Home  »  Company  »  Dish TV India Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Dish TV India Ltd.

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.

 
Subscribe now to get personal finance updates in your inbox!