's information, preparation of required reports and call centre activities.

ii) In order to simplify the group structure and improve cost efficiency, the Board of Directors had approved a Composite Scheme of Amalgamation and Arrangement between the Company, ASSL, ISMSL and their respective shareholders and creditors ('the Scheme') at their meeting held on 11 June 2010. The Scheme envisaged transfer of the Company's non-DTH related business [including equity shares in ASSL and in Agrani Convergence Limited ('ACL'), another subsidiary company], to ISMSL followed by the merger of ASSL with ISMSL on 31 March 2010, the appointed date. As consideration for transfer of non-DTH related business, ISMSL would issue and allot 100,000 equity shares of the face value of Rs. 10 each, fully paid up, to the Company.

iii) The above Scheme has been approved by the Hon'ble High Court of Delhi, vide its Order dated 3 March 2011 and corrigendum dated 31 March 2011 and became effective on 31 March 2011 on filing the Order of the Court with the Registrar of Companies, NCT of Delhi and Haryana.

v) The non-DTH business, transferred as above and which has been excluded from the financial statements of the Company after 31 March 2010, did not have any operations during the year.

vi) While the Company has followed the accounting treatment prescribed in the Scheme, duly approved by the Hon'ble High Court of Delhi, it has resulted in certain deviations as compared to the Generally Accepted Accounting Principles (GAAP) in India. Had the Company followed the GAAP, the impairment of fixed assets/ diminution in the value of investment (in accordance with Accounting Standard ('AS') 28 and AS 13 respectively) would have been recognised in the Profit and Loss Account of the previous year and, accordingly, loss for the previous years and the debit balance in the Profit and Loss Account as at 31 March 2010 would have been higher by Rs. 1,743,523,943.

Since the aforesaid impairment of fixed assets/diminution in the value of investment have not been recognised in the current year as a prior period item, which together with the impact of the transfer of other net assets/ liabilities in the current year, net of consideration received, have been adjusted in General Reserve directly, the loss for the year and the debit balance in the Profit and Loss Account at the end of the year is lower by Rs. 1,511,023,943. However, on implementation of the Scheme, the above net loss stands adjusted directly in the General Reserve in accordance with the accounting treatment approved in the Scheme by Hon'ble High Court of Delhi.

4. Employee stock option plan (ESOP) 2007

In the Annual General Meeting held on 3 August 2007, the shareholders of the Company have approved Employee Stock Option Plan i.e. ESOP 2007 (“the Scheme”). The Scheme provided for issue of 4,282,228 stock options (underlying fully paid equity share of Rs. 1 each) to the employees of the Company as well as that of its subsidiaries and also to non-executive directors including independent directors of the Company at the exercise price which shall be equivalent to the market price determined as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ['SEBI (ESOP) Guidelines, 1999'].

The options granted under the Scheme shall vest between one year to six years from the date of grant of options, with 20% vesting each year. Once the options vest as per the Scheme, they would be exercisable by the grantee at any time within a period of four years from the date of vesting and the shares arising on exercise of such options shall not be subject to any lock-in period.

The shareholders in their meeting held on 28 August 2008 approved the re-pricing of outstanding options which were granted till that date and consequently the options were re-priced at Rs. 37.55 per option, determined as per SEBI (ESOP) Guidelines, 1999.

However, in respect of options granted subsequent to 28 August 2008, the exercise price of the options has been maintained as equivalent to the market price determined as per the SEBI (ESOP) Guidelines, 1999.

As stated above, the options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOP) Guidelines, 1999. Further, since the Company follows intrinsic value method for accounting of the above options, there is no charge in the profit and loss account.

5. Disclosure pursuant to Accounting Standard 15 on “Employee Benefits”

Defined contribution plans

An amount of Rs. 27,739,431 (previous year Rs. 20,949,096) and Rs. 561,513 (previous year Rs. 214,444) for the year, have been recognized as expenses in respect of the Company's contributions to Provident Fund and Employee's State Insurance Fund respectively, deposited with the government authorities and have been included under operating and other expenditure in the Profit and Loss Account.

Defined benefit plans

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company's Scheme, whichever is more beneficial.

6. Borrowing costs

During the earlier years, the Company had capitalised borrowing costs of Rs. 12,431,672 in the gross value of fixed assets. Since the said assets were not in the nature of qualifying assets, the Company has decapitalised Rs. 12,431,672 in the gross block and Rs. 2,532,985 in accumulated depreciation. This has resulted in prior period interest expenses of Rs. 9,898,687 (Refer to Note 24 to this schedule)

7. Segmental information

The Company is in the business of providing Direct to Home ('DTH') and teleport services primarily in India. As the Company's business activity primarily falls within a single business and geographical segment, disclosures in terms of Accounting Standard 17 on “Segment Reporting” are not applicable.

8. Related party disclosures

a) Related parties where control exists:

Subsidiary companies:

Integrated Subscriber Management Services Limited (ISMSL)

Agrani Convergence Limited #

Agrani Satellite Services Limited #

(#Disposed to ISMSL in pursuant to the Scheme approved by the Hon'ble High Court of Delhi, vide its Order dated 3 March 2011 effective 31 March 2010)

b) Other related parties with whom the Company had transactions:

Key management personnel

Mr. Jawahar Lal Goel

Enterprises over which key management personnel/their relatives have significant influence

Afro Asian Satellite Communication (Gibraltar) Limited

Afro Asian Satellite Communication (U.K.) Limited

Agrani Satellite Communication (Gibraltar) Limited

ASC Telecommunication Limited

Asia Today Limited

Asia TV USA Limited

Brio Academic Infrastructure and Resources Management Private Limited

Churu Trading Company Private Limited

Dakshin Media Gamming Solutions Private Limited

Diligent Media Corporation Limited

E-City Entertainment (India) Private Limited

E-City Property Management & Services Private Limited

Essel Agro Private Limited

Essel Corporate Services Private Limited

Essel Infraprojects Limited

Essel Shyam Technology Limited

Essel International Limited

Essel Sports Private Limited

ETC Networks Limited

Indian Cable Net Company Limited

Intrex Tradex Private Limited

ITZ Cash Card Limited

Mumbai Football Club Private Limited

Pan India Network Infravest Private Limited

Prajatma Trading Company Private Limited

Procall Private Limited

Rama Associates Limited

Wire and Wireless (India) Limited

Taj Television India Private Limited

Taj TV Limited

Zee Akash News Private Limited

Zee Entertainment Enterprises Limited

Zee News Limited

Zee Turner Limited

e) Guarantees given by related parties in respect of secured loans:

i) As at 31 March 2011, personnel guarantees by key managerial personnel, along with his relative and corporate guarantee by Churu Trading Company Private Limited amounting to Rs. 3,000,000,000 (previous year Rs. Nil), jointly and severally. The guarantees are outstanding as at the year end.

ii) As at 31 March 2011, corporate guarantee by Churu Trading Company Private Limited amounting to Rs. 2,000,000,000 (previous year Rs. Nil). The guarantee is outstanding as at the year end.

iii) As at 31 March 2011, corporate guarantee by Zee Entertainment Enterprises Limited amounting to Rs. 3,222,030,089 (previous year Rs. 3,222,030,089). During the previous year, the guarantee of Rs. 1,084,000,000 was released. The remaining guarantee is outstanding as at the year end.

iv) As at 31 March 2011, corporate guarantee by Essel Infraprojects Limited and Rama Associates Limited amounting to Rs. 3,000,000,000 (previous year Rs. 3,000,000,000), jointly and severally. The guarantee is outstanding as at the year end.

9. The Company has been making payment of license fee to the Regulatory Authority considering the present legal understanding. However, in view of the ongoing dispute, the Company has made provision on a conservative basis considering the terms and conditions of the License given by the Regulatory Authority.

10. Issue of Global Depository Receipts (GDR Issue):

Pursuant to the approvals obtained by the Company and in accordance with the applicable laws including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on 23 November 2009 at a price of US $ 854.50 per GDR, each GDR representing 1000 fully paid equity shares. The pricing of the GDR as per the pricing formula prescribed under Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs. 39.80 per fully paid equity share and the relevant date for this purpose was 23 November 2009.

Upon opening, the GDR issue for USD 100 Million (approx) was fully subscribed and the Company received USD 100,006,407.50 towards the subscription money. Upon receipt of the subscription money, the Issue Committee of the Board at its meeting held on 30 November 2009, issued and allotted 117,035,000 fully paid equity shares @ Rs. 39.80 per fully paid equity share to M/s. Deutsche Bank Trust Company Americas (being the depository) in lieu of the Global Depository Receipts issued. The GDR's are listed at the Luxembourg Stock Exchange.

The GDR Issue expenses of Rs. Nil (Rs. 40,883,283) incurred during the year are adjusted against the Securities Premium account.

11. Foreign currency transactions

a) The Company during the year ended 31 March 2009 had opted for accounting for the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules, 2009 on Accounting Standard 11 (AS-11), notified by Government of India on 31 March 2009. Accordingly, in the current year, foreign currency exchange gain of Rs. 85,567,491 has been adjusted (previous year Rs. 245,009,386) in the value of fixed assets and Rs. 3,026,407 (previous year Rs. 1,453,273) in the capital work-in-progress.

b) i) The Company has outstanding currency and interest swap transactions in respect of

US Dollar 42,871,349 (previous year US Dollar 9,301,500) at fixed amount of Rs. 1,966,024,362 (Rs. 455,633,978) which will be settled at future date. The purpose of this derivative contract are for repayment of loans and interest rate swap of US Dollar 42,871,349. The Company has not entered into derivative instruments for speculation purpose. During the year, the Company has recorded and provided for marked to market loss on derivative instruments of Rs. 12,448,574 (previous year Rs. Nil).

12. Based on the information available, there is no due outstanding towards Micro and Small Enterprises.

13. The Company implemented a Scheme of Amalgamation and Arrangement (refer note 4 above) in the current year. Accordingly the current figures are not directly comparable with those of the previous year.

14. Figures of the previous year have been regrouped/rearranged, wherever considered necessary to conform to the current year presentation. Significant items in this regard are as under:

- Term loan from banks and buyers credit as at 31 March 2010 ofRs. 3,000,000,000 andRs. 2,517,649,577 respectively, have been corrected and shown under 'Secured loans', as compared to previous year's presentation under 'Unsecured loans'.

- Forward cover payable of Rs. 35,764,268 as at 31 March 2010 has been disclosed separately under 'Current liabilities', instead of previous year's presentation of 'buyer's credit' under 'secured loans'.

- Certificate of Deposits amounting to Rs. 2,000,000,000 with SICOM Limited as at 31 March 2010 has been shown under 'Investments', as compared to previous year's presentation under 'Loans and advances'.

- Interest accrued but not due on fixed deposits and others of Rs. 6,757,457 has been shown under 'Other current assets', as compared to previous year's presentation under 'Loans and advances'.

- 'Other liabilities' of Rs. 121,983,545 as at 31 March 2010 primarily in the nature of statutory dues have been shown separately under 'Current liabilities', instead of earlier presentation as 'Creditors for expenses'.

- Provision for regulatory dues of Rs. 1,652,659,378 as at 31 March 2010 has been disclosed separately under 'Provisions', instead of previous year's presentation as 'Creditors for expenses' under 'Current liabilities'.

- Interest income of Rs. 632,943,242 for the year ended 31 March 2010 has been disclosed separately under 'Other income', as compared to previous year's presentation of netting it off against 'Interest expense'.

- 'Advertisement income' of Rs. 10,995,976 for the year ended 31 March 2010 has been disclosed separately under 'Sales and services' as compared to previous year's presentation of under 'Other operating income'

- 'Liabilities written back' of Rs. 6,556,848 for the year ended 31 March 2010 has been disclosed separately under 'Other Income' as compared to previous year's presentation of under 'Miscellaneous income'

The above do not have any impact on the loss for the previous year and current year.


Mar 31, 2010

1. Background

Dish TV India Limited is having registered office in the state of Delhi and is mainly in the business of providing Direct to Home (DTH) Satellite Television Service and Teleport Service.

2. use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from those estimates. Any revision to estimates is recognized prospectively over current and future periods.

3. Composite Scheme of Amalgamation and Arrangement (The Scheme)

Agrani Satellite Services Limited (ASSL), wholly owned subsidiary of Dish TV, was formed to own, establish and operate Ku band satellite system and to market and lease their bandwidth capacities. However, due to unfavorable market conditions, the satellite business is discontinued. Integrated Subscribers Management Services Limited (ISMSL), another wholly owned subsidiary of Dish TV, is in the business of providing services on commercial basis pertaining to subscribers management including raising and collection of bills, collection and maintenance of subscribers information, preparation of required report and call centre activities. In order to simplify the group structure and improve cost efficiency; the board of directors has approved the Scheme, wherein the Non-DTH related business (including equity shares in ASSL and Agrani Convergence Limited) of the Company is transferred to ISMSL followed by the merger of ASSL with ISMSL

In terms of Composite Scheme of Amalgamation and Arrangement between the Company, Agrani Satellite Services Limited (ASSL) Integrated Subscriber Management Services Limited (ISMSL) and their respective shareholders and creditors (Scheme), it is proposed to demerge Non-DTH business of the Company into ISMSL, followed by merger of ASSL with ISMSL on appointed date i.e. March 31, 2010. In consideration of transfer of Non-DTH related business, ISMSL will issue and allot 1,00,000 equity shares of face value of Rs. 10 each to Dish TV.

The Scheme of Arrangement is subject to requisite consent, approval of the shareholders and creditors of the companies, the Honble High Court of Judicature at Delhi and other statutory and regulatory authorities. The Scheme of Amalgamation and Arrangement under Section 391 -394 of the Companies Act, 1956 has been filed with the Honble High Court of Judicature at Delhi and is pending approval. Pending approval, no effect of the Scheme is considered in these financial statements.

4. SECURED LOANS

4.1 Term Loan from banks Rs. 2,590,700,000 (Rs. 2,590,700,000) is under syndicate debt facility and secured by all movable assets, uncalled capital, intellectual property, goodwill and all investments, all rights, title, interests of all insurance contracts (both present and future), all contracts, government approvals and licenses relating to direct to home services, all amounts in the accounts or other receivables liable to be credited to the accounts in the course of the business, all amounts and receivables from whomsoever person, both present and future in relation to direct to home service business, floating charge on other assets. Further the Company is required to maintain minimum reserve amount with the banks which is guaranteed by a related party.

4.2 Term Loan from a bank Rs. 1,000,000,000 (NIL) is secured by subservient hypothecation charge on whole of current assets, movable and immovable fixed assets of the company (present and future) and unconditional and irrevocable corporate guarantee by a related party. (Amount repayable within a year Rs. 375,000,000).

4.3 Cash Credit of Rs. Nil (Rs. 74,604,622) is secured by first pari passu charge by way of hypothecation on moveable fixed assets of the Company and pledge of shares owned by related parties.

4.4 Vehicle loans are secured against hypothecation of vehicles, (ROC charge not registered) (Amount repayable within a year Rs. 1,456,895).

5. UNSECURED LOANS

5.1 Buyers credit from a bank Rs. 1,348,647,896 (Rs.1,475,853,910) is guaranteed by a related party (Amount repayable within a year Rs. 546,717,624).

5.2 Buyers credit from a bank of Rs. 1,169,046,681 (Rs. 687,170,250) is on undertaking provided by related party and the Company has to maintain minimum reserve equivalent to three months payments of principal and interest on outstanding amount, which is guaranteed by a related party.

5.3 Term Loan from a bank Rs. 3,000,000,000 (Rs. 3,000,000,000) is guaranteed by two directors and also collaterally secured by immovable property and corporate guarantee provided by related parties. The Company to maintain debt service reserve equivalent to three months installment and interest (Amount repayable within a year Rs. 900,000,000). Subsequent to balance sheet date, the loan is secured by second pari passu charge on entire fixed assets of the company.

5.4 Short Term Loan from bank Rs. Nil (Rs. 1,000,000,000) is guaranteed by a related party.

6. Taxes on Income

6.1 In the absence of taxable income as per Income Tax Act, 1961 provision for current tax is not required.

6.2 In accordance with the Accounting Standards-22 on "Accounting for Taxes on Income" deferred tax assets and liability should be recognized for all timing difference in accordance with the said standard. However, considering the present financial position and requirements of the accounting standard regarding certainty/virtual certainty, the same is not recognized. The same will be reassessed at a subsequent Balance Sheet date and will be recognised in the year when certainty / virtual certainty to be realized.

7. Fixed Assets and Capital Work-in-Progress

7.1 Capital Work in Progress comprises of equipments [including consumer premises equipment (CPE)] Rs. 1,940,585,528 (Rs. 1,801,948,889), capital goods in transit Rs. 241,002,460 (Rs. 468,421,511) and capital advances Rs. 69,092,106 (Rs. 110,539,713).

7.2 The Company has commissioned its facility namely "Headend In The Sky" (HITS) on April 1, 2009 for providing television channels in digital form directly to MSO and Cable Operators. The expenses incurred on the project during the construction and trial run period (net of revenue) till March 31, 2009 as per detail given below, have been capitalized over the related assets. The company has suspended its operations with effect from March 31, 2010. The fixed assets including capital work in progress of the HITS along with security deposits received are proposed to be transferred to its wholly owned subsidiary pursuant to the Scheme (Refer Note 24).

8. Others Disclosures

8.1 Previous year figures have been regrouped, rearranged and recasted wherever considered necessary to confirm to current year presentation. Figures in brackets pertain to previous year.

8.2 As per the information available with the Company none of the creditors have confirmed to be registered under the ‘Micro, Small and Medium Enterprises Development Act, 2006.

8.3 Loans and Advances

8.3.1 Loans and Advances to subsidiaries includes advance against share application money Rs. 865,665,043 (Rs. 630,003,231).

8.3.2 Other Advances includes Rs. 1,208,430,395 (Rs. 1,208,430,395) due from foreign companies acquired as part of multi mission satellite system project considered as doubtful in earlier years and provided for.

8.3.3 Loans includes Rs. 1,025,766,183 (Rs. 957,267,575) and Other Advances includes Rs. 240,018,763 (Rs. 216,317,469) are overdue. However, in the opinion of the management these amounts are recoverable.

8.3.4 Other Advances includes interest accrued Rs. 6,757,457 (Rs. 3,300,376).

8.4 Creditors for expenses and other Liabilities

8.4.1 Includes Rs. 925,164 (Rs. 926, 694) due to a Subsidiary Company.

8.4.2 Includes cheque overdrawn Rs. NIL (Rs.128,441,287).

8.5 Employee Stock option Plan ESOP-2007

The shareholders of the Company at the Annual General Meeting held on August 03, 2007 approved Employee Stock Option Plan i.e. ESOP 2007 ("The Scheme"). The Scheme provides for issue of 4,282,228 options (underlying equity share of Re.1 each) to the employees of the Company as well as that of its subsidiaries and also to non-executive directors including independent directors of the Company at the market price determined as per the SEBI (ESOS) Guidelines, 1999.

The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. Under the terms of the Scheme, 20% of the options will vest in the employee every year equally. The Option Grantee must exercise all vested options within a period of four years from the date of vesting. Once the options vest as per the Scheme, they would be exercisable by the Option Grantee at any time and the shares arising on exercise of such options shall not be subject to any lock-in period.

8.6 Retirement Benefits

A) Defined Benefit Plans:

The present value of defined benefit obligation and the related current service cost are measured using the projected unit credit method with actuarial valuation being carried at each balance sheet date. The defined benefit obligations are not funded.

8.7 Foreign Currency Transaction:

8.7.1 The foreign exchange gain (net) of Rs. 44,207,583 [loss (net) of Rs. 244,361,235] resulting from settlement and realignment of foreign exchange transaction has been adjusted to Profit and Loss Account. Foreign currency exchange gain of Rs. 245,009,386 is decapitalized (Rs. 146,851,075 is capitalized) under fixed assets and Rs. 1,453,273 decapitalized (Rs. 16,909,146 is Capitalized) under capital work in progress as explained below in Note 30.10.2.

8.7.2 The Company in the year ended March 31, 2009 has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules, 2009 on Accounting Standard 11 (AS-11) notified by Government of India on March 31, 2009. Accordingly in the current year the Company has decapitalized exchange gain of Rs. 246,462,659 (In previous year capitalized exchange loss of Rs. 163,760,221 including gain Rs. 2,556,020 pertaining to earlier periods adjusted through profit and loss account) with the cost of fixed assets/capital work in progress.

8.7.3 a) The Company has entered into currency and Interest swap transaction in respect of borrowing of US$ 9,301,500 (US$ 9,301,500) at fixed amount of Rs. 455,633,978 which will be settled at future date.

8.8 Deposit with financial institution Rs. 2,000,000,000 (NIL) represents deposit with SICOM Limited, which is deposited out of Rights Issue proceeds. Maximum outstanding during the year Rs. 2,000,000,000 (NIL).

8.9 Debit and Credit balances including of subscribers, distributors and dealers are subject to confirmation/ reconciliation and few have confirm balances.

8.10 A subsidiary of the company has paid remuneration Rs. 1,050,000 to a relative of directors, which is subject to approval of shareholders in the ensuing annual general meeting.

8.11 Financial Statements of Subsidiaries

The Ministry of Corporate Affairs, Government of India vide its order no.47/116/2010-CL-III dated 18th March, 2010 issued under section 212 (8) of the Companies Act, 1956 ("The Act") has exempted the Company from attaching the Balance Sheets and Profit and Loss Accounts of its subsidiaries under Section 212 (1) of the Act. As per the Order, key details of each subsidiary are attached along with statements under Section 212 (1) of the Act.

8.12 The Ministry of Corporate Affairs, Government of India vide letter dated July 30, 2010 has granted extension of three months to hold its annual general meeting.

9. Capital Commitment

Estimated amount of contract remaining to be executed on capital account and not provided for (Net of advance) is Rs. 325,392,762 (Rs. 1,381,819,989).

(Currency : Indian Rupee)

10. Contingent Liability not provided for

10.1 Particulars 2010 2009

Guarantees given by Banks 400,455,000 5,02,615,000 [includes Rs. 400,000,000 (Rs. 488,860,000) guaranteed by a related party]

Claim against the Company not acknowledged as debt 43,577,609 43,999,609

Sales Tax and Value Added Tax demands 89,864,314 33,734,094

Entertainment Tax demand 101,520,074 91,995,090

Legal cases against the Company Unascertained Unascertained

10.2 Service Tax Department has raised a demand of Rs. 668,271,072 (Rs. 669,438,287) for the period from June, 2005 to September, 2007. The Company has submitted its reply.

10.3 The Company entered into an agreement with its wholly owned subsidiary Agrani Satellite Services Limited (ASSL) for transponder capacity hiring. ASSL had entered into a satellite capacity agreement with a supplier for obtaining transponder capacity on a satellite to be launched. The Company provided a corporate guarantee to the supplier for utilizing the proposed transponder capacity and also to ensure due compliance of agreement between ASSL and the supplier. However, as the supplier failed to meet various obligations under the agreement, ASSL terminated the agreement.

The supplier disputed the said termination and initiated arbitration proceedings against ASSL in ICC International Court of Arbitration at Singapore by filing its claim of USD 190,630,000. This is contested by ASSL. Subsequent to the balance sheet date, both the parties have reached an amicable settlement and consequently, the arbitral proceeding shall be terminated in due course.

10.3 The Company had acquired transponder capacity for the HITS services under Transponder Capacity Agreement. Due to change in the government policy, the company terminated the Transponder Capacity Agreement with supplier under Force Majeure condition. The supplier claimed damages of USD 15,806,802.28. However, subsequent to the balance sheet, the company and supplier have settled the dispute under which both the parties will be released of all the liabilities. Formal settlement agreement is yet to be executed by the parties.

11. Borrowing Cost amounting to Rs. 3,779,976 (Rs. 8,651,696) has been capitalized to the cost of fixed assets/capital work in progress during the year.

12. Rights Issue:

12.1 The Company during the financial year ended March 31, 2009 issued 518,149,592 partly paid up equity shares of Re. 1 each at a premium of Rs. 21 per share for cash to the existing equity shareholders on the record date. The terms of payment were as under:

12.2 The Right Issue expenses Rs. NIL (Rs. 57,501,428) incurred during the year are adjusted against Securities Premium in accordance with section 78 of the Companies Act, 1956.

13. Issue of Global Depository Receipts (GDR Issue):

13.1 Pursuant to the approvals obtained by the Company and in accordance with the applicable law including the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993, as amended, the Global Depository Receipt (GDR) Offer of the Company for 117,035 GDRs opened for subscription on November 23, 2009 at a price of US $ 854.50 per GDR representing 1000 equity shares.

The pricing of the GDR as per the pricing formula prescribed under Clause 5 (4) (D) of the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs. 39.80 per equity share and the relevant date for this purpose was November 23, 2009.

13.2 The GDR Issue expenses Rs. 40,883,283 incurred during the year are adjusted against Securities Premium in accordance with section 78 of the Companies Act, 1956.

14. Related Party Disclosures

14.1 List of parties where control exists:

- Agrani Satellite Services Limited. (Wholly Owned Subsidiary)

- Integrated Subscriber Management Services Limited (Wholly owned Subsidiary)

- Agrani Convergence Limited. (Extent of holding 51%)

14.2 Other Related Parties with whom transactions have taken place during the year and balances outstanding as on last date of the year:

Afro Asian Satellite Communication (Gibraltar) Limited, Afro Asian Satellite Communication (U.K.) Limited, Agrani Satellite Communication (Gibraltar) Limited, ASC Telecommunication Limited, Asia Today Limited, Brio Academic infrastructure and Resources Management Private Limited, Churu Trading Company Private Limited, Essel International Limited, Essel Sports Private Limited, Dakshin Media Gamming Solutions Private Limited, Diligent Media Corporation Limited, E City Entertainment (I) Private Limited, E-city Property Management and Serivces Private Limited., Essel Agro Private Limited, Essel Corporate Services Private Limited, Essel Infraprojects Limited, Essel Shyam Technology Limited, ETC Networks Limited, Indian Cable Net Company Limited, Intrex Tradex Private Limited, ITZ Cash Card Limited, Mumbai Football Club Private Limited, Pan India Network Investment Private Limited, Prajatma Trading Company Private Limited, Procall Private Limited, Rama Associates Limited, Wire and Wireless (India) Limited, Taj Television India Private Limited, Zee Akash News Private Limited, Zee Entertainment Enterprises Limited, Zee News Limited, Zee Turner Limited.

Managing Director: - Mr. Jawahar Lal Goel

Non Executive Directors: - Mr. Subhash Chandra, Mr. B.D. Narang, Mr. Arun Duggal, Dr. Pritam Singh, Mr. Ashok Kurien, Mr. Eric Zinterhofer, Mr. Mintoo Bhandari (Alternate director to Mr. Eric Zinterhofer)

15. Segment Information As Per AS-17

The Company is in the business of providing Direct to Home (DTH) and teleport services. As the companys business activity primarily falls within a single business and geographical segment are insignificant, therefore no additional disclosures to be provided in terms of Accounting Standard 17 on "Segment Reporting"

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