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Notes to Accounts of Hathway Cable & Datacom Ltd.

Mar 31, 2022

Contingent Liabilities

a) The Company has received Show Cause cum Demand notices (âSCNsâ) from the Department of Telecommunications (âDOTâ), Government of India for the financial years from 2006-07 to 2019-20 towards license fees aggregating to '' 3,586.86 which includes penalty and interest thereon (31 March 2021: for financial years from 2006-07 to 2008-09: '' 376.40 including penalty and interest). The Company has made representations to DOT contesting the basis of such demands. Based on opinion of legal expert, the Company is confident that it has good grounds on merit to defend itself in the above matter. Accordingly, the Company is of the view that no provision is necessary in respect of the aforesaid matter.

b) The minority shareholders of the erstwhile joint venture company, Hathway Rajesh Multichannel Pvt. Ltd., filed an arbitration petition against the Company before the High Court, Bombay, which was referred to a sole arbitrator in August 2016. The minority shareholders, in their statement of claim have sought, amongst other reliefs, payment of '' 54.98 (March 31, 2021: '' 54.98) under various heads. The Company has refuted the claims and has made counter claim of '' 91.17 (March 31,2021: '' 91.17) towards inter-alia outstanding content cost, loans, payments and damages / compensation for the loss of financial and management credibility, goodwill etc. The matter is currently pending.

c) On conclusion of investigation by the Directorate of Revenue Intelligence (DRI) on alleged evasion of customs duty on import of software licence of viewing cards, the Commissioner of Customs (Import) has passed an order demanding Custom''s Duty of '' 8.95 (March 31, 2021: '' 8.95). The Company has deposited '' 0.67 (March 31, 2021: '' 0.67) under protest and filed an appeal against the order before Customs and Excise and Service Tax Appellate Tribunal (CESTAT), Western Zonal Branch, Mumbai. Such appeal is pending before the CESTAT.

for the year ended March 31,2022 ('' in crores unless otherwise stated) d) Claims against the Company, other than those stated above, not acknowledged as debts are as under:
Matters with	As at March 31, 2022	As at March 31, 2021
Operators & Others	2.23	0.59
Income Tax Matter under Appeal	85.14	43.07
Other Statutory Authorities	0.00*	0.29
GST / VAT Authorities	9.50	.......................................................4.24"
Custom''s Duty under Provisional Assessment	39.87	.......................................................3.24"
Total	136.74	51.43

* Amount less than '' 50,000

Pursuant to Business Transfer Agreement dated March 24, 2017, the Company has transferred its Cable Television business which inter alia includes claims against the Company not acknowledged as debts, by way of slump sale to its wholly owned subsidiary Hathway Digital Limited (HDL). Accordingly, the details of such claims, litigation etc. relating to Cable Television business transferred to HDL are not disclosed hereinabove

e) Foreseeable losses

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ applicable accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.

f) Note on pending litigations

The Company''s pending litigations comprises of proceedings pending with various Direct Tax, Indirect tax and other authorities. The company has reviewed its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements.

4.03 Financial Corporate Guarantee

The Company has given Corporate Guarantees of '' 20 (March 31, 2021: '' 20) to Banks towards various credit facilities extended by them to related parties.

4.04 Capital and Other Commitments

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to '' 24.29 (March 31, 2021: '' 72.58).

As a part of business strategy, the Company has expanded its area of operations in various parts of the country by entering into arrangements with local partners. Such operations are in the form of subsidiaries/joint ventures. Since operations of such entities are significantly dependent on the company''s policies, the Company is committed to provide the required support towards the operations of such entities including financial support that may be required to meet commitments/ obligations of such entities.

4.05 Exceptional Items

Changes in market dynamics has impacted operations of certain entities including Joint Ventures. Management, based on a review; has provided for impairment of investment in such entities, classified under Exceptional Item so as to give its clear impact, independent of operational performance. Such exceptional item is net of provision for impairment no longer required.

During the previous financial year, the Company has sold investments in certain Subsidiaries and Joint ventures. The loss on sale of investments in such entities being non-routine in nature, has been disclosed as âExceptional Itemâ in the financial statements.

Employee Benefits

a) Defined Benefit Plans:

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 to 26 days'' salary for each completed year of service subject to a maximum of '' 0.20 (March 31, 2021: '' 0.20). Vesting occurs upon completion of five continuous years of service in accordance with Indian law.

The Present value of the defined benefit obligations and related current service cost were measured using the Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date.

Investment Risk	The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields. If the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment with LIC of India and Exide Life Insurance Corporation of India.
Interest Risk	A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt investments
Longevity Risk	The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.
Salary Risk	The Gratuity benefit, being based on last drawn salary, will be critically affected in case of increase in future salaries being more than assumed.

b) Defined Contribution Plans:

The Company contributes towards provident fund and other defined contribution benefit plans for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the defined contribution plan to fund the benefits.

The Total expenses recognised in the statement of Profit and Loss is '' 2.23 (March 31, 2021: '' 2.34) represents contribution payable to these plans by the Company at the rates specified in the rules of plan.

4.07 Disclosures as required by Indian Accounting Standard (Ind AS) 108 Operating Segments

As the Company''s business activity falls within a single business segment in terms of Ind AS 108 on Operating Segments, the financial statement are reflective of the information required by Ind AS 108.

4.08 Leases

Short term leases accounted in the statement of Profit and Loss is '' 25.68 (March 31, 2021 : '' 24.71)

4.10 Capital Management

The Company''s financial strategy aims to support its enterprise priorities and to maintain an optimal capital structure so as to provide adequate capital to its businesses for growth and create sustainable stakeholder value. For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The principal source of funding of the Company is expected to be cash generated from its operations supplemented by funding through capital market options.

Consequent to such capital structure, the Company is not subject to any externally imposed capital requirements.

4.11 Financial Instruments :

(i) Methods & assumptions used to estimate the fair values

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, security deposits given, loans given to related parties, other bank balances, deposits, trade payables, payables for acquisition of non- current assets and cash and cash equivalents are considered to be the same as their fair values.

b) For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

(ii) Categories of financial instruments

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: inputs which are not based on observable market data

4.12 Financial Risk Management

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Board of Directors. The details of different types of risk and management policy to address these risks are listed below:

The business activities of Company expose it to financial risks namely Credit risk, Liquidity risk and Market risk.

1. Credit risk

Credit risk arises from the possibility that counter party will cause financial loss to the company by failing to discharge its obligation as agreed.

The exposure of the Company to credit risk arises mainly from the trade receivables, unbilled revenue, loans given and financial guarantee contract.

Credit risks from balances with banks and financial institutions are managed in accordance with the Company policy. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit-ratings assigned by credit-rating agencies.

The Company''s major revenue streams arises from services provided to end use customers in the form of monthly subscription income, which predominantly follows a prepaid model. The trade receivables and unbilled revenue on account of subscription income are typically un-secured and derived from sales made to large number of independent customers. As the customer base is distributed economically and geographically, there is no concentration of credit risk.

2. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from banks at an optimised cost whenever considered appropriate. In addition, processes and policies related to such risks are overseen by senior management. The Company''s senior management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

The Company from time to time in its usual course of business issues financial guarantees and letter of comfort to certain subsidiaries, associates and joint ventures. Company has issued corporate guarantee and letter of comfort for debt of '' 20.00 (March 31, 2021: '' 20.00). The outflow in respect of these guarantees and letter of comfort will arise only upon default of such subsidiaries, associates and joint ventures. '' 20.00 (March 31, 2021: '' 20.00) is due for repayment within 1 year from the reporting date.

Financing arrangements

The Company has sufficient sanctioned line of credit from its bankers / financiers; commensurate to its business requirements. The Company reviews its line of credit available with bankers and lenders from time to time to ensure that at all point in time there is sufficient availability of line of credit.

The Company pays special attention to the net operating working capital invested in the business. In this regard, as in previous years, considerable work has been performed to control and reduce collection periods for trade and other receivables, as well as to optimise accounts payable with the support of banking arrangements to mobilise funds.

3. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed in the ordinary course of business to following risks: (a) foreign exchange risk and (b) price risk.

(a) Market Risk - Foreign Exchange

Foreign currency risk is managed by following established risk management policies, which inter alia includes monitoring the movements in currencies in which the borrowings / capex vendors are payable and hedging the exposure to foreign currency risk, wherever considered appropriate, by entering into forward currency contracts, call options and currency swaps contracts.

The Company does not enter into or trade financial instrument including derivative for speculative purpose.

(b) Market Risk -Price Risk:

The Company is mainly exposed to the price risk due to its investment in mutual funds and bonds. The price risk arises due to uncertainties about the future market values of these investments. At March 31 2022, the investments in mutual funds is '' 149.65 (March 31, 2021 : '' 346.96) and in Bonds is '' 199.58 (March 31,2021: '' Nil). These are exposed to price risk. In order to minimise price risk arising from investments in mutual funds and bonds, the Company predominately invests in those mutual funds, which have higher exposure to high quality debt instruments with adequate liquidity and no demonstrated track record of price volatility. Further, in order to minimise price risk in bonds, the company invests in high rated Debt Instrument issued by large corporates.

4.16 The Operation of the Company are classified as ''infrastructure facilities'' as defined under Schedule VI of the Act. Accordingly the disclosure requirements specified in sub section 4 of section 186 of the Act in respect of loan given or guarantee given or security provided and the related disclosure on purposes/ utilization by recipient companies, are not applicable to the Company except details of Investment made during the year as per section 186(4) of the Act.

Financial Year 2021-22

The Company has made Investment in following body corporate during the year:

Hathway Kokan Crystal Network Ltd. - 5,488 Equity Shares amounting to '' 0.01 Hathway Sonali Om Crystal Cable Pvt. Ltd. - 25,84,000 Equity Shares amounting to '' 2.58 Financial Year 2020-21

The Company has made Investment in following body corporate:

Hathway Digital Saharanpur Cable & Datacom Ltd. - 9,800 Equity Shares amounting to '' 0.25

Hathway Digital Limited - 180,00,00,000 0.01 % Non-Cumulative Optionally Convertible Preference Shares amounting to '' 1,800.

Hathway Digital Limited - 100,00,00,000 Zero Coupon Optionally Fully Convertible Debentures amounting to '' 1,000 (these are fully redeemed during the year).

4.17 Revenue from contracts with customers

Disaggregation Of Revenue

As the Company''s business activity falls within a single business segment in terms of Ind AS 108. The nature, amount, timing and uncertainty of revenue and cash flows are similar across company''s revenue from contracts with customers. Accordingly, there is no disaggregation of revenue disclosed.

Contract Balances

The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Trade receivable and unbilled revenues are presented net of impairment in the Balance Sheet.

4.20 Additional Regulatory Information detailed in clause 6L of General Instructions given in Part I of Division II of the Schedule III to the Companies Act, 2013 are furnished to the extent applicable to the Company.

4.21 RECENT PRONOUNCEMENTS

On March 23, 2022, the Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standards) Amendment Rules, 2022. This notification has resulted into amendments in the following existing accounting standards which are applicable to company from April 1, 2022.

i. Ind AS 103 - Business Combination

ii. Ind AS 109 - Financial Instrument

iii. Ind AS 16 - Property, Plant and Equipment

iv. Ind AS 37 -Provisions, Contingent Liabilities and Contingent Assets

Application of above standards are not expected to have any significant impact on the company''s financial statements.

4.22 Previous year''s figures have been rearranged / regrouped, wherever necessary.

Mar 31, 2018

FH03 FINANCIAL CORPORATE GUARANTEE

The Company has given Corporate Guarantees of Rs, 856.75 (March 31, 2017: Rs, 113.64) to Banks & Rs, 14.14 (March 31, 2017: Rs, 8.38) to Others towards various credit facilities extended by them to related parties.

004 capital and other commitments

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs, 49.43 (March 31, 2017: Rs, 51.02).

As a part of business strategy, the Company has expanded its area of operations in various parts of the country by entering into arrangements with local partners. Such operations are in the form of subsidiaries/joint ventures. (Subsequently, some of such entities are converted into wholly owned subsidiaries.) Since operations of such entities are significantly dependent on the company''s policies, the Company is committed to provide the required support towards the operations of such entities including financial support that may be required to meet commitments/obligations of such entities.

exceptional items

During the current financial year, the Company has offloaded 72 lakhs shares of GTPL Hath way Limited under Offer to sale @ Rs, 170 per share. The holding of the Company has reduced from 50% to 37.32%.

Pursuant to circular dated December 17, 2012 issued by the Delhi Entertainment Department, the MSOs were made responsible for collection and payment of Entertainment Tax for secondary points w.e.f. April 1, 2013. The Company challenged the constitutional vires of the said circular and filed writ petition in the matter before the High Court of Delhi. The High Court pronounced a favourable judgment stating that the liability to collect and deposit the Entertainment Tax for secondary points rests wholly and solely upon the LCOs, before and after March 31, 2013, as they are the Proprietor of their individual cable TV network, and not the MSOs. Accordingly, the Company during the previous financial year 2016-17 had reversed provision of Rs, 9.70 made on account of Entertainment tax.

EMPLOYEE BENEFITS

a) Defined Benefit Plans:

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 to 26 daysRs, salary for each completed year of service subject to a maximum of Rs, 0.10. Vesting occurs upon completion of five continuous years of service in accordance with Indian law.

The Present value of the defined benefit obligations and related current service cost were measured using the Projected Unit Credit Method, with acturial valuation being carried out at each Balance Sheet date.

financial risk management

The business activities of Company activities expose it to financial risks namely Credit risk, Liquidity risk and Market risk. In order to minimize any adverse effects on the financial performance of the Company, it uses derivative financial instruments, such as foreign exchange forward contracts, foreign currency swap contracts, call options to hedge certain foreign currency risk exposures and follows policies set up by a Treasury department under policies approved by the Board of Directors.

credit risk

Credit risk arises from the possibility that counter party will cause financial loss to the company by failing to discharge its obligation as agreed. The Company''s exposure to credit risk arises mainly from the trade receivables, loans given, financial guarantee contract and derivative financial instruments.

The Company''s major revenue streams arises from services provided to end use customers in the form of monthly subscription income. The trade receivables on account of subscription income are typically un-secured and derived from sales made to large number of independent customers. As the customer base is distributed economically and geographically, there is no concentration of credit risk. The credit period provided by the Company to its end use customers generally ranges from 0 to 30 days.

The Company follows a simplified approach (i.e based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables. For the purpose of measuring the lifetime ECL allowance for trade receivables, the Company uses a provision matrix which comprise a very large number of small balances grouped into homogenous groups and assessed for impairment collectively. Individual trade receivables are written off when management deems them not recoverable. Based on the industry practices and business environment in which the Company operates, management considers that the trade receivables are in default if the payment are more than 12 months past due.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from both domestic and international banks at an optimized cost. In addition, processes and policies related to such risks are overseen by senior management. The Company''s senior management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

Maturities of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

The Company from time to time in its usual course of business issues financial guarantees to certain subsidiaries, associates and joint ventures. Company has issued corporate guarantee for debt of Rs, 870.89 (March 31, 2017: Rs, 122.02). The outflow in respect of these guarantees will arise only upon default of the such subsidiaries and joint ventures/Associate. Rs, 381.74 (March 31, 2017: Rs, 66.70) is due for repayment within 1 year and Rs, 489.15 (March 31, 2017: Rs, 55.32) is due for repayment within 1 - 5 Years from the reporting date.

Financing arrangements

The Company has sufficient sanctioned line of credit from its bankers / financiers; commensurate to its business requirements. The Company reviews its line of credit available with bankers and lenders from time to time to ensure that at all point of time there is sufficient availability of line of credit.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed in the ordinary course of business to risks related to changes in foreign currency exchange rate and interest rate.

(a) Market Risk - Foreign Exchange

Foreign exchange risk arises on all recognized monetary assets and liabilities which are denominated in a currency other than the functional currency of the Company. The Company has foreign currency trade payables, receivables and borrowings. However, foreign exchange exposure mainly arises from borrowings and trade payables denominated in foreign currencies.

Foreign currency risk is managed by following established risk management policies, which inter alia includes monitoring the movements in currencies in which the borrowings / capex vendors are payable and hedging the exposure to foreign currency risk by entering into forward currency contracts, call options and currency swaps contracts.

The Company does not enter into or trade financial instrument including derivative for speculative purpose.

The Company has booked INR USD Cross Currency Swap Contracts of USD 3.50 (March 31, 2017 : USD 3.50) against the underlying INR borrowing of Rs, 215.71 (March 31, 2017 : Rs, 215.71). Outstanding at the year end for the same is INR borrowing is Rs, 8.12 and Currency Swap Contract amount is USD 0.13. The actual interest earned on notional INR deposit, interest paid on notional USD borrowing and marked to market loss on USD exposure aggregating net gain / (loss) of Rs, 0.70 (March 31,

2017 : Rs, 14.76) are included under finance cost in Note 3.05 in Notes to the financial statements.

Foreign currency sensitivity

1 % increase or decrease in foreign exchange rates will have the following impact on profit/loss before tax and on other components of equity

(b) Market Risk - interest Rate

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because the Company has borrowed funds substantially at floating interest rates. The interest rate risk is managed by the Company by the use of interest rate swap and by monitoring monthly cash flow which is reviewed by management to prevent loss of interest.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates on the borrowings at the end of the reporting period. For floating rate borrowings, the analysis is prepared assuming the amount of borrowing outstanding at the end of the reporting period was outstanding for whole of the year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel.

The sensitivity disclosed in the above table is attributable to variable interest rate borrowings and the interest swaps. The above sensitivity analysis is based on a reasonably possible change in the under-lying interest rate of the Company''s borrowings in INR & USD (being the significant currencies in which it has borrowed funds), while assuming all other variables (in particular foreign currency rates) to be constant.

4.13 Duties and taxes of Rs, 2.01 for the period prior to 2016-17 and Rs, 0.50 for the year 2016-17, being Prior Period expenses, have been recognized in the respective period by restating relevant previous year figures

EHTC1 recent pronouncements

On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach-Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch-up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company has adopted the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly, comparatives for the year ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is being ascertained.

RELATED PARTY disclosures

A. Names of related parties and related party relationship

i) Under Control of the Company

1 Wholly Owned Subsidiaries Bee Network & Communications Private Limited

Binary Technology Transfers Private Limited

Hath way C-Net Private Limited

Hath way Enjoy Cable Network Private Limited

Hath way Gwalior Cable & Datacom Private Limited

Hath way Internet Satellite Private Limited

Hath way JMD Farukhabad Cable Network Private Limited

Hath way Media Vision Private Limited

Hath way Space Vision Cabletel Private Limited

Hath way United Cables Private Limited

Hath way Universal Cabletel & Datacom Private Limited (till March 16, 2017)

Ideal Cables Private Limited

ITV Interactive Media Private Limited

Liberty Media Vision Private Limited

Vision India Networks Private Limited

Win Cable and Datacom Private Limited

Hath way Broadband Private Limited

Hath way New Concept Cable & Datacom Private Limited

Hath way Mantra Cable & Datacom Private Limited

Hath way Software Developers Private Limited (w.e.f December 29, 2016)

UTN Cable Communications Private Limited (w.e.f February 16, 2017)

Hath way Mysore Cable Network Private Limited (w.e.f March 25, 2017)

Hath way Krishna Cables Private Limited

Hath way Digital Private Limited (f.k.a Hath way Datacom Central Private Limited)

2 Other - Subsidiaries Chennai Cable Vision Network Private Limited

Channels India Network Private Limited Elite Cable Network Private Limited

UTN Cable Communications Private Limited (till February 16, 2017) Hath way Software Developers Private Limited (till December 29, 2016) Hath way Nashik Cable Network Private Limited Hath way Bhawani Cabletel and Datacom Limited Hath way Kokan Crystal Cable Network Private Limited

ii) Other Related parties :

1 Joint Ventures Hath way Digital Saharanpur Cable & Datacom Private Limited

GTPL Hath way Limited (f.k.a.GTPL Hath way Private Limited) (till June 30, 2017) Hath way Sai Star Cable & Datacom Private Limited Hath way MCN Private Limited

Hath way Channel 5 Cable and Datacom Private Limited

Net 9 Online Hath way Private Limited

Hath way Cable MCN Nanded Private Limited

Hath way Latur MCN Cable & Datacom Private Limited

Hath way Palampur Cable Network Private Limited

Hath way Mysore Cable Network Private Limited (till March 25, 2017)

Hath way ICE Television Private Limited

Hath way Sonali Om Crystal Cable Private Limited

Hath way Dattatray Cable Network Private Limited

Hath way Prime Cable & Datacom Private Limited

Hath way SS Cable & Datacom - LLP

Hath way Patiala Cable Private Limited (f.k.a Hath way Sukhamrit Cable & Datacom Private Limited) (Refer Note 4.19)

2 Joint Ventures of Subsidiaries Hath way CCN Multinet Private Limited

Hath way CCN Entertainment (India) Private Limited Hath way CBN Multinet Private Limited Hath way CCN Multi Entertainment Private Limited Hath way Universal VCN Cablenetwork LLP Hath way Bhawani NDS Network Private Limited

3 Associate Companies Pan Cable Services Private Limited

Hath way VCN Cablenet Private Limited

GTPL Hath way Limited (f.k.a.GTPL Hath way Private Limited) (w.e.f. June 30, 2017)

4 Post Employment benefit plan Hath way Cable and Datacom Limited Employee Group Gratuity Assurance

Scheme

5 Key Managerial Personnel Executive Directors:-

Mr. Jagdish Kumar G Pillai - Managing Director & CEO (till November 25, 2016) Mr. Rajan Gupta Managing Director (w.e.f November 25, 2016)

Non Executive Directors :-

independent Director

Mr. Sridhar Gorthi

Mr. Sasha Gulu Mirchandani

Mr. Devendra Shrotri

Ms. Ameeta A Parpia

Non independent Directors

Mr. Rajan B Raheja

Mr. Viren R Raheja

Mr. Akshay R Raheja

Mr. Vinayak P Aggarwal

* Amount less than Rs, 50,000

The Company has extended aggregate loan of Rs, 151.46 to various subsidiaries, joint ventures and associates, out of which Rs, 21.24 is interest free. The Company had invested in 5% Non cumulative Redeemable Preference shares issued by Hath way Digital Private Limited aggregating to Rs, 0.05 (March 31, 2017 : Rs, 0.05). The Company has given Corporate financial Guarantees of Rs, 28.44 (March 31, 2017 Rs, 120.93) on behalf of GTPL Hath way Limited, Rs, 842.45 (March 31, 2017: Rs, Nil) on behalf of Hath way Digital Private Limited and Rs, Nil (March 31, 2017: Rs, 1.09) on behalf of Hath way MCN Private Limited. The Company had fair valued investment in some of its subsidiaries, Joint ventures and associates and recognized net gain aggregating to Rs, 327.43 till March 31, 2018 (March 31, 2017 : Rs, 378.69)

Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.

(a) None of the loanee have made, per se, investment in the shares of the Company.

(b) Investment made by Hath way Media Vision Pvt. Ltd in Hath way Bhawani Cabletel & Datacom Ltd - 21,60,000 equity shares of Rs, 2.46.

(c) Investment made by Hath way New Concept Cable & Datacom Pvt Ltd in Hath way Media Vision Private Limited - 2,000 preference shares of Rs, 0.00

(d) Investment made by Hath way New Concept Cable & Datacom Pvt Ltd in Win Cable & Datacom Private Limited -5,000 preference shares of Rs, 0.01

TRANSFER OF CATV BUSINESS THROUGH SLUMP SALE

Pursuant to receipt of approval to the internal restructuring from the board of directors and the shareholders, the company had transferred its Cable Television business by way of slump sale to its wholly owned subsidiary Hath way Digital Private Limited (earlier known as Hath way Datacom Central Private Limited) (âthe said subsidiaryâ) with effect from close of business hours as of March 31, 2017 for a total consideration of '' 302. In view of the same, all assets and liabilities including borrowings & contingent liabilities attributed to the Cable Television business got vested in the said subsidiary. The company has completed all necessary documentation to give effect to this transfer including receipt of necessary approvals from the lenders for said restructuring. However in case of few lenders filling of relevant forms for change in the charge documents inter-se between the company and the said subsidiary with the Registrar of Companies is under process. In view of the aforesaid transfer of Cable Television business of the Company, the previous year''s figures are not comparable with the figures for the current financial year.

6 | In previous reporting period, the investments in equity shares of Hath way Patiala Cable Private Limited (formerly known as Hath way Sukhamrit Cable & Datacom Private Limited) was classified as investments in Joint Venture. However, the management no longer intends to exercise its influence in operations of Hath way Patiala Cable Private Limited. Accordingly, such interest in Hath way Patiala Cable Private Limited has been reclassified and measured as financial assets in terms of Ind AS 109. Considering the financial statements of earlier years and the future plans of Hath way Patiala Cable Private Limited, the management is of the view that fair value of the equity shares of Hath way Patiala Cable Private Limited would be at least equal to its carrying amount.

7 | Previous year''s figures have been reclassified / regrouped, wherever necessary.

Mar 31, 2017

BACKGROUND

Hathway Cable and Datacom Limited (âthe Company) is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. During the year, the Company carried on its activities as Multi System Operator (MSO) and engaged in distribution of television channels through analog and digital cable distribution network and internet services through cable. As stated in note no 4.23, the cable television business was transferred to a wholly owned subsidiary. Its equity shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India.

Authorization of standalone financial statements

The standalone financial statements were authorized for issue in accordance with a resolution of the directors on May 30, 2017.

a) Reconciliation of the number of shares outstanding as at the beginning and end of the reporting period:

b) Rights, Preference and restrictions attached to Shares;

Terms/ Rights attached to Equity Shares

The Company has issued only one class of equity shares having face value of Rs.2 (March 31, 2016 : Rs.2, April 1, 2015 : Rs.2) per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by the shareholders.

c) The details of shareholders holding more than 5% shares in the Company:

d) Shares reserved for issue under options

Nil equity shares (March 31, 2016 : 5,000 equity shares, April 1, 2015 : 142,000 equity shares) of Rs.2 (March 31, 2016: Rs.2, April 1, 2015 : Rs.2) each towards outstanding employees stock option granted/ available for grant. Refer Note 4.07

1.1 OTHER EQUITY

Description of the nature and purpose of each reserve within equity is as follows:

(a) Retained Earning :

Retained earnings are the losses that the Company has incurred till date.

(b) Securities Premium :

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

2.01 CONTINGENT LIABILITIES

a) The Company has given a counter indemnity favoring the bankers to the extent of Rs.3.42 (March 31, 2016: Rs.9.21 & April 1, 2015: Rs.9.58) for issue of Bank Guarantees on behalf of the Company to various authorities/parties.

b) The Company has challenged levy of license fees for pure Internet services before Telecom Disputes Settlement & Appellate Tribunal (TDSAT). On merit of the case, TDSAT has granted stay till disposal of petition. The Company is contingently liable to the extent of Rs.71.45 (March 31, 2016 : Rs.33.55 & April 01,2015 : Rs.Nil). The Company has paid an amount of Rs.5.36 under protest.

c) Income Tax Matters

d) The minority shareholders of the erstwhile joint venture company, Hathway Rajesh Multichannel Pvt. Ltd., filed an arbitration petition against the Company before the High Court, Bombay, which was referred to a sole arbitrator in August 2016. The minority shareholders, in their statement of claim have sought, amongst other reliefs, payment of Rs.54.98 towards costs of STBs, charges under various heads allegedly wrongly debited by the Company etc. The Company has refuted the claims and has made counter claim of Rs.91.17 towards inter-alia outstanding content cost, loans, payments and damages/ compensation for the loss of financial and management credibility, goodwill etc. The matter is currently pending

e) Claims against the Company, other than those stated above, not acknowledged as debts are as under:

Pursuant to Business Transfer Agreement dated March 24, 2017, the Company has transferred it Cable Television business which inter alia includes claims against the Company not acknowledged as debts, by way of slump sale to its wholly owned subsidiary Hathway Digital Private Limited (HDPL). Accordingly, the details of such claims, litigation etc. relating to Cable Television business transferred to HDPL are not disclosed hereinabove.

2.02 financial corporate guarantee

The Company has given Corporate Guarantees of Rs.113.64 (March 31, 2016: Rs.126.23 & April 1, 2015: Rs.135.18) to Banks and Rs.8.38 (March 31, 2016: Rs.32.80 & April 1, 2015: Rs.32.80) to Others towards various credit facilities extended by them to the subsidiary company and Joint Ventures.

2.03 CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs.51.02 (March 31, 2016: Rs.63.88 & April 1, 2015: Rs.64.26).

As a part of business strategy, the Company has expanded its area of operations in various parts of the country by entering into arrangements with local partners. Such operations are in the form of subsidiaries/joint ventures. (Subsequently, some of such entities are converted into wholly owned subsidiaries.) Since operations of such entities are significantly dependent on the companyâs policies, the Company is committed to provide the required support towards the operations of such entities including financial support that may be required to meet commitments/obligations of such entities.

2.04 MATTERS RELATING To SUBSIDIARIES

Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd. And Hathway Internet Satellite Pvt. Ltd. were majority partners in a partnership firm, namely, M/s. Hathway Space Vision (the firm). The aforesaid majority partners of the firm had initiated legal action i.e. invoked arbitration proceedings, against the minority partner viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues and had made monetary claims against the minority partner. The minority partner had also filed certain counter claims against the wholly owned subsidiaries. After a long drawn legal battle, the firm stands dissolved as of July 8, 2011. The Court Receiver, High Court of Bombay has been appointed as the Receiver of the assets and business of the firm and Hathway Internet Satellite Private Limited has been appointed as the Agent of the Court Receiver. The issues concerning accounts and dissolution including adjudicating upon the original claims and counter claims made before the earlier Arbitrator are referred to Arbitration before Justice Srikrishna (Retd.). The Court Receiver had taken the possession of the movable assets found at the premises of the Firm and has appointed a valuer, the report thereof is pending. In the mean time, the Court Receiver has fixed an ad hoc royalty of Rs.0.01(March 31, 2016 : Rs.0.01) per month that is to be paid by the agent of the Court Receiver under order dated December 2, 2011. An application by way of chamber summons inter alia for setting aside the said order dated December 2, 2011 has been filed by the Company and Hathway Internet Satellite Private Limited in the High Court, Bombay which was disposed off. Majority Partners moved appeals being Appeal (L) No. 344 of 2017 and 403 of 2017, before the High Court of Bombay challenging the Order, which are pending. In the meantime, Majority Partners deposited a sum of Rs.0.16 with the Court Receiver as per the Order of the Honâble High Court dated February 20, 2017.

On May 5, 2017, both the Parties filed their Consent Terms in the High Court, Bombay wherein it is agreed by and between the parties that Majority Partners agrees to remove all moveable assets lying at premises as per the inventory and Reports of the Court Receiver, High Court, Bombay dated 14.09.2011 and 16.09.2011 and CTMS and digital equipment, at is cost and charges. It is further agreed by the Parties that the Court Receiver, High Court, Bombay appointed by an Order dated 08.07.2011, shall stand discharged without passing any accounts. It is agreed that the Binary Technologies Transfers Pvt. Ltd shall bear all the costs, charges, expenses and commission of the Court Receiver, High Court, Bombay. The Court Receiver shall refund all amounts to the Binary Technologies Transfers Pvt. Ltd after deducting its cost and charges. The Minority Partners confirms that they do not have any claim in respect of the amount deposited with the Court Receiver. This settlement is without prejudice to all the rights and contentions of parties in the Appeal pending before the Honâble Court.

The Company has investments in said fully owned subsidiaries namely Hathway Internet Satellite Pvt. Ltd. & Binary Technology Transfers Pvt. Ltd. of Rs.0.01 (March 31, 2016 :Rs.0.01 & April 1, 2015 :Rs.0.01) and Rs.0.01 (March 31, 2016 :Rs.0.01 & April 1, 2015 : :Rs.0.01) and Loans and advance of Rs.1.67 (March 31, 2016 :Rs.1.59 & & April 1, 2015 : :Rs.1.59), Rs.1.67 (March 31, 2016 :Rs.1.59 & & April 1, 2015 : :Rs.1.59) respectively which has been fully provided for in the books.

2.05 EXCEPTIONAL ITEMS

Pursuant to circular dated December 17, 2012 issued by the Delhi Entertainment Department, the MSOs were made responsible for collection and payment of Entertainment Tax for secondary points w.e.f. April 1, 2013. The Company challenged the constitutional vires of the said circular and filed writ petition in the matter before the High Court of Delhi. The High Court pronounced a favourable judgment stating that the liability to collect and deposit the Entertainment Tax for secondary points rests wholly and solely upon the LCOs, before and after March 31,2013, as they are the Proprietor of their individual cable TV network, and not the MSOs. Accordingly, the Company has reversed provision of Rs.9.70 made on account of Entertainment tax.

2.06 EMPLOYEE STOCK OPTION PLAN

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 (âThe Planâ). The Plan provides for issue of options (underlying equity share of Rs.10 each) to the persons specified in the scheme at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range of Rs.110.20 to Rs.157.30.

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

The value of the options granted is determined by the management based on the rates at which shares were allotted to the investors during the relevant year and the same has been considered as fair value of option.

2.07 EMPLOYEE Benefits

a) Defined Benefit Plans:

b) Defined Contribution Plans:

The Company operated defined benefits contribution retirment benefit plans for all qualifying employees.

The Total expenses recognised in the statement of Profit and Loss is Rs.3.24 (March 31, 2016: Rs.2.86) represents contribution payable to these plans by the Company at the rates specified in the rules of plan.

2.08 disclosures AS REQuiRED BY INDIAN ACCouNTING STANDARD (IND AS) 108 oPERATING SEGMENTS

As the Companyâs business activity falls within a single business segment viz. providing Cable Television network services, Internet Services and allied services which is considered as the only reportable segment and the revenue substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 âOperating Segmentsâ.

2.09 LEASES

(a) Finance Leases (As Lessee):

Lease rentals outstanding as at March 31, 2017 in respect of fixed assets taken on finance lease are as under:

Upon expiry of the original term lessor may offer lessee to purchase all of the equipments at nominal value

Finance Lease obligation of Non Current Borrowing (Ref: Note No: 2.15) include Rs.Nil (March 31, 2016: Rs.49.95 & April 1, 2015: 107.09) payable to lessor under finance lease arrangement.

(b) operating Leases (As Lessee): The Companyâs significant leasing arrangements in terms of Ind AS 17 on lease are in respect of Operating Leases for Premises and Equipments. The period of these leasing arrangements, which are cancellable in nature range between eleven months to six years and are renewable by mutual consent.

Rental Expenses debited to the Statement of Profit and Loss Rs.10.72 (March 31, 2016: Rs.11.07) Details of Cancellable Leases are as under:

Lease Expenses debited to the Statement of Profit and Loss Rs.27.39 (March 31, 2016: Rs.14.62) Some of these lease agreements have price escalation clauses

(d) The right to use granted to subsidiaries/local cable operators in respect of Access devices are not classified as lease transactions as the same are not for an agreed period of time.

2.10 CAPITAL MANAGEMENT

The Companyâs objective while managing capital is to maintain stable capital structure to support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and / or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital that would enable to maximise the return to stakeholders.

The Companyâs capital requirement is mainly to fund its business expansion and repayment of borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets.

The Company has adhered to material externally imposed conditions relating to capital requirements and there has not been any delay or default during the period covered under these financial statements with respect to payment of principal and interest. No lender has raised any matter that may lead to breach of covenants stipulated in the underlying documents.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents.

2.11 FINANCIAL INSTRUMENTS :

(i) Methods & assumption used to estimates the fair values

The following methods and assumptions were used to estimate the fair values:

a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, other bank balances, deposits, loans to employees, trade payables, payables for acquisition of non- current assets, demand loans from banks and cash and cash equivalents are considered to be the same as their fair values.

b) The fair values for long term loans, long term security deposits given and remaining non current financial assets were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.

c) The fair values of long term security deposits taken and non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

d) For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

(ii) Categories of financial instruments

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and

Level 3: inputs which are not based on observable market data

2.12 FINANCIAL RISK MANAGEMENT

The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Board of Directors. The details of different types of risk and management policy to address these risks are listed below:

The business activities of Company activities expose it to financial risks namely Credit risk, Liquidity risk and Market risk. In order to minimise any adverse effects on the financial performance of the Company, it uses derivative financial instruments, such as foreign exchange forward contracts, foreign currency swap contracts, call options are entered to hedge certain foreign currency risk exposures and follows policies set up by a Treasury department under policies approved by the Board of Directors.

1. credit risk

Credit risk arises from the possibility that counter party will cause financial loss to the company by failing to discharge its obligation as agreed.

The Companyâs exposure to credit risk arises mainly from the trade receivables, loans given, financial guarantee contract and derivative financial instruments.

The Companyâs major revenue streams arises from services provided to end use customers in the form of monthly subscription income. The trade receivables on account of subscription income are typically un-secured and derived from sales made to large number of independent customers. As the customer base is distributed economically and geographically, there is no concentration of credit risk. The credit period provided by the Company to its end use customers generally ranges from 0 to 30 days.

The Trade Receivables includes amount due from disconnected / inactive customers / LCOs with whom no interconnect documents have been executed and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions as per expected credit loss model have been made.

2. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from both domestic and international banks at an optimised cost. In addition, processes and policies related to such risks are overseen by senior management. The Companyâs senior management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.

Maturities of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

The Company from time to time in its usual course of business issues financial guarantees to certain subsidiaries and joint ventures. Accordingly, as on March 31, 2017, March 31, 2016 and April 1, 2015 Company has issued corporate guarantee for debt of Rs.122.02, Rs.104.81 and Rs.125.77 respectively. The outflow in respect of these guarantees will arise only upon default of the such subsidiaries and joint ventures. Rs.66.70 is due for repayment within 1 year and Rs.55.32 is due for repayment within 1 - 5 Years from the reporting date.

Financing arrangements

The Company has sufficient sanctioned line of credit from its bankers / financiers; commensurate to its business requirements. The Company reviews its line of credit available with bankers and lenders from time to time to ensure that at all point of time there is sufficient availability of line of credit.

3. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed in the ordinary course of business to risks related to changes in foreign currency exchange rate and interest rate.

a) Market Risk - Foreign Exchange

Foreign exchange risk arises on all recognised monetary assets and liabilities which are denominated in a currency other than the functional currency of the Company. The Company has foreign currency trade payables, receivables and borrowings. However, foreign exchange exposure mainly arises from borrowings and trade payables denominated in foreign currencies.

Foreign currency risk is managed by following established risk management policies, which inter alia includes monitoring the movements in currencies in which the borrowings / capex vendors are payable and hedging the exposure to foreign currency risk by entering into forward currency contracts, call options and currency swaps contracts.

The Company does not enter into or trade financial instrument including derivative for speculative purpose

The carrying amount of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows

The Company has booked INR USD Cross Currency Swap Contracts of USD 3.50 (March 31, 2016 : USD 3.50) against the underlying INR borrowing of Rs.215.71 (March 31, 2016 : Rs.215.71). Outstanding at the year end for the same is INR borrowing is Rs.25.09 and Currency Swap Contract amount is USD 0.41. The actual interest earned on notional INR deposit, interest paid on notional USD borrowing, Exchange fluctuation on payment/ settlement of principal amount and marked to market loss on USD exposure aggregating net gain / (loss) of Rs.14.76 (March 31, 2016 : Rs.0.25) are included under finance cost in note number 3.05 in Notes to the financial statements.

Foreign currency sensitivity

1 % increase or decrease in foreign exchange rates will have the following impact on loss before tax and on other components of equity

b) Market Risk - interest Rate

Interest rate sensitivity analysis

The sensitivity disclosed in the above table is attributable to variable interest rate borrowings and the interest swaps. The above sensitivity analysis is based on a a reasonably possible change in the under-lying interest rate of the Companyâs borrowings in INR & USD (being the significant currencies in which it has borrowed funds), while assuming all other variables (in particular foreign currency rates) to be constant.

In addition to above, the Company has extended aggregate loan of Rs.37.35 to various subsidiaries and Joint Ventures, out of which Rs.16.12 is interest free. The Company had invested in 5% Non cumulative Redeemable Preference shares issued by Hathway Digital Pvt Ltd aggregating to Rs.0.05 (March 31, 2016 : 0.05, April 01,2015 : 0.05). The Company has given Corporate financial Guarantees of Rs.120.93 (March 31, 2016 Rs.150.93) on behalf of GTPL Hathway Ltd., Rs.Nil (March 31, 2016: Rs.5.00) on behalf of Hathway Datacom Central Pvt. Ltd. and Rs.1.09 (March 31, 2016: Rs.3.1) on behalf of Hathway MCN Pvt Ltd.The Company had fair value investment in some of its subsidiaries and Joint Ventures and recognised net gain aggregating to Rs.378.69 (March 31, 2016 ; 378.69)

Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.

(a) None of the loanee have made, per se, investment in the shares of the Company.

(b) Investment made by Hathway Media Vision Pvt. Ltd in Hathway Bhawani Cabletel & Datacom Ltd - 21,60,000 equity shares of Rs. 2.46.

(c) Investment made by Hathway New Concept Cable & Datacom Pvt Ltd in Hathway Media Vision Private Limited - 2,000 preference shares of Rs. 0.00

(d) Investment made by Hathway New Concept Cable & Datacom Pvt Ltd in Win Cable & Datacom Private Limited - 5,000 preference shares, of Rs. 0.01

2.13 The Company being engaged in the business of providing infrastructure facilities, the provision of section 186 of the Companies Act, 2013 are not applicable and accordingly, disclosure of details with respect to Loan given, guarantee given, and security made during the Financial Year 2016-17 in terms of Section 186 (4) of the Act is not applicable. Disclosure of Investment made during Financial Year 2016-17 and Financial Year 2015-16 is as follows:-

2.14 The earlier discussion of demerger of the ISP Business Undertaking of the Company to the wholly owned subsidiary viz Hathway Broadband Pvt Ltd as of April 1, 2015 (the Appointed Date), which was pending before the High Court of Bombay, was withdrawn during the year after taking requisite approval from the shareholders.

2.15 Pursuant to introduction of Digital Addressable System (DAS), in terms of TRAI Regulations the MSOs are required to inter alia enter into inter connect agreements with local cable operators in notified cities. The Company has not been able to complete the above process successfully in networks where there are cases of resistance from local cables operators. Pending execution of documents, income recognized is based on various underlying factors including rate charged by other MSOâs, ongoing negotiations with cable operators etc. The management has reviewed the outstanding receivables and has made suitable provisioning, wherever required and is confident that it is stated at realizable amount.

2.16 The Company has itâs presence in various cities, which form part of phase III of DAS rollout in terms of MIB notification. Preparatory to DAS rollout dates, the Company had established required infrastructure. The monetization of these investments is subject to successful DAS implementation and the management is hopeful of the same.

2.17 The board of directors of 5 wholly owned subsidiaries of the Company viz. Hathway New Concept Cable and Datacom Private Limited, Hathway Krishna Cable Private Limited, UTN Cable Communications Private Limited, Hathway software Developers Private Limited and Hathway Mysore Cable Network Private Limited have resolved, subject to necessary approvals, to demerge their cable television business to Hathway Digital Private Limited with effect from closing hours of March 31, 2017.

2.18 TRANSFER OF CATV BUSINESS THROUGH SLUMP SALE

Pursuant to receipt of approval to the internal restructuring from the board of directors and the shareholders and after seeking in-principle prior approvals from all the lenders, the Company transferred its Cable Television business by way of slump sale to its wholly owned subsidiary Hathway Digital Private Limited (earlier known as Hathway Datacom Central Private Limited) (âthe said Subsidiaryâ) with effect from close of business hours as of March 31, 2017 for a total consideration of Rs.302. In view of the same, all assets and liabilities including borrowings & contingent liabilities attributed to the cable television business got vested in the said Subsidiary. The Company has intimated the effect of the same to its lenders and the lenders are inter alia in the process of completing documentations in this regard. The disclosures in note no. 2.15 relating to securities offered to the banks and others against borrowings extended by them is based on terms of Business Transfer Agreement executed to give effect to slump sale, however, execution of necessary documents and filing of relevant forms with the office of the Registrar of Companies is under progress.

2.19 There is an unclaimed share application money of Rs.29,375 (Amount in â) required to be transferred to Investor Education and Protection Fund (IEPF). The Company is in process of transferring such amount to IEPF, in accordance with the provisions of section 125 of the Companies Act, 2013 and relevant rules thereunder.

Foot notes for ind AS adjustments Note 1: Property, Plant and Equipment

The Company has availed the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipments and Intangibles 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.

Note 2: Non current investments - Investments in equity instruments (a) Investment in subsidiaries and joint ventures and associates :-

Under Ind AS, a first- time adopter can measure investments in each subsidiary, joint venture and associate at cost determined in accordance with Ind AS 27or at deemed cost. The deemed cost of the investment can be the fair value of the investment at the transition date or the previous GAAP carrying amount. The Company has opted to value its investments in certain subsidiaries and joint ventures at deemed cost using the fair value option.

(b) Investment in Other companies :-

Under previous GAAP, non current investment in equity instruments of other companies were measured at cost less provision for dimunition (other than temporary). Under Ind AS, the Company has recognised such investments at FVTOCI through irrecovable option. On the date of transition to Ind AS, the difference between the fair value of NonCurrent Investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in decrease in the carrying amount of these investments which has been recognised directly in opening retained earnings.

Note 3: Current investments - Investments in Mutual funds

Under previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS, these investments have been classified as FVTPL on the date of transition.

Note 4: Loss allowance on Trade receivables

Under the previous GAAP, the Company has created provision for impairment of receivables consisting specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on the Expected Credit Loss Model which has led to an increase in the amount of provision as on the date of transition.

Note 5: Security deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS and the difference between the fair value and the transaction value of the security deposit has been recognised as prepaid rent.

Note 6: Financial corporate guarantee

The Company has issued corporate guarantee on behalf of its joint ventures for the borrowings taken by them. Under previous GAAP, financial guarantee contracts were not accounted for. The Company has recognised finance guarantee obligation at fair value with corresponding recognition in investments. Interest income is recognised with a corresponding reduction from Finance Guarantee Obligation.

Note 7: Investment in Preference Shares

The preference shares do not meet the definition of equity instrument as per Ind AS 32 and are held to collect contractual cashflows, hence they are fair valued at amortised cost. The fair value is determined using the present value method using the discount rate which is the borrowing market rate. The difference between the amount paid for acquiring the preference shares and its fair value is considered as investment in equity. The Company has accrued interest using the effective interest rate (discount rate) over the term of the preference shares.

Note 8: Defined benefit obligations

Under previous GAAP, actuarial gains and losses were recognised in Statement of Profit and Loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss.

Note 9: Borrowings

Under previous GAAP, in case of fixed interest rate borrowings, transaction cost incurred were charged to statement of profit and loss on straight line basis over the tenure of the borrowings. As per Ind AS 109, the transaction costs incurred towards origination of borrowings are deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying effective interest rate method (i.e., amortised cost method).

As per Ind AS 109, for variable interest rate borrowings, the transaction costs incurred towards origination of borrowings are deducted from the carrying amount of borrowings on initial recognition. Accordingly, the unamortised balance of transaction cost has been deducted from the carrying amount of the borrowings as on the date of transition.

Note 10: Derivative Instruments - Forward contracts

Under previous GAAP, there is concept of deferred premium/discount which is recognised based on difference between spot rate and forward rate and amortised over the tenure of the forward contract. Under Ind AS, forward contract is required to accounted at fair value. Accordingly, the Company has reversed deferred premium outstanding in the books of accounts.

Note 11: Loan given to subsidiaries and joint ventures

Under previous GAAP, interest free loans given to subsidiaries and joint ventures are accounted at their transaction value. Under Ind AS, the Company has discounted the interest free loans given to subsidiaries and joint ventures with corresponding increase in the investment.

Note 12: Deferment of activation income

Under previous GAAP, activation income is recognized upfront as revenue. Under Ind AS, supply of services involving a non-refundable fee along with subsequent periodic payments for services in future are construed as linked transactions. All linked transactions where individual transactions have no commercial meaning on their own and occurrence of one is dependent on occurrence of another are to be evaluated on combined basis. Activation fee, which in substance is an advance payment for future services or the ongoing services being provided are essential to the subscribers receiving the expected benefit of the upfront payment of activation fee. Accordingly, activation fee is earned as services are provided over the term of the arrangement and need to be deferred over the expected customer relationship period (i.e. expected life of the customer).

Note 13: Other Comprehensive income

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, items of income or expense that are not recognised in statement of profit and loss are recognised as âother comprehensive incomeâ which includes remeasurement of defined benefit plans.

Note 14: Inclusion of Bank Overdraft for the purpose of Cashflow

Under Ind AS, bank overdrafts which are repayable on demand and form an integral part of the Companyâs cash management system and are included in cash and cash equivalents for the purpose of presentation of Statement of Cash flows. Whereas under previous GAAP, there was no similar guidance and hence, bank overdrafts were considered similar to other borrowings and the movements therein were reflected in cash flows from financing activities.

Mar 31, 2016

1. CONTINGENT LIABILITIES

a) The Company has given a counter indemnity favouring the bankers to the extent of Rs. 9.21 (March 31, 2015: Rs. 9.58) for issue of Bank Guarantees on behalf of the Company to various authorities/parties.

b) The Company has given Corporate Guarantees of Rs. 126.23 (March 31, 2015: Rs. 135.18) to Banks & Rs. 32.80 (March 31, 2015: Rs. 32.80) to Others towards various credit facilities given by the Bank & Others to some of its subsidiary companies.

c) Few Broadcasters and the Company have made claims and counter claims against each other relating to pay channel cost. Claims of such broadcasters, not acknowledged as liabilities, aggregate to Rs. 0.20 (March 31, 2015: Rs. 21.8) to the extent not settled, are disclosed under contingent liabilities as Claims against the Company not acknowledged as debts.

d) In the state of Telangana, VAT authorities have considered Set top boxes deployed as sale and raised demand of Rs. 18.05 (March 31, 2015 : Rs. 18.05) for the period April, 2011 to May 31, 2013.The Company''s appeal is pending before Tribunal. The Company has deposited 50% of the amount demanded. The authorities have also levied penalty @ 100% of demand without giving an opportunity of hearing. On writ petition, Andhra Pradesh High Court has directed to initiate fresh proceedings. Since this demand was based on an advance ruling order given by relevant authority in some other case, the Company being an affected party, has filed review petition before the Advance Ruling authority. The matter has been admitted and heard, however, the decision is awaited.

e) In view of circular dated December 17, 2012 of the Delhi Entertainment Tax Department, MSOs are responsible for collection and payment of Entertainment Tax effective April 1, 2013, while LCOs are liable to collect and pay tax till that date. Pursuant to this circular, an assessment order has been passed against the Company raising a demand of Rs. 5.95 (including penalty of Rs. 2.89 & interest of Rs. 0.07) for the months of April 2013 and May 2013. Aggrieved by the said assessment order, the Company has challenged the vires of the above amendment brought about by the Entertainment Tax department by way of issue of a circular, instead of amending the charging section of the relevant Act and has filed a Writ petition before the High Court of Delhi. The petition was admitted and stay has been granted. While the Honorable High Court is yet to decide in the matter, the authorities have passed two assessment orders, first for the period June 2013 to March 2014 raising a demand of Rs. 27.22 (including penalty and interest of Rs. 12.26) and second for the period April 2014 to March 2015 for Rs. 33.61 (including interest and penalty of Rs. 15.65). In response to stay application filed by the Company against the fresh assessment orders, the honorable High Court has directed the department not to take any coercive measures against the Company till the writ petition is disposed off.The Hon''ble Court has heard the matter filed by the company, but it has yet to pronounce its final verdict.

During the period from December, 2013 to September, 2014, since the Company issued subscription invoices directly in the name of subscribers, charging Delhi Entertainment Tax in the same, it has acknowledged its liability to the extent of Rs. 9.70 (March 31, 2015 : Rs. 9.70) in its books of accounts. In view of the same, the aggregate amount of claims disputed by the Company is Rs. 57.08 (March 31, 2015 : Rs. 57.08). The Company has paid sum of Rs. 6.73 (March 31, 2015 : Rs. 6.73) against this demand.

f) Entertainment Tax Officer, Pune has raised demand for Entertainment Tax on secondary points up to October, 2014 amounting to Rs. 4.57. Writ petition has been filed before the Bombay High Court challenging the demand. Another writ petition has also been filed challenging the constitutional validity, enforceability and legality of the amendment in the Maharashtra Entertainments Duty Act, 1923 brought about w.e.f. June 25, 2014.

g) Karnataka VAT Department has reassessed VAT liabilities for the financial Years 2011-12, 2012-13 and 2013-14 stating that the amount realized as activation charges is sale of STBs and liable to VAT. The total tax liability is determined at Rs. 10.28. The Honorable High Court has admitted the writ petition and has granted an order of stay over recovery of taxes.

h) The Company has challenged levy of license fees for pure Internet services before Telecom Disputes Settlement & Appellate Tribunal (TDSAT). On merit of the case, TDSAT has granted stay till disposal of petition. The Company is contingently liable to the extent of Rs. 33.55 (March 31, 2015 : Rs. Nil). During the year, the Company has paid an amount of Rs. 5.36 (March 31, 2015 : Rs. Nil) under protest.

2. CAPITAL AND OTHER COMMITMENTS:

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs. 63.88 (March 31, 2015: Rs. 64.26).

The Company in its ordinary course of business has promoted / acquired interest in various entities. Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company is committed to provide operating and financial support to these entities as and when required.

3. MATTERS RELATING TO SUBSIDIARIES:

Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd. and Hathway Internet Satellite Pvt. Ltd. were majority partners in a partnership firm, namely, M/s. Hathway Space Vision (the firm). The aforesaid majority partners of the firm had initiated legal action i.e. invoked arbitration proceedings, against the minority partner viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues and had made monetary claims against the minority partner. The minority partner had also filed certain counter claims against the wholly owned subsidiaries. After a long drawn legal battle, the firm stands dissolved as of July 8, 2011. The Court Receiver, High Court of Bombay has been appointed as the Receiver of the assets and business of the firm and Hathway Internet Satellite Private Limited has been appointed as the Agent of the Court Receiver. The issues concerning accounts and dissolution including adjudicating upon the original claims and counter claims made before the earlier Arbitrator are referred to Arbitration before Justice Srikrishna (Retd.). The Court Receiver had taken the possession of the movable assets found at the premises of the Firm and has appointed a valuer, the report thereof is pending. In the mean time, the Court Receiver has fixed an ad hoc royalty of Rs. 0.01 (March 31, 2015 : Rs. 0.01) per month that is to be paid by the agent of the Court Receiver under order dated December 2, 2011. An application by way of chamber summons inter alia for setting aside the said order dated December 2, 2011 has been filed by the Company and Hathway Internet Satellite Private Limited in the High Court, Bombay which is pending. The Court Receiver has taken back possession of the suit premises from Hathway Internet Satellite Pvt. Ltd.

The Company has investments in said fully owned subsidiaries namely Hathway Internet Satelite Pvt. Ltd. & Binary Technology Transfers Pvt. Ltd. of Rs. 0.01 (March 31, 2015 : Rs. 0.01) and Rs. 0.01 (March 31, 2015 : Rs. 0.01) and Loans and advance of Rs.1.59 (March 31, 2015 : Rs. 1.59), Rs. 1.59 (March 31, 2015 : Rs. 1.59) respectively which has been fully provided for in the books.

4. The Trade Receivables includes amount due from disconnected / inactive customers / LCOs with whom no inter-connect documents have been executed and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions have been made. In the opinion of the Board, long-term Loans & Advances, Trade Receivables and current assets have a realizable value in the ordinary course of business not less than the amount at which they are stated in the Balance Sheet.

5. EXCEPTIONAL ITEMS:

a) The Company in its ordinary course of business has promoted / acquired interest in various entities. The Company''s exposure to these entities on account of Investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Trade Receivables is Rs. 479.82 (March 31, 2015: Rs. 407.15 ), Rs. 137.86 (March 31, 2015: Rs. 84.63) and Rs. 100.15 (March 31, 2015: Rs. 71.47 ) respectively. The Company''s exposure to such loss making entities on account of investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Trade Receivables is Rs. 190.55 (March 31, 2015: Rs. 41.53), Rs. 123.69 (March 31, 2015: Rs. 70.31) and Rs. 59.98 (March 31, 2015: Rs. 35.66) respectively. The Company has made provision on overall basis of Rs. 55.98 (March 31, 2015: Rs. 25.73), Rs. 66.30 (March 31, 2015: Rs. 66.30) and Rs. 27.66 (March 31, 2015: Rs. 25.32) against such Investments, Loans and Advances and Trade Receivables respectively.

Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide financial support to these entities. The provisions made during the year include the amounts advanced during the year.

b) There are certain ongoing disputes relating to performances as well as certain operational disagreements in case of 1) Hathway Sai Star Cable And Datacom Private Limited, 2) Hathway Rajesh Multichannel Private Limited, 3) Hathway Dattatray Cable Network Private Limited and 4) Hathway Sonali Om Crystal Cable Private Limited, the subsidiaries of the Company, where minority partners hold 49% of equity. The exposure of the Company by way of investment, loans and advances and receivables is Rs. 54.94, Rs. 25.38, and Rs. 20.30 respectively. The financial statements of these subsidiaries for past two years have not been finalized and hence not audited. Considering the provisions of the joint venture agreements executed with such minority partners, the Company is hopeful of resolving the issues amicably. Pending such resolution, on conservative basis, the Company has made provision of Rs. 32.60 against the above exposure.

6. OUTSTANDING LETTER OF CREDIT:

Outstanding Letters of Credit Rs. 24.15 (March 31, 2015: Rs. 77.98) secured against assets acquired under LC facility, hypothecation of present and future current assets of the Company and extension of pari passu hypothecation of present and future movable fixed assets of the Company.

8. EMPLOYEE STOCK OPTION PLAN:

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 ("The Plan"). The Plan provides for issue of options (underlying equity share of Rs. 10 each) to the persons specified in the scheme at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range of Rs. 110.20 to Rs. 157.30.

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

The value of the options granted is determined by the management based on the rates at which shares were allotted to the investors during the relevant year and the same has been considered as fair value of option.

9. EMPLOYEE BENEFITS:

a) Defined Benefit Plans:

The present value of the defined benefit obligations and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date.

10. SEGMENTAL REPORTING:

The Company is a Multi System Operator providing Cable Television Network Services, Internet Services and allied services which is considered as the only reportable segment in terms of Accounting Standard 17 on Segment Reporting. The Company''s operations are based in India.

11. The Company being engaged in the business of providing infrastructure facilities, the provision of section 186 of the Companies Act, 2013 are not applicable and accordingly, disclosure of details with respect to Investment made, Loan given, gurantee given, and security made during the Financial Year 2015-16 in terms of Section 186 (4) of the Act is not applicable.

12. During the year under review, the Company has not capitalized any borrowing cost in the absence of acquisition of any qualifying assets.

13. During the previous year, the enactment of the Companies Act, 2013 requires that the Company should reassess useful life of its fixed assets and provide depreciation based on such re-assessment with effect from April 1, 2014. During the previous year ended March 31, 2015, the Company had decided to provide depreciation on all fixed assets, except Set top boxes on straight line basis (SLM) as against written down value basis (WDV) based on useful life specified in Schedule II to the said Act. There is no change in the method of depreciation for Set top boxes.

This change had resulted in net surplus of Rs. NIL (March 31, 2015: Rs. 64.02) and was disclosed as Exceptional Items Based on transitional provision provided in Note 7 (b) of the Schedule II to the Act, the charge to retained earnings in respect of assets having no useful life as on effective date, net of deferred tax is Rs. Nil (March 31, 2015: Rs. 12.56)

14. DEFERRAL/CAPITALIZATION OF EXCHANGE DIFFERENCES

The Company has capitalized exchange gain / (loss) arising on long-term foreign currency loan amounting to Rs. 38.37 [March 31, 2015: Rs. (8.64)] to the cost of plant and equipments. The Company has also capitalized exchange gain / (loss) amounting to Rs. (0.86) arising on long-term foreign forward contract undertaken to partially hedge the foreign current loan to the cost of plant and equipments [March 31, 2015: Rs. 11.10]

15. The Company has booked INR USD Cross Currency Swap Contracts of USD 3.50 (March 31, 2015 : USD 3.50) against the underlying INR borrowing of 215.71 (March 31, 2015 : 215.71). The actual interest earned on notional INR deposit, interest paid on notional USD borrowing and marked to market loss on USD exposure aggregating net gain / (loss) of Rs. 0.25 (March 31, 2015 : Rs. (0.35)) are included under finance cost in note number 3.08 in Notes to the financials Statement.

16. Rs. figures are mentioned in Crores unless otherwise stated.

17. The board of directors of the Company has approved a scheme of arrangement u/s 391-394 of the Companies Act,1956 where by ISP Business Undertaking of the Company gets transferred and vest into one of the wholly owned subsidiary viz. Hathway Broadband Pvt. Ltd. (HBPL) as of April 1, 2015 (the Appointed Date), subject to necessary approvals including approvals of the shareholders, High Court of Bombay and the Department of Telecommunications, Government of India.

As per the scheme, the Company is required to pay consideration of Rs. 98.05 crores in cash. The parties have also agreed that, in the intervening period the Company will carry on the said business for and on behalf of HBPL. The Company has obtained the approvals from the concerned stock exchanges and is in the process of securing NOC from its secured lenders. Subsequently, the petition will be filed with the High Court. Pending approval, no effect of the scheme has been given in the financial statements

18. Pursuant to introduction of Digital Addressable System (DAS), in terms of TRAI Regulations the Company is required to inter alia enter into inter connect agreements with local cable operators in notified cities. However, due to market conditions, the Company is facing some resistance from Local Cable Operators. Pending execution of documentations, income recognized is based on various underlying factors including rate charged by other MSO''s, ongoing negotiations with cable operators etc. The management has reviewed the outstanding receivables and is confident that it is stated at realizable amount.

19. The Company has it''s presence in various cities, which form part of phase III of DAS rollout in terms of TRAI regulations. DAS rollout is sub-judice in certain cities. Preparatory to DAS rollout dates in each of these markets, the Company had established required infrastructure. The monetization of these investments is subject to successful DAS rolled out.

20. Mr. Jagdish Kumar G Pillai was reappointed as MD and CEO of the Company w.e.f. December 21, 2015 for a further period of 2 years. As required under Part II of Schedule V to the Companies Act, 2013, the Company has applied to the Central Government for approval of remuneration payable to him for the entire period of his reappointment on March 3, 2016. Post application, central government had sought some additional information, which have been already provided. The approval is awaited.

21. The Board of Directors of the Company has decided in its meeting held on May 26, 2016 to amalgamate certain wholly owned subsidiaries of the Company with effect from April 1, 2015 and are in the process of appointing lawyers and valuers to carry out necessary preparatory work. Such amalgamation would be in terms of provisions of section 391-394 of the Companies Act, 1956 and subject to requisite approvals. Pending finalization and approvals of the Scheme, no effect have been given of this proposed amalgamations in the financial results.

22. Previous year figures have been rearranged and regrouped wherever necessary.

Mar 31, 2014

Company overview

Hathway Cable and Datacom Limited (the Company) is a Public Company domiciled in India and incorporated underthe provisions of the Companies Act, 1956. The Company is Multi System Operator (MSO) engaged in distribution of television channels through analog and digital cable distribution network and internet services through cable. Its equity shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India.

1.01 CONTINGENT LIABILITIES (Rs. in Crores unless otherwise stated)

a) The Company has given a counter indemnity favouring the bankers to the extent of Rs. 3.90 (March 31, 2013: Rs. 9.20) for issue of Bank Guarantees on behalf of the Company to various authorities/parties.

b) The Company has given Corporate Guarantees ofRs. 115.08 (March 31, 2013: Rs. 74.45) to Banks & Rs. 32.80 (March 31, 2013: Rs. 32.80) to Others towards various credit facilities given by the Bank & Others to some of its subsidiary companies.

c) Few Boardcasters and the Company have made claims and counter claims against each other relating to pay channel cost. Claims of broadcasters amounting to Rs. 7.17 (March 31, 2013: Rs. 2.33) to the extent not settled, are disclosed under contingent liabilities as Claims against the Company not acknowledged as debts.

d) The relevant Authority under the Karnataka Sales Tax / VAT had initiated proceeding to reassess the Company''s liability for the financial years 2001-02 to 2008-09 on the argument that light energy created while using OFC network for the purposes of transmission is goods and hence liable to tax under relevant state legislation. On writ petition, the Karnataka High Court has held against the Company. On further appeal, the Honourable Supreme Court remanded the matter to the Tribunal. However, Sales Tax Tribunal did not entertain the appeal of the Company as no assessment was made.

The Assessing Officer, acting on Nil returns filed by the Company, has proposed to complete best judgment re- assessment to tax light energy as goods. This may result in approximate demand ofRs. 5.44 (March 31, 2013: Rs.5.44). The Company has filed a detailed reply to the show cause notice issued by the assessing officer and the matter is pending.

However, the Company do not anticipate any liability in view of the recent Karnataka High Court decision in a petition filed by BSNL wherein it was held that Artificially Created Light energy is not goods.

e) The Company has filed a petition before the Honourable Court of Andhra Pradesh challenging the vires of the amendmenttotheAndhra Pradesh Entertainment Tax Act, 1939 which has resulted inthe levying ofthe Entertainment Tax on MSOs. The demand on the Company is Rs. 3.46 (March 31, 2013 : Rs. 3.46). The petition has been admitted and the levy and the action pursuant thereto have been ordered to be stayed.

f) In the state of Andhra Pradesh, VAT authorities have considered Set Top Boxes deployed as sale and raised demand of Rs. 18.05 (March 31, 2013: Nil) for the period April 1, 2011 to May 31, 2013. The Company''s appeal is pending before tribunal. The Company has deposited 50% of the amount demanded. The authorities have also levied penalty @ 100% of demand without giving an opportunity of being heard to the Company. On writ petition, Andra Pradesh High Court has directed to initiate fresh proceedings.

This demand is based on a advance ruling order given by the relevant authority. The Company, being an affected party, has filed review petition before the Advance ruling Authority and the matter has been admitted and heard but the decision is awaited.

g) Pursuant to Circular dated December 17, 2012 issued by the Delhi Entertainment Tax Department, the MSOs have been made responsible for collection & payment of Entertainment Tax effective from the month of April''2013, while the Local Cable Operators (LCOs) continue to remain responsible for collection & payment of the tax up to the month of March''13.Further, the department has passed assessment order against the Company raising tax demand of Rs. 5.95 (including Penalty amount of Rs. 2.89 & interest amount of Rs. 0.07 for the m/o April''13 & May''13. Aggrieved by the said assessment order, the Company has challenged the vires of the above said amendment brought about by the Entertainment Tax department by way of issuing a Circular, instead of amending the charging section under the Act & filed a Writ Petition in the Hon''ble High Court of Delhi. The petition has been admitted and the levy of demand and the action pursuant thereto to have been ordered to be stayed. Further, pursuant to the undertaking given under duress to the department, to avoid the sealing of its control room at Delhi, the Company has deposited tax amount of Rs. 2.97 under protest & without prejudice to its rights & contentions including contentions made in its petition. The said amount is being shown as deposit in the accounts of the Company. Hence the balance Rs. 2.98 (March 31, 2013; Rs. Nil) included in Contingent Liability. The above matter is pending & subject to the outcome of the petition, the Company''s liability may extend to the period beyond the same considered in assessment order.

1.02 CAPITAL AND OTHER COMMITMENTS:

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs. 122.67 (March 31, 2013: Rs. 278.89).

The Company in its ordinary course of business has promoted / acquired interest in various entities. Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company is committed to provide operating and financial support to these entities.

1.03 MATTERS RELATING TO SUBSIDIARIES:

a) Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd.and Hathway Internet Satellite Pvt. Ltd. were majority partners in a partnership firm, namely, M/s. Hathway Space Vision (the firm). The aforesaid majority partners of the firm had initiated legal action i.e. invoked arbitration proceedings, against the minority partner viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues and had made monetary claims against the minority partner. The minority partner had also filed certain counter claims against the wholly owned subsidiaries After a long drawn legal battle, the firm stands dissolved as of July 8, 2011. The Court Receiver, High Court of Bombay has been appointed as the Receiver of the assets and business of the firm and Hathway Internet Satellite Private Limited has been appointed as the Agent of the Court Receiver. The issues concerning accounts and dissolution including adjudicating upon the original claims and counter claims made before the earlier Arbitrator are referred to Arbitration before Justice Srikrishna (Retd.). The Court Receiver had taken the possession of the movable assets found at the premises of the Firm and has appointed a valuer, the report thereof is pending. In the mean time, the Court Receiver has fixed an ad hoc royalty ofRs. 0.01 (March 31, 2013 : Rs. 0.01) per month that is to be paid by the agent of the Court Receiver under order dated December 2, 2011. An application inter alia for setting aside the said order dated December 2, 2011 has been filed by the Company and Hathway Internet Satellite Private Limited in the High Court, Bombay which is pending. The Court Receiver has taken back possession of the suit premises from Hathway Internet Satellite Pvt. Ltd.

The Company has investments in said fully owned subsidiaries namely Hathway Internet Satelite Pvt. Ltd. & Binary Technology Transfers Pvt. Ltd. ofRs. 0.01 (March 31, 2013 :Rs. 0.01) and Rs. 0.01 (March 31, 2013 :Rs. 0.01) and Loans and advance ofRs. 1.59 (March 31, 2013 :Rs. 1.59), Rs. 1.59 (March 31, 2013 :Rs. 1.59) respectively which has been fully provided for in the books.

b) The Company had filed petition to wind up Hathway Jai Mata Di Sherawali Cable & Datacom Private Limited (HJMD), a subsidiary company, on just and equitable ground. In view of the Management disputes with the other Shareholders, the Company has decided to take such an action. The Delhi High Court has since passed the necessary order to liquidate HJMD and the investment of Rs. Nil (March 31, 2013 : Rs. 0.80) and Loans & Adances of Rs. Nil (March 31, 2013 : Rs. 0.54) & receivables ofRs. Nil (March 31, 2013 : Rs. 0.75) which was fully provided in earlier years, has been written off from the books during the previous year.

1.04 The Trade Receivables includes amount due from disconnected / inactive customers / LCOs with whom no inter-connect documents have been executed and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions have been made. In the opinion of the Board, long-term Loans & Advances, Trade Receivables and Current Assets have a realisable value in the ordinary course of business not less than the amount at which they are stated in the Balance Sheet.

1.05 EXCEPTIONAL ITEMS

a) The Company in its ordinary course of business has promoted / acquired interest in various entities. The Company''s exposure to these entities on account of Investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Trade Receivables is Rs. 384.92 (March 31, 2013: Rs. 313.87), Rs. 86.68 (March 31, 2013: Rs. 95.03) and Rs. 62.53 (March 31, 2013: Rs. 50.04) respectively. Most of the entities have accumulated losses and negative net worth. The Company''s exposure to such loss making entities on account of investments in equity shares and preference shares, on account of amounts advances as Loans & Advances and Trade Receivables is Rs. 196.00 (March 31, 2013: Rs. 107.88), Rs. 75.05 (March 31, 2013: Rs. 75.21) and Rs. 48.85 (March 31, 2013: Rs. 39.53) respectively. The Company has made provision on overall basis ofRs. 13.18 (March 31, 2013: Rs.4.49), Rs.63.51 (March 31, 2013: Rs. 63.51 ) and Rs. 12.09 (March 31, 2013: Rs. 10.18) against such Investments, Loans and Advances and Trade Receivables respectively.

Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide financial support to these entities. The provisions made during the year include the amounts advanced during the year.

b) Pursuant to the implementation of Digital Addressable System (DAS), the Company has incurred expenditure amounting to Rs. Nil (March 31, 2013: Rs. 5.00) towards promotional campaign relating to awareness of DAS for 100% digitalisation for all the four metros from November 01, 2012.

c) The Ministry of Corporate Affairs vide circular dated August 09, 2012 clarified that loss arising on foreign exchange fluctuation is not to be recognised as interest cost in terms of para 4(e) of Accounting Standard 16 on Borrowing Costs in the event a company has opted for an option granted under earlier circular relating to capitalisation / amortisation of foreign exchange losses. In view of the same, during the previous financial year ended March 31, 2013 the Company has reversed finance cost ofRs. Nil (March 31, 2013: Rs. 5.90) for the year ended March 31, 2012 and capitalised the same resulting in higher depreciation by Rs. Nil (March 31, 2013: Rs. 0.75) for the year ended March 31, 2012. The aforesaid change resulted in net gain ofRs. Nil (March 31, 2013: Rs. 5.15) and has been shown as "Exceptional Item" in the Statement of Profit & Loss.

1.06 OUTSTANDING LETTER OF CREDIT :

Outstanding Letters of Credit Rs. 19.35 (March 31, 2013: Rs. 180.21) secured against assets acquired under LC facility hypothecation of present and future current assets of the Company and extension of pari passu hypothecation of present and future movable fixed assets of the Company.

1.07 EMPLOYEE STOCK OPTION PLAN

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 ("The Plan"). The Plan provides for issue of options (underlying equity share of Rs. 10 each) to the persons specified in the scheme at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range ofRs. 110.20 to Rs. 157.30.

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

The value of the options granted is determined by the management based on the rates at which shares were allotted to the investors during the relevant year and the same has been considered as fair value of option.

1.08 EMPLOYEE BENEFITS

a) Defined Benefit Plans:

The present value of the defined benefit obligations and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table provides the disclosures in accordance with Revised AS 15.

b) Defined Contribution Plans:

"Contribution to provident and other funds" is recognised as an expense (Refer Note No. 3.05) of the Statement of Profit and Loss.

1.09 SEGMENTAL REPORTING

The Company is a Multi System Operator providing Cable Television Network Services, Internet Services and allied services which is considered as the only reportable segment. The Company''s operations are based in India.

1.10 RELATED PARTY DISCLOSURES Particulars of Related Parties

A. Names of related parties and related party relationship where control exist

i) Under Control of the Company :

1 Wholly Owned Subsidiaries:

Bee Network & Communication Pvt. Ltd. Binary Technology Transfers Pvt. Ltd. Hathway C-Net Pvt. Ltd. Hathway Enjoy Cable Network Pvt. Ltd. Hathway Gwalior Cable & Datacom Pvt. Ltd.

Hathway Internet Satellite Pvt. Ltd.

Hathway JMD Farukhabad Cable Network Pvt Ltd.

Hathway Media Vision Pvt. Ltd.

Hathway Space Vision Cabletel Pvt. Ltd.

Hathway United Cables Pvt. Ltd.

Hathway Universal Cabletel & Datacom Pvt Ltd.

Ideal Cables Pvt. Ltd.

ITV Interactive Media Pvt. Ltd.

Liberty Media Vision Pvt. Ltd. Vision India Networks Pvt. Ltd.

Win Cable and Datacom Pvt. Ltd.

Hathway Datacom Central Pvt. Ltd.

(formally known as Hathway Bhaskar Multinet Pvt. Ltd.)

2 Other - Subsidiaries / Body Corporate

Chennai Cable Vision Network Pvt. Ltd.

Channels India Network Pvt. Ltd

Elite Cable Network Pvt. Ltd.

Hathway Digital Saharanpur Cable & Datacom Pvt. Ltd.

Hathway ICE Television Pvt. Ltd.

Hathway Sonali Om Crystal Cable Pvt. Ltd.

Hathway MCN Pvt. Ltd.

Hathway Nashik Cable Network Pvt. Ltd.

Hathway Krishna Cables Pvt. Ltd.

Hathway Rajesh Multi channel Pvt. Ltd.

Hathway Software Developers Pvt. Ltd

UTN Cable Communications Pvt. Ltd.

GTPL Hathway Pvt. Ltd.

Hathway Latur MCN Cable & Datacom Pvt. Ltd.

Hathway Channel 5 Cable & Datacom Pvt. Ltd.

Hathway Mysore Cable Network Pvt. Ltd.

Hathway Prime Cable & Datacom Pvt Ltd

Hathway Mantra Cable & Datacom Pvt. Ltd.

Hathway Sai Star Cable & Datacom Pvt. Ltd.

Hathway New Concept Cable & Datacom Pvt. Ltd.

Hathway Palampur Cable Network Pvt. Ltd.

Hathway Cable MCN Nanded Pvt. Ltd.

Net 9 Online Hathway Pvt. Ltd.

Hathway Bhawani Cabletel and Datacom Ltd.

Hathway Dattatray Cable Network Pvt. Ltd.

Hathway Kokan Crystal Cable Network Pvt. Ltd.

Hathway Jhansi JMDSR Cable & Datacom Pvt. Ltd.

Hathway SS Cable & Datacom - LLP

3 Subsidiaries of the Subsidiaries

Hathway Bhaskar CCN Multinet Pvt. Ltd.

Hathway BhaskarCCN Entertainment (India) Pvt. Ltd.

Hathway Bhaskar CBN Multinet Pvt. Ltd.

Hathway BhaskarCCN Multi Entertainment Pvt. Ltd.

GTPL Solanki Cable Network Pvt. Ltd.

GTPL Surat Telelink Pvt. Ltd.

GTPL Zigma Vision Pvt. Ltd.

GTPL SK Network Pvt. Ltd.

GTPL Video Badshah Pvt. Ltd.

GTPL Kutch Network Pvt. Ltd.

GTPL Anjali Cable Network Pvt. Ltd

GTPL City Channel Pvt. Ltd.

GTPL SMC Network Pvt. Ltd.

GTPL Jai Mataji Pvt. Ltd

GTPL Space City Pvt. Ltd.

GTPL Link Network Pvt. Ltd.

GTPL VVC Network Pvt. Ltd.

GTPL Insight Channel Network Pvt. Ltd

GTPL Vidarbha Telelink Pvt. Ltd

GTPL Parshwa Cable Network Pvt. Ltd

GTPL Vision Services Pvt. Ltd.

GTPL Narmada Cyberzone Pvt. Ltd.

GTPL Blue Bell Network Pvt. Ltd.

GTPL Shiv Shakti Network Pvt. Ltd.

GTPL Dahod Television Network Pvt. Ltd.

GTPL Sorath Telelink Pvt. Ltd.

GTPL Jay Shantoshima Network Pvt. Ltd.

GTPL Kolkata Cable & Broadband Pariseva Ltd.

GTPL Shiv Network Pvt. Ltd.

Gujarat Telelink East Africa Ltd.

GTPL Ahmedabad Cable Network Pvt. Ltd.

GTPL V&S Cable Pvt. Ltd.

D.L GTPL Cabnet Pvt. Ltd.

GTPL Sharda Cale Network Pvt. Ltd.

GTPL Video Vision Pvt. Ltd.

Hathway Bhawani NDS Network Pvt. Ltd.

Hathway Bhawani Sai Network Pvt. Ltd.

Hathway Cabletech Services Pvt. Ltd. (w.e.f. July 09, 2013 up to November 30, 2014)

ii) Other Related parties :

1 Joint Ventures| Hathway Sukhamrit Cable & Datacom Pvt. Ltd.

2 Associate Company

Pan Cable Services Pvt. Ltd.

Hathway VCN Cabletel Pvt. Ltd.

3 Promotor - Directors

Akshay Raheja Viren Raheja

4 Entities owned by or under significant influence of individuals having significant influence on the Company Coronet Investment Pvt. Ltd. Manali Investment and Finance Pvt. Ltd. Sonata Information Technology Ltd. Peninsula Estates Pvt. Ltd.

5 Key Managerial Personnel and Relatives

Jagdish Kumar G Pillai - Managing Director (w.e.f. December 21, 2012)

K. Jayaraman - Managing Director (up to December 21, 2012)

G Satish Kumar (Relative of Key Managerial Personnel) in orores unless oinerwise siaieaj

B) Related Party Transactions

The transactions with related parties and the closing balances due to/from parties areas follows. The previous year figures are mentioned in brackets:

1.11 DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/capitalisation of exchange differences arising on long- term foreign currency monetary items.

In accordance with the amendment/earlier amendment to AS 11, the Company has capitalised exchange gain / (loss), arising on long-term foreign currency loan, amounting to Rs. (34.39) [March 31, 2013: Rs. (15.02)] to the cost of plant and equipment''s. The Company has also capitalised exchange gain / (loss), arising on long-term foreign forward contract, undertaken to partially hedge the foreign current loan, amounting to Rs. 2.53 (Previous Year Rs. (0.62) to the cost of plant and equipments. The Company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deferred in the "Foreign Currency Monetary Item Translation Difference Account" is Rs. NIL (March 31, 2013:Rs. NIL).

1.12 Rupees figures are mentioned in Crores unless otherwise stated.

1.13 The Initial Public Offer (IPO) proceeds have been utilised as per objects as stated in the prospectus dated February 17, 2010 and as subsequently modified and approved by the Shareholders by an Ordinary Resolution through Postal ballot as per the provision of Section 192Aofthe Companies Act, 1956.

1.14 The amount receivable from a foreign party towards rendering of certain services has been disclosed net off amount payable to said party for import of capital goods, though unadjusted in the books of account. Application for necessary statutory approval has been made and the same is awaited.

1.15 Previous year figures have been rearranged and regrouped wherever necessary.

Mar 31, 2013

Company overview

Hathway Cable and Datacom Limited (the Company) is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is Multi System Operator (MSO) engaged in distribution of television channels through analog and digital cable distribution network and internet services through cable. Its equity shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India.

1.01 CONTINGENT LIABILITIES

a) The Company has given a counter indemnity favouring the bankers to the extent of Rs. 92,015,477 (March 31, 2012: Rs. 48,707,075) for issue of Bank Guarantees on behalf of the Company to various authorities/parties.

b) The Company has given Corporate Guarantees of Rs. 744,500,000 (March 31, 2012: Rs. 634,500,000) to Banks & Rs. 328,000,000 (March 31, 2012: Rs. 328,000,000) to Others towards various credit facilities given by the Bank & Others to some of its subsidiary companies.

c) Other Claims against the Company not acknowledged as debts are as under:

d) The Company as well as few broadcasters have claims and counter claims against each other, which are yet to be finalised and settled. The contingent liability in respect of such claims wherever ascertained, have been considered under Claims against the company not acknowledged as debts. In addition, upto the previous year, pending finalisation of negotiations with one of the broadcasters, the Company has accounted pay channel cost net of discounts expected from such broadcaster

e) The relevant Authority under the Karnataka Sales Tax / VAT had initiated proceeding to reassess the Company''s liability for the financial years 2001-02 to 2008-09 on the argument that light energy created while using OFC network for the purposes of transmission is goods and hence liable to tax under relevant state legislation. On writ petition, the Karnataka High Court has held against the Company. On further appeal, the Honourable Supreme Court remanded the matter to the Tribunal. However, Sales Tax Tribunal did not entertain the appeal of the Company as no assessment was made.

The Assessing Officer, acting on Nil returns filed by the Company, has proposed to complete best judgment re-assessment to tax light energy as goods. This may result in approximate demand of Rs. 54,406,240 (March 31, 2012: Rs. 54,406,240). The Company has filed a detailed reply to the show cause notice issued by the assessing officer and the matter is pending.

However, the Company do not anticipate any liability in view of the recent Karnataka High Court decision in a petition filed by BSNL wherein it was held that Artificially Created Light energy is not goods.

f) Pursuant to various amendments under Karnataka Entertainment Tax Act, 1958 to levy entertainment tax on LCO''s and MSO''s, the Government of Karnataka has issued various notices for re-assessment for various periods. The Company had challenged the notices and validity of amendments before the Hon''ble High Court of Karnataka. During the year, the High Court of Karnataka has rejected the petition of the Company . Accordingly, entertainment tax pertaining to the financial years 2006-07 to 2012-13 amounting to Rs. 60,226,890 (March 31, 2012 : Rs. 50,616,720) has been recognised in the financials. Out of the same an amount of Rs. 48,278,280 (March 31, 2012 : Nil) which pertains to previous financial years is shown as an Exceptional Item & balance which pertains to the current financial year is shown as an expense in the Statement of Profit & Loss . The Company has deposited Rs. 8,848,390 (March 31, 2012 : Rs. Nil) against this demand and is in the process of filing writ appeal. Contingent liability includes Rs 25,777,152 (March 31, 2012 : Rs. Nil) being interest on the above. Upto the previous year the demand was classified under Contingent Liability.

g) The Company has filed a petition before the Honourable Court of Andhra Pradesh challenging the vires of the amendment to the Andhra Pradesh Entertainment Tax Act, 1939 which has resulted in the levying of the Entertainment Tax on MSOs of Rs. 34,577,710 (March 31, 2012 : 25,604,095). The petition has been admitted and the levy and the action pursuant thereto have been ordered to be stayed.

h) The Collector of Aurangabad had initiated proceeding for recovery of an amount of Rs.79,192,049 towards non payment of Entertainment Tax up to the period September 30, 2011. The Company has preferred an appeal before the Divisional Commissioner who has by his order dated January 16, 2012 partly allowed the appeal by setting aside the order of the Additional Collector. The matter has been remanded to the Additional Collector for a de novo enquiry. After further hearings, no notice has been issued by or received by the Company from the Collector.

The matters is pending and based on the outcome of the respective petitions, liability may extend to period beyond notice period. The contingent liability in respect of claims is considered as part of Claims against Company not acknowledged as debts.

i) During the year, the VAT department in Maharashtra has raised the demand for the Assessment year 2008-09 of Rs.92,99,998/- which includes Rs.946,104/- towards MVAT and Rs.8,353,894/- towards CST. The Company has filed appeal against the same and is pending.

j) Income Tax Matters

1.02 CAPITAL AND OTHER COMMITMENTS:

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs.2,788,888,666 (March 31, 2012: Rs.1,858,829,743).

The Company in its ordinary course of business has promoted / acquired interest in various entities. Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide operating and financial support to these entities.

1.03 MATTERS RELATING TO SUBSIDIARIES:

a) Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd.and Hathway Internet Satellite Pvt. Ltd. were majority partners in a partnership firm, namely, M/s. Hathway Space Vision (the firm). The aforesaid majority partners of the firm had initiated legal action against the minority partner viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues and had made monetary claims against the minority partner. The minority partner had also filed certain counter claims against the wholly owned subsidiaries . After a long drawn legal battle, the firm stands dissolved under the directions of the Bombay High Court and the Court Receiver has been appointed as the Receiver of the assets and business of the firm. The issues concerning accounts and dissolution including adjudicating upon the original claims and counter claims made before the earlier Arbitrator are referred to for fresh Arbitration. The matter is pending. There are no claims against the Company.

The Company has investments in said fully owned subsidiaries namely Hathway Internet Satelite Pvt. Ltd. & Binary Technology Transfers Pvt. Ltd. of Rs.100,000 (March 31, 2012 :Rs.100,000) and Rs.100,000 (March 31, 2012 :Rs.100,000) and Loans and advance of Rs.15,915,359 (March 31, 2012 :Rs.15,915,359) , Rs.15,909,137 (March 31, 2012 :Rs.15,909,137) respectively which has been fully provided for in the books.

b) The Company had filed petition to wind up Hathway Jai Mata Di Sherawali Cable & Datacom Private Limited (HJMD), a subsidiary company, on just and equitable ground. In view of the Management disputes with the other Shareholders, the Company has decided to take such an action. The Delhi High Court has since passed the necessary order to liquidate HJMD and the investment of Rs 80,00,000 (March 31, 2012 80,00,000) and Loans & Adances of Rs 5,421,482 (March 31, 2012 : Rs. 5,421,482) & receivables of Rs. 7,450,717 (March 31, 2012 : 7,450,717) which was fully provided in the previous year, has been written off from the books during the year.

1.04 The Trade Receivables includes amount due from disconnected / inactive customers and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions have been made. In the opinion of the Board, long-term Loans & Advances, Trade Receivables and Current Assets have a realizable value in the ordinary course of business not less than the amount at which they are stated in the Balance Sheet.

1.05 EXCEPTIONAL ITEMS

a) The Company in its ordinary course of business has promoted / acquired interest in various entities. The Company''s exposure to these entities on account of Investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Trade Receivables is Rs. 3,138,682,147 (March 31, 2012: Rs. 2,820,432,866), Rs. 950,289,935 (March 31, 2012: Rs. 954,182,741) and Rs. 500,388,698 (March 31, 2012: Rs. 455,415,525) respectively. Most of the entities have accumulated losses and negative net worth. The Company''s exposure to such loss making entities on account of investments in equity shares and preference shares, on account of amounts advances as Loans & Advances and Trade Receivables is Rs. 1,078,842,721 (March 31, 2012: Rs. 898,878,542), Rs. 752,052,714 (March 31, 2012: Rs. 707,281,325) and Rs. 395,343,295 (March 31, 2012: Rs. 283,971,361). The Company has made provision on overall basis of Rs. 44,912,654 (March 31, 2012: Rs. 44,912,654), Rs. 635,115,720 (March 31, 2012: Rs. 631,000,421 ) and Rs. 101,835,670 (March 31, 2012: Rs. 59,039,346) against such Investments, Loans and Advances and Trade Receivables respectively.

Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide financial support to these entities. The provisions made during the year include the amounts advanced during the year.

b) During the year 2010-11 the Company had, in respect of a joint venture viz. Hathway Channel 5 Cable & Datacom Private Limited, filed a complaint against the joint venture partner for committing various criminal offences such as misappropriation of funds, falsification of accounts, fraudulent destruction of security etc. and had made claim of Rs.74,321,905. The matter has since been settled out of court and both the parties have withdrawn their respective cases. The exposure of the Company is Rs. 100,939,497 (March 31, 2012: Rs.99,779,696). On settlement of disputes, the provision of Rs. 62,819,311 made during the year 2010-11 has been reversed in the pevious year.

c) During the year 2009-10, due to certain business exigencies in the state of Tamilnadu, local cable operators and subscribers had migrated to competing Multi System Operator (MSO) and other service providers. As a consequence, the Company relocated part of its assets to other States so as to maximize the economic returns to the Company and is in the process of recovering balance access devices and other assets. However, as a matter of abundant caution, additional provision has been made as an Exceptional Item for Rs. Nil (March 31, 2012: Rs.104,333,070). Also In addition to the above Rs.Nil (March 31, 2012: Rs.10,444,370) has been written back after netting of expense for loans and advances, deposits and other current assets against current liabilities and deposit received outstanding in the books in the state of Tamilnadu.

d) Pursuant to the implementation of Digital Addressable System (DAS), the Company has incurred expenditure amounting to Rs. 50,035,460 (March 31, 2012: Rs.4,040,839) towards promotional campaign relating to awareness of DAS for 100% digitalization for all the four metros from November 01, 2012.

e) The Ministry of Corporate Affairs vide circular dated August 09, 2012 clarified that loss arising on foreign exchange fluctuation is not to be recognised as interest cost in terms of para 4(e) of Accounting Standard 16 on Borrowing Costs in the event a company has opted for an option granted under earlier circular relating to capitalization / amortisation of foreign exchange losses. In view of the same, during the year the Company has reversed finance cost of Rs. 59,005,974 for the year ended March 31, 2012 and capitalised the same resulting in higher depreciation by Rs. 7,544,714 for the year ended March 31, 2012. The aforesaid change resulted in net gain of Rs. 51,461,260 and has been shown as "Exceptional Item" in the Statement of Profit & Loss.

1.06 OUTSTANDING LETTER OF CREDIT :

Outstanding Letters of Credit Rs. 1,802,117,557 (March 31, 2012: Rs. 459,212,667) secured against assets acquired under LC facility, hypothecation of present and future current assets of the Company and extension of pari passu hypothecation of present and future movable fixed assets of the Company.

1.07 EMPLOYEE STOCK OPTION PLAN

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 ("The Plan"). The Plan provides for issue of options (underlying equity share of Rs.10 each) to the persons specified in the scheme at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range of Rs.110.20 to Rs.157.30.

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

The value of the options granted is determined by the management based on the rates at which shares were allotted to the investors during the relevant year and the same has been considered as fair value of option.

1.8 SEGMENTAL REPORTING

The Company is a Multi System Operator providing Cable Television Network Services, Internet Services and allied services which is considered as the only reportable segment. The Company''s operations are based in India.

1.9 RELATED PARTY DISCLOSURES

Particulars of Related Parties

A. Names of related parties and related party relationship where control exist

i) Under Control of the Company

1 Wholly Owned Subsidiaries: Bee Network & Communication Pvt. Ltd.

Binary Technology Transfers Pvt. Ltd.

Hathway C-Net Pvt. Ltd.

Hathway Enjoy Cable Network Pvt. Ltd.

Hathway Gwalior Cable & Datacom Pvt. Ltd.

Hathway Internet Satellite Pvt. Ltd.

Hathway JMD Farukhabad Cable Network Pvt Ltd.

Hathway Media Vision Pvt. Ltd.

Hathway Space Vision Cabletel Pvt. Ltd.

Hathway United Cables Pvt. Ltd.

Hathway Universal Cabletel & Datacom Pvt Ltd.

Ideal Cables Pvt. Ltd.

ITV Interactive Media Pvt. Ltd.

Liberty Media Vision Pvt. Ltd.

Vision India Networks Pvt. Ltd.

Win Cable and Datacom Pvt. Ltd.

Hathway Bhaskar Multinet Pvt. Ltd.

2 Other - Subsidiaries: Chennai Cable Vision Network Pvt. Ltd.

Channels India Network Pvt. Ltd

Elite Cable Network Pvt. Ltd.

Hathway Digital Saharanpur Cable & Datacom Pvt. Ltd.

Hathway ICE Television Pvt. Ltd.

Hathway Sonali Om Crystal Cable Pvt. Ltd.

Hathway MCN Pvt. Ltd.

Hathway Nashik Cable Network Pvt. Ltd.

Hathway Krishna Cables Pvt. Ltd.

Hathway Rajesh Multi channel Pvt. Ltd.

Hathway Software Developers Pvt. Ltd

UTN Cable Communications Pvt. Ltd.

GTPL Hathway Pvt. Ltd (f.k.a. Gujarat Telelink Pvt. Ltd.)

Hathway Latur MCN Cable & Datacom Pvt. Ltd.

Hathway Channel 5 Cable & Datacom Pvt. Ltd.

Hathway Mysore Cable Network Pvt. Ltd.

Hathway Prime Cable & Datacom Pvt Ltd

Hathway Mantra Cable & Datacom Pvt. Ltd.

Hathway Jai Mata Di Sherawali Cable & Datacom Pvt Ltd.*

Hathway Sai Star Cable & Datacom Pvt. Ltd.

Hathway New Concept Cable & Datacom Pvt. Ltd.

Hathway Palampur Cable Network Pvt. Ltd.

Hathway Cable MCN Nanded Pvt. Ltd.

Net 9 Online Hathway Pvt. Ltd.

Hathway Bhawani Cabletel and Datacom Ltd.

Hathway Dattatray Cable Network Pvt. Ltd.

Hathway Bhaskar CCN Multinet Pvt. Ltd

Hathway Bhaskar CCN Entertainment (India) Pvt. Ltd.

Hathway Bhaskar CBN Multinet Pvt. Ltd.

Hathway Bhaskar CCN Mullti Entertainment Pvt. Ltd.

Hathway Kokan Crystal Cable Network Pvt. Ltd.

1.10 During the year under review, the Company has not capitalized any borrowing cost in the absence of acquisition of any qualifying assets.

1.11 JOINT VENTURES

The Company has the following Joint Venture arrangements in the capacity of a Venturer as on March 31, 2013 :

a. Hathway Sukhamrit Cable and Datacom Private Limited*

b. Hathway SS Cable & Datacom - LLP**

With respect to above, the country of incorporation, proportion of ownership control and the proportionate share of each of Assets, Liabilities, Income and Expenses as per the Financial Statement for the year ended on March 31, 2013 is listed below:

1.12 DEFERRAL/CAPITALIZATION OF EXCHANGE DIFFERENCES

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the amendment/earlier amendment to AS 11, the company has capitalized exchange gain / (loss), arising on long- term foreign currency loan, amounting to Rs. (15,01,91,250) [March 31, 2012: Rs.(4,89,30,843)] to the cost of plant and equipment''s. The company has also capitalized exchange gain / (loss), arising on long-term foreign forward contract, undertaken to partially hedge the foreign current loan, amounting to Rs. (62,48,353) (Previous Year Rs.46,18,573) to the cost of plant and equipments. The company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deferred in the "Foreign Currency Monetary Item Translation Difference Account" is Rs. NIL (March 31, 2011:Rs. NIL).

1.13 MANAGERIAL REMUNERATION

"In respect of erstwhile Managing Director & CEO, the Company had made an application to the Central Government seeking approval for payment of remuneration for a period of three years beginning from August 8, 2010 in excess of limits prescribed under section 198 and 309 read with Schedule XIII to the Companies Act, 1956. The additional information called for by the Central Government have been furnished. While responding to the above application, the Central Government has directed the Company to either recover or apply for waiver of the remuneration paid in excess of remuneration prescribed under the said schedule during the period August 26, 2009 (the date on which the status of the Company change to public limited company) to August 7, 2010. The Company had paid remuneration at minimum scale prescribed under Schedule XIII to the Act during the period February 7, 2010 to August 7, 2010 and hence there is no question of having paid excess remuneration. The remuneration for the period prior to that was finalized when the Company was a private company and accordingly, as legally advised; the Company was not required to apply the Government for the approval.However, as required by the Central Government, the Company has applied for the waiver of remuneration as well as sitting fees for the period August 26, 2009 to February 7, 2010.

He continued as MD & CEO till December 21, 2012 and subsequently, was appointed as Vice-Chairman & Director of the Company. His resignation from the post of Vice Chairman and Director has been accepted with effect from February 28, 2013 and May 29, 2013 respectively. Expenses have been recognized based on salary package approved by the shareholders, however, approval of the Central Government is awaited.

1.14 The Initial Public Offer (IPO) proceeds have been utilized as per objects as stated in the prospectus dated February 17, 2010 and as subsequently modified and approved by the Shareholders by an Ordinary Resolution through Postal ballot as per the provision of Section 192A of the Companies Act, 1956.

1.15 With effect from November 01, 2012 vide notification no S.O.1408(E) dated June 21, 2012, DAS was introduced in the four metropolitan cities of the country. Under DAS scenario, the Company as well as other Multi System Operators are in the process of finalizing the fresh terms of revenue sharing arrangement with the Local Cable Operators through whom cable television services are rendered to ultimate subscribers. Pending finalization of legally enforceable contracts / arrangements, the Company has estimated activation fees and subscription and has raised invoices. Such estimation is based on ongoing discussions with LCOs, market trend and also considering the collections made till date. Since such estimation are on conservative basis, the management has reasonable certainty of collecting the amount billed to the LCOs. The management has reviewed the status on constant basis and wherever felt necessary, has issued credit notes to reverse the revenue.

1.16 Previous year figures have been rearranged and regrouped wherever necessary.

Mar 31, 2012

Company overview

Hathway Cable and Datacom Limited (the Company) is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is Multi System Operator (MSO) and engaged in distribution of television channels through analog and digital cable distribution network and internet services through cable. Its equity shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India.

1.01 CONTINGENT LIABILITIES

a) The Company has given a counter indemnity favouring the bankers to the extent of Rs.48,707,075 (March 31, 2011: Rs.60,988,500) for issue of Bank Guarantees in favour of the Company.

b) The Company has given Corporate Guarantees of Rs.634,500,000 (March 31, 2011: Rs.414,345,000) to Banks & Rs. 328,000,000 (March 31, 2011: Rs.328,000,000) to Others towards various credit facilities given by the Bank & Others to its subsidiary companies.

d) Pending finalization of negotiations with one of the broadcasters, the Company has accounted pay channel cost net of discounts expected from such broadcaster. The Company as well as few broadcasters have claims and counter claims against each other, which are yet to be finalized and settled. The contingent liability in respect of such claims wherever ascertained, have been considered under Claims against the Company not acknowledged as debts.

e) The relevant Authority under the Karnataka Sales Tax / VAT had initiated proceeding to reassess the Company's liability for the financial years 2001-02 to 2008-09 on the argument that light energy created while using OFC network for the purposes of transmission is goods and hence liable to tax under relevant state legislation.

On writ petition, the Karnataka High Court has held against the Company. On further appeal, the Honourable Supreme Court remanded the matter to the Tribunal. However, Sales Tax Tribunal did not entertain the appeal of the Company as no assessment was made.

The Assessing Officer, acting on Nil returns fled by the Company, has proposed to complete best judgment re-assessment to tax light energy as goods. This may result in approximate demand of Rs. 54,406,240 (March 31, 2011: Rs. 54,406,240). The Company has fled a detailed reply to the show cause notice issued by the assessing officer and the matter is pending.

f) Pursuant to various amendments under Karnataka Entertainment Tax Act, 1958 to levy entertainment tax on LCO's and MSO's, the Government of Karnataka has issued various notices for re-assessment for various periods. The Company has challenged the notices and validity of amendments with the Hon'ble High Court of Karnataka. The Hon'ble High Court of Karnataka has issued stay order against such notices on payment of Rs. 6,431,950 being 50% of the Basic Entertainment Tax liability.

The Company has filed a petition before the Honourable Court of Andhra Pradesh challenging the vires of the amendment to the Andhra Pradesh Entertainment Tax Act, 1939 which has resulted in the levying of the Entertainment Tax on MSOs. The petition has been admitted and the levy and the action pursuant thereto have been ordered to be stayed.

g) The Collector of Aurangabad had initiated proceeding for recovery of an amount of Rs.79,192,049 towards non payment of Entertainment Tax up to the period September 30, 2011. The Company has preferred an appeal before the Divisional Commissioner who has by his order dated January 16, 2012 partly allowed the appeal by setting aside the order of the Additional Collector. The matter has been remanded to the Additional Collector for a de novo enquiry.

The matters stated against (g) above, are pending and based on the outcome of the respective petitions, liability may extend to period beyond notice period. The contingent liability in respect of claims is considered as part of Claims against Company not acknowledged as debts.

1.02 CAPITAL AND OTHER COMMITMENTS:

Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs.1,858,829,743 (March 31, 2011: Rs.698,716,613).

The Company in its ordinary course of business has promoted / acquired interest in various entities. Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide operating and financial support to these entities.

1.03 MATTERS RELATING TO SUBSIDIARIES:

a) Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd. or Hathway Internet Satellite Pvt. Ltd. are majority partners in a partnership firm namely M/s. Hathway Space Vision (the frm). The aforesaid majority partners of the frm had initiated legal action against the minority partners viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues. The minority partners had also fled certain claims against the Company and majority partners. After a long drawn legal battle, the firm stands dissolved under the directions of the Bombay High Court. The Court Receiver, High Court of Bombay has been appointed as the Receiver of the assets and business of the firm and the Company has been appointed as the Agent of the court receiver. The issues concerning accounts and dissolution including adjudicating upon the original claims and counter claims made before the earlier Arbitrator are referred to Arbitration by Justice Srikrishna. The court receiver has taken formal possession of the movable assets of the firm and has appointed a valuer, the report thereof is pending.

The Company, based on legal advice has not made any provision towards claims raised by the minority partner of the firm and such claims are frivolous in nature and are considered as claims against the Company not acknowledged as debt and included in Note No.4.01 (c).

b) The Company has fled petition to wind up Hathway Jai Mata Di Sherawali Cable & Datacom Private Limited (HJMD), a subsidiary company, on just and equitable ground. The Company has investment of Rs.8,000,000 and receivable of Rs. 7,450,717 from HJMD and the same have been fully provided for. In view of the Management disputes with the Other Shareholders, the Company has decided to take such an action. The Delhi High Court by its order dated May 5, 2010 directed that it is just and equitable that HJMD be wound up. The Official Liquidator, as appointed and directed by the Delhi High Court, has taken charge of HJMD and the process of liquidation is under progress.

1.04 The Trade Receivables includes amount due from disconnected / inactive customers and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions have been made. In the opinion of the Board, long-term Loans & Advances, Trade Receivables and Current Assets have a realizable value in the ordinary course of business not less than the amount at which they are stated in the Balance Sheet.

1.05 EXCEPTIONAL ITEMS

a) The Company in its ordinary course of business has promoted / acquired interest in various entities. The Company's exposure to these entities on account of Investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Trade Receivables is Rs. 2,820,432,866 (March 31, 2011: Rs. 2,686,763,281), Rs. 954,182,741 (March 31, 2011: Rs. 1,020,556,884) and Rs. 455,415,525 (March 31, 2011: Rs. 490,526,323) respectively. Most of the entities have accumulated losses and negative net worth. The Company's exposure to such loss making entities on account of investments in equity shares and preference shares, on account of amounts advances as Loans & Advances and Trade Receivables is Rs.898,878,542 (March 31, 2011: Rs. 475,529,504), Rs. 707,281,325 (March 31, 2011: Rs. 726,181,972) and Rs. 283,971,361 (March 31, 2011: Rs. 258,683,331). The Company has made provision on overall basis of Rs. 44,912,654 (March 31, 2011: Rs. 107,631,965), Rs. 631,000,421 (March 31, 2011: Rs. 619,727,136) and Rs.59,039,346 (March 31, 2011: Rs. 62,865,799) against such Investments, Loans and Advances and Trade Receivables respectively.

Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide financial support to these entities. The provisions made during the year include the amounts advanced during the year.

b) During the previous year the Company had, in respect of a joint venture viz. Hathway Channel 5 Cable & Datacom Private Limited, fled a complaint against the joint venture partner for committing various criminal offences such as misappropriation of funds, falsification of accounts, fraudulent destruction of security etc. and had made claim of Rs.74,321,905. The matter has since been settled out of court and both the parties have withdrawn their respective cases. The exposure of the Company is Rs. 99,779,696 (March 31, 2011: Rs.104,934,075) against which a provision of Rs. Nil (March 31, 2011: Rs.62,819,311) has been made. On settlement of disputes, the provision made during the previous year has been reversed.

c) During the year 2009-10, due to certain business exigencies in the state of Tamilnadu, local cable operators and subscribers had migrated to competing Multi System Operator (MSO) and other service providers. As a consequence, the Company relocated part of its assets to other States so as to maximize the economic returns to the Company and is in the process of recovering balance access devices and other assets. However, as a matter of abundant caution, additional provision has been made as an Exceptional Item for Rs. 104,333,070 (March 31, 2011: Rs.56,593,892). The balance WDV of the Distribution Equipments, Access Devices and Other Assets located in the State of Tamil Nadu as on 31st March 2012 is Rs.Nil (March 31, 2011: Rs.6,552,000), Rs. Nil (March 31, 2011: Rs. 112,653,753) and Rs, Nil (March 31, 2011: Rs.1,086,104) respectively.

Also In addition to the above Rs.10,444,370 (March 31, 2011: Rs.Nil) has been written back after netting of expense for loans and advances, deposits and other current assets against current liabilities and deposit received outstanding in the books in the state of Tamilnadu.

d) Pursuant to the proposed implementation of Digital Addressable System (DAS), the Company has incurred expenditure amounting to Rs.4,040,839 (March 31, 2011: Rs.Nil) towards promotional campaign relating to awareness of DAS for 100% digitalization for all the four metros from November 01, 2012.

1.06 OUTSTANDING LETTER OF CREDIT :

Outstanding Letters of Credit Rs.459,212,667 (March 31, 2011: Rs.203,898,846) secured against assets acquired under LC facility, hypothecation of present and future current assets of the Company and extension of pari passu hypothecation of present and future movable fixed assets of the Company.

1.07 EMPLOYEE STOCK OPTION PLAN

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 ("The Plan"). The Plan provides for issue of options (underlying equity share of Rs.10 each) to the persons specified in the scheme at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range of Rs.110.20 to Rs.157.30.

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

The value of the options granted is determined by the management based on the rates at which shares were allotted to the investors during the relevant year and the same has been considered as fair value of option.

1.08 EMPLOYEE BENEFITS

a) Defined Benefit Plans:

The present value of the Defined benefit obligations and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

b) Defined Contribution Plans:

"Contribution to provident and other funds" is recognized as an expense in Schedule L of the Statement of Profit and Loss

1.09 SEGMENTAL REPORTING

The Company is a Multi System Operator providing Cable Television Network Services, Internet Services and allied services which is considered as the only reportable segment. The Company's operations are based in India.

1.10 RELATED PARTY DISCLOSURES Particulars of Related Parties

Names of related parties and related party relationship where control exist A. Under Control of the Company

1 Wholly Owned Subsidiaries:

Bee Network & Communication Pvt. Ltd.

Binary Technology Transfers Pvt. Ltd.

Hathway C-Net Pvt. Ltd.

Hathway Enjoy Cable Network Pvt. Ltd.

Hathway Gwalior Cable & Datacom Pvt. Ltd.

Hathway Internet Satellite Pvt. Ltd.

Hathway JMD Farukhabad Cable Network Pvt Ltd.

Hathway Media Vision Pvt. Ltd.

Hathway Space Vision Cabletel Pvt. Ltd.

Hathway United Cables Pvt. Ltd.

Hathway Universal Cabletel & Datacom Pvt Ltd.

Ideal Cables Pvt. Ltd.

ITV Interactive Media Pvt. Ltd.

Liberty Media Vision Pvt. Ltd.

Vision India Networks Pvt. Ltd.

Win Cable and Datacom Pvt. Ltd.

2 Other Ã Subsidiaries

Chennai Cable Vision Network Pvt. Ltd.

Channels India Network Pvt. Ltd

Elite Cable Network Pvt. Ltd.

Hathway Digital Saharanpur Cable & Datacom Pvt. Ltd.

Hathway ICE Television Pvt. Ltd.

Hathway Sonali Om Crystal Cable Pvt. Ltd.

Hathway MCN Pvt. Ltd.

Hathway Nashik Cable Network Pvt. Ltd.

Hathway Krishna Cables Pvt. Ltd.

Hathway Rajesh Multi channel Pvt. Ltd.

Hathway Software Developers Pvt. Ltd

UTN Cable Communications Pvt. Ltd.

Gujarat Telelink Pvt. Ltd.

Hathway Bhaskar Multinet Pvt. Ltd.

Hathway Latur MCN Cable & Datacom Pvt. Ltd.

Hathway Channel 5 Cable & Datacom Pvt. Ltd.

Hathway Mysore Cable Network Pvt. Ltd.

Hathway Prime Cable & Datacom Pvt Ltd

Hathway Mantra Cable & Datacom Pvt. Ltd.

Hathway Jai Mata Di Sherawali Cable & Datacom Pvt Ltd.

Hathway Sai Star Cable & Datacom Pvt. Ltd.

Hathway New Concept Cable & Datacom Pvt. Ltd.

Hathway Palampur Cable Network Pvt. Ltd.

Hathway Cable MCN Nanded Pvt. Ltd.

Net 9 Online Hathway Pvt. Ltd.

Hathway Bhawani Cabletel and Datacom Ltd.* Hathway Dattatray Cable Network Pvt. Ltd. Hathway Bhaskar CCN Multinet Pvt. Ltd CCN Entertainment India Pvt. Ltd. Chhattisgarh Broadband Network Pvt Ltd. Hathway Kokan Crystal Cable Network Pvt. Ltd.

B. Related party with whom transaction has taken place :

1 Joint Ventures Hathway Sukhamrit Cable & Datacom Pvt. Ltd.

2 Associate Company Pan Cable Services Pvt. Ltd.

Hathway VCN Cabletel Pvt. Ltd.

3 Others Hathway Space Vision

Hathway Cable Entertainment Pvt. Ltd.

Hathway Jhansi JMDSR Cable & Datacom Pvt. Ltd.

4 Key Managerial Personnel K Jayaraman-Managing Director (Refer Note No: 4.20)

The transactions with related parties and the closing balances due to/from parties are as follows. The previous year figures are mentioned in brackets:

In Addition to aforementioned transactions, the Company has given Corporate Guarantees of Rs.853,000,000 (March 31, 2011: Rs.719,250,000) on behalf of Gujarat Telelink Private Limited, Rs.100,000,000 (March 31, 2011: Rs.Nil) on behalf of Hathway Bhaskar Multinet Pvt. Ltd., Rs. 9,500,000 (March 31, 2011: Rs.22,895,000) on behalf of Hathway MCN Private Limited and given counter indemnity favouring the Bankers towards Bank Guarantees issued on behalf of Hathway MCN Private Limited and Hathway Media Vision Private Limited of Rs. Nil (March 31, 2011: Rs. 2,500,000) and Rs.Nil (March 31, 2011: Rs. 200,000) respectively included in. Also for Letter of Credit facility availed by Gujarat Telelink Private Limited.

Details of debits / credits which are purely in the nature of reimbursements are not included in above.

1.11 JOINT VENTURES

The Company has the following Joint Venture arrangements in the capacity of a Venturer in the following as on 31 March 2012 :

a. Hathway Sukhamrit Cable and Datacom Private Limited*

b. Hathway Jai Mata Di Balaji Cable Network

c. Mantra Enterprises

d. Mona Cable

1.12 DEFERRAL/CAPITALIZATION OF EXCHANGE DIFFERENCES

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the amendment/earlier amendment to AS 11, the company has capitalized exchange loss, arising on long-term foreign currency loan, amounting to Rs.48,930,843 (March 31, 2011: Rs.886,565) to the cost of plant and equipment's. The company has also capitalized exchange gain, arising on long-term foreign forward contract, undertaken to partially hedge the foreign current loan, amounting to Rs.4,618,573 rupees (March 31, 2011: Rs.176,958 rupees) to the cost of plant and equipments. The company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deferred in the "Foreign Currency Monetary Item Translation Difference Account" is Rs.NIL (March 31, 2011: Rs.NIL).

1.13 MANAGERIAL REMUNERATION

The Company had made an application to the Central Government for approval for payment of remuneration to the Managing Director & CEO from August 7, 2010 for a period of three years in excess of limits prescribed under section 198 and 309 read with Schedule XIII to the Companies Act, 1956. In response to the application, the Central Government has called for certain additional information and the same are being furnished.

However, while responding to the above application, the Central Government has directed the Company to either recover or apply for waiver of the remuneration paid in excess of remuneration prescribed under the said schedule during the period August 26, 2009 (the date on which the status of the Company change to public limited company) to August 7, 2010. Since the remuneration paid during the period February 7, 2010 to August 7, 2010 was at minimum scale prescribed under Schedule XIII to the Act, there is no question of having paid excess remuneration. The remuneration for the period prior to that was finalized when the Company was a private company and accordingly, as legally advised; the Company was not required to apply the Government for the approval. However, as required by the Central Government, the Company is in the process of applying for the waiver of remuneration and sitting fees for the period August 26, 2009 to February 7, 2010.

1.14 During the year under review, the Company has not capitalized any borrowing cost in the absence of any qualifying assets.

1.15 The Initial Public Offer (IPO) proceeds have been utilized as per objects as stated in the prospectus dated February 17, 2010 and as subsequently modified and approved by the Shareholders by an Ordinary Resolution through Postal ballot as per the provision of Section 192A of the Companies Act, 1956

1.16 Till the year ended March 31, 2011, pre-revised Schedule VI to the Companies Act 1956 was being used for preparation and presentation of financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. Accordingly, the company has reclassified previous year figures to confirm to this year's classification. On adoption of the revised Schedule VI, there has been no significant impact on recognition and measurement principles followed for preparation of financial statements.

Mar 31, 2011

BACKGROUND

The Company is Multi System Operator (MSO) and engaged in distribution of television channels through analog and digital cable distribution network and internet services through cable.

1. The Equity Shares of the Company were consolidated into shares with a face value of Rs. 10 each from Re. 1 each pursuant to resolution dated 26th August, 2009.

2. CONTINGENT LIABILITIES

a) The Company has given a counter indemnity favouring the bankers to the extent of Rs.60,988,500 (Previous Year Rs. 59,788,500) for issue of Bank Guarantees.

b) The Company has given Corporate Guarantee of Rs.742,345,000 (Previous Year - Rs. 438,250,000) to a Bank towards various credit facilities given by the Bank to its Subsidiary Companies.

c) Outstanding Letters of Credit Rs.227,846,361 (Previous Year Rs. 182,484,780) secured against assets acquired under LC facility, hypothecation of present and future current assets of the Company and extension of pari passu hypothecation of present and future movable fixed assets of the Company. This includes Rs. NIL (P. Y. Rs. 39,237,000) utilised for one of the subsidiary, Gujarat Telelink Private Limited.

d) Pending finalization of negotiations with one of the broadcasters, the Company has accounted pay channel cost net of discounts expected from such broadcaster. The Company as well as few broadcasters have claims and counter claims against each other, which are yet to be finalized and settled. The contingent liability in respect of such claims wherever ascertained, have been considered under Claims against the Company not acknowledged as debts.

e) The relevant Authority under the Karnataka Sales Tax / VAT had initiated proceeding to reassess the Company's liability for the financial years 2001-02 to 2008-09 on the argument that light energy created while using OFC network for the purposes of transmission is goods and hence liable to tax under relevant state legislation.

On writ petition, the Karnataka High Court has held against the Company. On further appeal, the Honourable Supreme Court remanded the matter to the Tribunal. However, Sales Tax Tribunal did not entertain the appeal of the Company as no assessment was made.

The Assessing Officer, acting on Nil returns filed by the Company, has proposed to complete best judgement re-assessment to tax light energy as goods. This may result in approximate demand of Rs. 54,406,240 (Previous Year Rs. 54,406,240). The Company has filed a detailed reply to the show cause notice issued by the assessing officer and the matter is pending.

f) Pursuant to various amendments under Karnataka Entertainment Tax Act, 1958 to levy entertainment tax on LCOsand MSOs. the Government of Karnataka has issued various notices for re-assessment for various periods. The Company has challenged the notices and validity of amendments with the Hon'ble High Court of Karnataka. The Hon'ble High Court of Karnataka has issued stay order against such notices on payment of Rs. 6,431,950 being 50% of the Basic Entertainment Tax liability.

The Company has filed a petition before the Honourable Court of Andhra Pradesh challenging the virus of the amendment to the Andhra Pradesh Entertainment Tax Act, 1939 which has resulted in the levying of the Entertainment Tax on MSOs. The petition has been admitted and the levy and the action pursuant thereto have been ordered to be stayed.

3) Matters relating to Subsidiaries:

a) Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd. or Hathway Internet Satellite Pvt. Ltd. are majority partners in a partnership firm namely M/s. Hathway Space Vision. The aforesaid majority partners of the firm had initiated legal action against the minority partners viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues. The majority partners and the Company had lodged certain claims against the minority partners. Pursuant to Order passed by High Court dated 22nd March 2005, the matter was referred for the arbitration before Justice S. P. Bharucha (Retd.) An award has been passed by Justice S. P. Bharucha (Retd.), on 14th September, 2009 dismissing all claims as well as counter claims. Pursuant to dismissal of claims under arbitration, on 7th October,2009 the majority partners have filed a petition before Bombay High Court under section 9 of Arbitration and Conciliation Act seeking extension of restraining Interim Orders dated 12th May, 2004 and 22nd March, 2005 passed by the Hon'ble High Court against the minority partners. The Hon'ble High Court has been pleased to extend the said restraining Interim Order. On 5th November 2009 the majority partners have filed an Appeal before the Bombay High Court under section 34 of Arbitration and Conciliation Act, challenging the award dated 14th September 2009. The same is pending for hearing. Pending the Arbitration, on 2nd March 2009, the majority partners have also filed a Petition before the Bombay High Court seeking the interim relief for appointment of court receiver in order to carry out the activity of collection of subscription from the customers / operators. The same is also pending for hearing.

The Company based on legal advice has not made any provision towards claims raised by the minority partner of the firm and are considered as claims against the Company not acknowledged as debt. Hence, this joint venture has been excluded from consolidation as it operates under severe long term restrictions which significantly impair its ability to transfer funds to the Company.

b) The Company has filed petition to wind up Hathway Jai Mata Di Sherawali Cable & Datacom Private Limited (HJMD), a Subsidiary Company, on just and equitable ground. The Company has investment of Rs. 8,000,000 and Receivable of Rs. 7,450,717 from HJMD and the same have been fully provided for. In view of the Management disputes with the Other Shareholders, the Company has decided to take such an action. The Delhi High Court by its order dated May 5, 2010 records of HJMD has submitted the petition and has opined that it is just and equitable that the Company be wound up. The Official Liquidator of the Delhi high Court has been appointed as the provisional liquidator of the Company and has been directed to take overall the assets and books of accounts and records of the Company.

c) During the year Company has, in respect of Hathway Channel 5 Cable & Datacom Private Limited, a 51:49 joint venture in Delhi, filed a complaint against joint venture partner for committing various criminal offences such as misappropriation of funds. falsification of accounts, fraudulent destruction of security etc. and has made claim of Rs. 74,321,905. The matter is pending. The exposure of the Company is Rs. 104,934,075 against which a provision of Rs. 62,819,311 is made.

4) Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs.760,785,549 (Previous year Rs. 102,526,288).

5) The Company has initiated circulation of letters to it suppliers requesting them to confirm whether they are covered under the Micro. Small and Medium Enterprises Development Act, 2006 ('MSMED'). Few of the enterprises have responded till date regarding their status under the said Act and the balance confirmations are still awaited.. However, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material. The disclosure have been made in the accounts to the extent confirmations have been received.This has been relied upon by the Auditors.

6) The debtors includes amount due from disconnected / inactive customers and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions have been made. In the opinion of the Board, the Debtors and Loans & Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the Balance Sheet.

7) The Company in its ordinary course of business has promoted / acquired interest in various entities. The Company's exposure to these entities on account of Investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Sundry Debtors is Rs. 2,686,763,281 (Previous Year Rs. 2,563,514,478), Rs. 1,020,556,884 (Previous Year Rs. 900,270,376) and Rs. 490,526,323 (Previous Year Rs. 340,118,350) respectively. Most of the entities have accumulated losses and negative net worth. The Company's exposure to such loss making entities on account of investments in equity shares and preference shares, on account of amounts advances as Loans & Advances and Sundry Debtors is Rs.475,529,504 (Previous Year Rs. 478,001,508), Rs.726,181,972 (Previous Year Rs. 691,418,055) and Rs.258,683,331 (Previous Year Rs. 241,157,947). The Company has made provision on overall basis of Rs. 107,631,965 (Previous Year Rs. 55,124,780), Rs.619,727,136 (Previous Year Rs. 607,629,002) and Rs.62,865,799 (Previous Year Rs. 70,207,286) against such Investments, Loans and Advances and Sundry Debtors respectively.

Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company. the Company has committed to provide financial support to these entities. The provisions made during the year include the amounts advanced during the year.

The provision made in respect of above during the year, is considered under Exceptional Item in the Profit and Loss Account.

8) During the year 2009-10, due to certain business exigencies in the state of Tamil Nadu, local cable operators and subscribers had migrated to competing Multi System Operator (MSO) and other service providers. As a consequence, the Company relocated part of its assets to other States so as to maximize the economic returns to the Company. Based on initial estimate in FY 2009-10provision for loss of Distribution Equipments (excluding Access Devices) and other assets aggregating to Rs. 116,073,964 was made in the books as an Exceptional Item. In addition, the Company had also made a provision of Rs. 40,307,799 for the outstanding debtors. The Company has been consistently in the process of recovering Access Devices and other assets. During the year 2010-11, the process of recovering Access devices has yielded results and the Company expects to continue this process of retrieval in the next financial year as well. However, as a matter of abundant caution, an additional provision to the extent of Rs.56,593,892 has been made as an Exceptional Item. The balance WDV of the Distribution Equipments, Access Devices and Other Assets located in the State of Tamil Nadu as on 31st March, 2011 is Rs. 6,552,000, Rs. 112,653,753 and Rs. 1.086.104 respectively. In view of the management, the provision made till date towards impairment and loss of assets is adequate and the value of the balance assets would be at least equivalent to written down value and hence no provision is considered necessary.

9) During the previous year, based on the past performance of Set Top Boxes deployed by the Company, and further based on the technical certification, the Company had decided to change it's policy and recompute the depreciation with retrospective effect on a straight line basis over a period of eight years. The reversal of depreciation for earlier years amounting to Rs 64,398,315 was credited to Profit and Loss account and shown under Exceptional Item.

10) Loans and Advances include Rs.2,767,912 (Previous Year Rs. 2,767,912) due from Managing Director [Maximum amount outstanding during the year Rs. 2,767,912 (Previous Year Rs. 2,767,912)]

11) EMPLOYEE STOCK OPTION PLAN

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 ("The Plan"). The Plan provides for issue of options (underlying equity share of Re. 10 each) to the persons specified in the scheme at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range of Rs. 110.20 to Rs. 157.30.

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

The value of the options granted is determined by the management based on the rates at which shares were allotted to the investors during the relevant year and the same has been considered as fair value of option.

12) EMPLOYEE BENEFITS

a) Defined Benefit Plans:

The present value of the defined benefit obligations and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

The following table provides the disclosures in accordance with Revised AS 15.

b) Defined Contribution Plans:

"Contribution to provident and other funds" is recognised as an expense in Schedule L of the Profit and Loss Account

13) SEGMENTAL REPORTING

The Company is a Multi System Operator providing Cable Television Network Services, Internet Services and allied services which is considered as the only reportable segment. The Company's operations are based in India.

Particulars of Related Parties A Controlled by:

(Upto 19h February 2010)

Mr. Rajan Raheja

Mr. Akshay Raheja

Mr. Viren Raheja

Hathway Investments Pvt. Ltd.

Spur Cable & Datacom Pvt. Ltd.

Asian Cable Systems Pvt. Ltd.

B Under Control of the Company

1 Wholly Owned Subsidiaries:

Bee Network & Communication Pvt. Ltd.

Binary Technology Transfers Pvt. Ltd.

Hathway C-Net Pvt. Ltd.

Hathway Enjoy Cable Network Pvt. Ltd.

Hathway Gwalior Cable & Datacom Pvt. Ltd.

Hathway Internet Satellite Pvt. Ltd.

Hathway JMD Farukhabad Cable Network Pvt. Ltd.

Hathway Media Vision Pvt. Ltd.

Hathway Space Vision Cabletel Pvt. Ltd.

Hathway United Cables Pvt. Ltd.

Hathway Universal Cabletel & Datacom Pvt Ltd.

Ideal Cables Pvt. Ltd.

ITV Interactive Media Pvt. Ltd.

Liberty Media Vision Pvt. Ltd.

Vision India Networks Pvt. Ltd.

Win Cable and Datacom Pvt. Ltd.

2 Other-Subsidiaries

Chennai Cable Vision Network Pvt. Ltd.

Channels India Network Pvt. Ltd

Elite Cable Network Pvt. Ltd.

Hathway Digital Saharanpur Cable & Datacom Pvt. Ltd.

Hathway ICE Television Pvt. Ltd.

Hathway Sonali Om Crystal Cable Pvt. Ltd.

Hathway MCN Pvt. Ltd.

Hathway Nashik Cable Network Pvt. Ltd.

Hathway Krishna Cables Pvt. Ltd.

Hathway Rajesh Multi channel Pvt. Ltd.

Hathway Software Developers Pvt. Ltd

UTN Cable Communications Pvt. Ltd.

Gujarat Telelink Pvt. Ltd.

Hathway Bhaskar Multinet Pvt. Ltd.

Hathway Latur MCN Cable & Datacom Pvt. Ltd.

Hathway Channel 5 Cable & Datacom Pvt. Ltd.

Hathway Mysore Cable Network Pvt. Ltd.

Hathway Prime Cable & Datacom Pvt Ltd

Hathway Mantra Cable & Datacom Pvt. Ltd.

Hathway Jai Mata Di Sherawali Cable & Datacom Pvt Ltd.

Hathway Sai Star Cable & Datacom Pvt. Ltd.

Hathway New Concept Cable & Datacom Pvt. Ltd.

Hathway Palampur Cable Network Pvt. Ltd.

Hathway Cable MCN Nanded Pvt. Ltd.

Net 9 Online Hathway Pvt. Ltd.

Hathway Bhawani Cabletel and Datacom Ltd.*

Hathway Dattatray Cable Network Pvt. Ltd.

Hathway Bhaskar Pagariya Multinet Pvt. Ltd

CCN Entertainment India Pvt. Ltd.

Chhattisgarh Broadband Network Pvt Ltd.

Kokan Crystal Cable Network Pvt. Ltd.

C Others

Associate Company and Joint Ventures:

Pan Cable Services Pvt. Ltd.

Hathway VCN Cabletel Pvt. Ltd.

Hathway Sukhamrit Cable & Datacom Pvt. Ltd.**

Hathway Space Vision

Hathway Jhansi JMDSR Cable & Datacom Pvt. Ltd.

Hathway Jai Mata Di Balaji Cable Network (since dissolved)

Mantra Cable (since dissolved)

1 Mona Cable Network (since dissolved)

2 Companies/Firms under the

Significant Influence of Persons having control over the Company (upto 19th February 2010)

Globus Stores Pvt. Ltd.

R & S Business Centre

Outlook Publishing (India) Pvt. Ltd.

3 Key Managerial Personnel K Jayaraman-Managing Director

* Hathway Bhawani Cabletel and Datacom Ltd was a joint venture upto 31st August 2009.

**Hathway Sukhamrit Cable & Datacom Pvt. Ltd. was a subsidiary upto 1st September 2009

The transactions with related parties and the closing balances due to/from parties are as follows. The previous year figures are mentioned in brackets:

In Addition to aforementioned transactions {Refer notes to accounts above B (4) (b)}, the Company has given Corporate Guarantees of Rs.719,250,000 (Rs.428,750,000) on behalf of Gujarat Telelink Private Limited, Rs. 22,895,000 (Rs.9,500,000) on behalf of Hathway MCN Private Limited and given counter indemnity favouring the Bankers towards Bank Guarantees issued on behalf of Hathway MCN Private Limited and Hathway Media Vision Private Limited of Rs. 2,500,000 (Rs. Nil) and Rs. 200,000 (Rs. Nil) respectively included in note no. B (2) (a) above. Also Refer note no. B (2) (c) for Letter of Credit facility availed by Gujarat Telelink Private Limited. Details of debits/ credits which are purely in the nature of reimbursements are not included in above.

14) LEASES

(a) Finance Leases:

Written Down Value of Fixed Assets acquired under Finance lease as at 31st March 2011 is Rs.658,364,461 (Previous Year Rs. 710,720,615) Current Liabilities (Net of Advance) include Rs.335,982,935 payable to lessor under finance lease arrangement (Previous Year Rs. 500,048,930).

(b) Operating Leases (As Lessee): The Company's significant leasing arrangements in terms of Accounting Standard on Leases (AS 19) are in respect of Operating Leases for Premises and Equipments. The period of these leasing arrangements, which are cancellable in nature range between eleven months to six years and are renewable by mutual consent

(d) Details of Cancellable Leases are as under:

The treatment of the rental by the Company is as under:

Rental Expenses debited to the Profit and Loss Account Rs. 132,587,724 (Previous Year Rs. 93,315,533)

15) JOINT VENTURES

The Company has the following Joint Venture arrangements in the capacity of a Venturer in the following as on 31 March 2011:

a. Hathway Sukhamrit Cable and Datacom Private Limited*

b. Hathway Jai Mata Di Balaji Cable Network

c. Mantra Enterprises

d. Mona Cable

25) INTANGIBLE ASSETS

Based on factors such as past experience, industry trends, value added services and quality of services provided by the Company. trends in other countries, various changes proposed in the regulations governing the industry, future business plans, estimated residual value etc., the Company is of the opinion that the useful life of the Cable Television Franchise acquired by the company will exceed twenty years. Accordingly, the same has been amortised over a period of twenty years from the date of acquisition.

Based on factors such as past experience, remaining contract period, industry trends, estimated residual value etc. the Company is of the opinion that the useful life of the Movie & Serial Rights acquired by the company will exceed fifteen years. Accordingly, the same has been amortised upto a period of fifteen years from the date of commencement of the agreement.

16) The Company has opted for accounting the exchange difference 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 the Government of India on March 31, 2009. Accordingly the Company has capitalised exchange (Gain) / loss of Rs. 886,565 (P.Y. Rs. 99,176,752) with the cost of fixed assets.

17) During the year under review, the Company has not capitalized any borrowing cost in the absence of any qualifying assets.

18) Although, the market value of investments in Hathway Bhawani Cable & Datacom Limited is lower than cost, considering the long term and strategic nature of the investment, in the opinion of the management, such decline is temporary in nature and no provision is necessary for the same.

19) During the previous year, the Company had issued and allotted 20,000,000 Equity shares of Rs. 10 each at a price of Rs. 240 including a premium of Rs. 230 per equity share aggregating to Rs. 4,800,000,000 through an Initial Public Offer. The equity shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange with effect from 25th February 2010.

20) Previous year figures have been rearranged and regrouped wherever necessary.

Mar 31, 2010

BACKGROUND

The Company is ]Multi System Operator (MSO) and engaged in distribution of television channels through analog and digital cable distribution network and internet services through cable.

The Companys name was changed from "Hathway Cable & Datacom Private Limited" to "Hathway Cable & Datacom Limited" by a special resolution passed at the Extra-Ordinary General Meeting of the shareholders of the Company held on September 10, 2009.

1) The Company changed its status from a Private Limited Company to a Public Limited Company vide resolution dated 26th August, 2009 and subsequently approved by the Registrar of Company by issue of fresh certificate of incorporation dated 7th September 2009. Accordingly, the name was changed to Hathway Cable & Datacom Limited.

2) The Equity Shares were consolidated into shares with a face value of Rs. 10 each from Re. 1 each pursuant to resolution dated 26th August, 2009.

3) During the financial year 2008-09, the Company had issued and allotted 24,724 unsecured Fully & Compulsorily Convertible Debentures (FCCDs) of Rs 100,000 each. These FCCDs were compulsory convertible and investors had no option in this regard apart from the timing of the conversion. In view of the same, in its balance sheet dated 31st March, 2009, the Company had shown such FCCDs separately under the heading ShareholderÃs Funds. However, in view of an opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India in 2009-10, the Company has regrouped the previous year figure and outstanding balance of FCCDs is shown under the heading Unsecured Loans. These FCCDs were other than short-term & were received from other than banks. The said opinion was published after the Company had finalised its accounts for the financial year 2008-09.

Such FCCDs, as per the terms of the underlying agreements, have been converted into equity shares at an aggregate Securities Premium of Rs. 2,357,382,120 on 19th September, 2009.

4) CONTINGENT LIABILITIES

a) The Company has given a counter indemnity favouring the bankers to the extent of Rs. 59,788,500 (Previous Year Rs. 15,356,000) for issue of Bank Guarantees.

b) The Company has given Corporate Guarantee of Rs.438,250,000 (Previous Year Ã Rs. 250,000,000) to a Bank towards various credit facilities given by the Bank to its Subsidiary Companies.

c) Outstanding Letter of Credit Rs.182,484,780 (Previous Year Rs. 134,519,149) secured against assets acquired under LC facility, hypothecation of present and future current assets of the Company and extension of pari passu hypothecation of present and future movable fixed assets of the Company. This includes Rs. 39,237,000 (P. Y. Rs. Nil) utilised for one of the subsidiary, Gujarat Telelink Private Limited.

d) Pending finalization of negotiations with one of the broadcasters, the Company has accounted pay channel cost net of discounts expected from such broadcaster. The Company as well as the broadcaster has claims and counter claims against each other, which are yet to be finalized and settled. The contingent liability in respect of such claims could not be ascertained.

e) The relevant Authority under the Karnataka Sales Tax / VAT had initiated proceeding to reassess the CompanyÃs liability for the financial years 2001-02 to 2008-09 on the argument that light energy created while using OFC network for the purposes of transmission is goods and hence liable to tax under relevant state legislation.

On writ petition, the Karnataka High Court has held against the Company. On further appeal, the Honourable Supreme Court remanded the matter to the Tribunal. However, Sales Tax Tribunal did not entertain the appeal of the Company as no assessment was made.

The Assessing Officer, acting on Nil returns fled by the Company, has proposed to complete best judgement re-assessment to tax light energy as goods. This may result in approximate demand of Rs. 54,406,240 (Previous Year Rs. 970,899). The Company has fled detailed reply and the matter is pending.

f) Pursuant to various amendments under Karnataka Entertainment Tax Act, 1958 to levy entertainment tax on LCOs and MSOÃs, the Government of Karnataka has issued various notices for various periods. The Company has challenged the notices and validity of amendments with the Honble High Court of Karnataka. The Honble High Court of Karnataka has issued stay order against such notices.

The Company has fled a petition before the Honourable Court of Andhra Pradesh challenging the virus of the amendment to the Andhra Pradesh Entertainment Tax Act, 1939 which has resulted in the levying of the Entertainment Tax on MSOs. The petition has been admitted and the levy and the action pursuant thereto have been ordered to be stayed.

The above matters are pending and based on the outcome of the respective petitions, liability may extend to period beyond notice period. The contingent liability in respect of claims is considered as part of Claims against Company not acknowledged as debts below.

g) Two wholly owned subsidiaries of the Company viz. Binary Technologies Transfers Pvt. Ltd. and Hathway Internet Satellite Pvt. Ltd. are majority partners in a partnership firm namely M/s. Hathway Space Vision. The aforesaid majority partners of the firm had initiated legal action against the minority partners viz. Space Vision Cabletel Pvt. Ltd. with reference to some management and operational issues. The majority partners and the Company had lodged certain claims against the minority partners. Pursuant to Order passed by High Court dated 22nd March 2005, the matter was referred for the arbitration before Justice S. P. Bharucha (Retd.) An award has been passed by Justice S. P. Bharucha (Retd.), on 14th September, 2009 dismissing all claims as well as counter claims. Pursuant to dismissal of claim under arbitration, on 7th October,2009 the majority partners have fled a petition before Bombay High Court under section 9 of Arbitration and Conciliation Act seeking extension of restraining Interim Orders dated 12th May, 2004 and 22nd March, 2005 passed by the Honble High Court against the minority partners. The HonÃble High Court has been pleased to extend the said restraining Interim Order. On 5th November 2009 the majority partners have fled an Appeal before the Bombay High Court under section 34 of Arbitration and Conciliation Act, challenging the award dated 14th September 2009. The same is pending for hearing. Pending the Arbitration, on 2nd March 2009, the majority partners have also fled a Petition before the Bombay High Court seeking the interim relief for appointment of court receiver in order to carry out the activity of collection of subscription from the customers / operators. The same is also pending for hearing.

The Company based on legal advice has not made any provision towards claims raised by the minority partner of the firm and are considered as claims against the Company not acknowledged as debt below.

h) Other Claims against the Company not acknowledged as debts Rs. 227,245,635 (Previous year Rs. 115,514,126).

6) Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro & Small Enterprises. The Company is in the process of compiling relevant information from its supplier about their coverage under the said Act. Since the relevant information is not readily available, no disclosures have been made in the accounts. However, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material. This has been relied upon by the Auditors.

7) The debtors includes amount due from disconnected / inactive customers and outstanding in excess of one year. The Company is taking adequate steps for recovery of overdue debts and advances and wherever necessary, adequate provisions have been made. In the opinion of the Board, the Debtors and Loans & Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the Balance Sheet.

8) The Company in its ordinary course of business has promoted / acquired interest in various entities. The Companys exposure to these entities on account of Investments in equity shares and preference shares, on account of amounts advanced as Loans & Advances and Sundry Debtors is Rs.2,563,514,478 (Previous Year Rs. 2,467,413,159), Rs. 900,270,376 (Previous Year Rs. 879,299,720) and Rs. 340,118,350 (Previous Year Rs. 217,868,787) respectively. Most of the entities have accumulated losses and negative net worth. The Companys exposure to such loss making entities on account of investments in equity shares and preference shares, on account of amounts advances as Loans & Advances and Sundry Debtors is Rs. 478,001,508 (Previous Year Rs. 414,790,189), Rs. 691,418,055 (Previous Year Rs. 620,650,471) and Rs. 241,157,947 (Previous Year Rs. 129,321,190). The Company has made provision on overall basis of Rs. 55,124,780 (Previous Year Rs. 53,124,780), Rs. 607,629,002 (Previous Year Rs. 449,694,643) and Rs. 70,207,286 (Previous Year Rs. 70,779,257) against such Investments, Loans and Advances and Sundry Debtors respectively.

Considering the long-term involvement of the Company in these entities and strategic impact it has on the business of the Company, the Company has committed to provide financial support to these entities. The provisions made during the year include the amounts advanced during the year.

The provision made in respect of above during the year, is considered under Exceptional Item in the Profit and Loss Account.

9) During the year due to certain unforeseen conditions, in the city of Chennai, Local Cable Operators (LCO) and subscribers have migrated to competing Multi System Operator (MSO) and other service providers.

The Company has removed certain distribution equipments and head-end equipments (part of Plant & Machinery) from the city. Some of such assets are already deployed in other states/cities to maximize the economic returns to the Company. The Company is in the process of recovering Set Top Boxes (STBs) and Modems (part of Plant & Machinery) having Written Down Value as at 31 March 2010 of Rs. 152,905,743 which is lying with LCOs / subscribers (net of recovery of some STBs and Modems till Balance Sheet date) and balance distribution equipments having written down value of Rs. 47,963,371 as at 31 March 2010. Upto 31st March 2010, the exercise of recovery of asset has been partially completed and loss of assets amounting to Rs. 116,073,964 has been recognised and shown under Exceptional Item during the year. In view of the management, at this stage, no additional loss is expected, however, the same could be ascertained only on completion of entire exercise.

In view of the management, the balance assets would be safe and secure and in working conditions having value at least equivalent to its book value and hence no provision is considered necessary in terms of Accounting Standard 28 on Impairment of Assets.

Provision for doubtful debts made in respect of amounts receivable from all its LCOs and subscribers who have migrated is considered as "Exceptional Items" in the financial statements.

10) During the current year, based on the past performance of Set Top Boxes deployed by the Company, and further based on the technical certification, the Company has decided to change itÃs policy and recompute the depreciation with retrospective effect on a straight line basis over a period of eight years. The reversal of depreciation for earlier years amounting to Rs 64,398,315 is credited to Profit and Loss account and shown under Exceptional Item.

11) Loans and Advances include Rs. 3,017,183 (Previous Year Rs. 3,005,441) due from Managing Director [Maximum amount outstanding during the year Rs. 3,161,174 (Previous Year Rs. 3,166,167)]

12) Estimated amount of contracts (including acquisition of intangible assets net of advances) remaining to be executed on capital account and not provided for aggregate to Rs. 102,526,288 (Previous year Rs. 149,130,574).

13) EMPLOYEE STOCK OPTION PLAN

The shareholders of the Company have approved Employee Stock Option Plan i.e. HATHWAY ESOP 2007 ("The Plan"). The Plan provides for issue of options (underlying equity share of Re. 10 each) to the employees of the Company at the price determined by the remuneration committee appointed by the Board of Directors. Price determined by the remuneration committee is in the range of Rs. 110.20 and Rs. 157.30.

The Options granted under the Plan shall vest within not less than one year and not more than fve years from the date of grant of options. Under the terms of the Plan, 20% of the options will vest to the employees every year. Once the options vest as per the Plan, they would be exercisable by the Option Grantee at any time within a period of three years from the date of vesting and the shares received on exercise of such options shall not be subject to any lock-in period.

14) SEGMENTAL REPORTING

The Company is a Multi System Operator providing Cable Television Network Services, Internet Services and allied services which is considered as the only reportable segment. The Companys operations are based in India.

15) RELATED PARTY DISCLOSURES Particulars of Related Parties

A Controlled by:

(Upto 19th February 2010)

Mr. Rajan Raheja

Mr. Akshay Raheja

Mr. Viren Raheja

Hathway Investments Pvt. Ltd.

Spur Cable & Datacom Pvt. Ltd.

Asian Cable Systems Pvt. Ltd.

B Under Control of the Company

1 Wholly Owned Subsidiaries:

Bee Network & Communication Pvt. Ltd.

Binary Technology Transfers Pvt. Ltd.

Hathway C-Net Pvt. Ltd.

Hathway Enjoy Cable Network Pvt. Ltd.

Hathway Gwalior Cable & Datacom Pvt. Ltd.

Hathway Digital Saharanpur Cable & Datacom Pvt. Ltd.

Hathway Internet Satellite Pvt. Ltd.

Hathway JMD Farukhabad Cable Network Pvt. Ltd.

Hathway Media Vision Pvt. Ltd.

Hathway Space Vision Cabletel Pvt. Ltd.

Hathway United Cables Pvt. Ltd.

Hathway Universal Cabletel & Datacom Pvt Ltd.

Ideal Cables Pvt. Ltd.

ITV Interactive Media Pvt. Ltd.

Liberty Media Vision Pvt. Ltd.

Vision India Networks Pvt. Ltd.

Win Cable and Datacom Pvt. Ltd.

2 Other Ã Subsidiaries

Chennai Cable Vision Network Pvt. Ltd.

Channels India Network Pvt. Ltd

Elite Cable Network Pvt. Ltd.

Hathway ICE Television Pvt. Ltd.

Hathway Sonali Om Crystal Cable Pvt. Ltd.

Hathway MCN Pvt. Ltd.

Hathway Nashik Cable Network Pvt. Ltd.

Hathway Krishna Cables Pvt. Ltd.

Hathway Rajesh Multi channel Pvt. Ltd.

Hathway Software Developers Pvt. Ltd

UTN Cable Communications Pvt. Ltd.

Gujarat Telelink Pvt. Ltd.

Hathway Bhaskar Multinet Pvt. Ltd.

Hathway Latur MCN Cable & Datacom Pvt. Ltd.

Hathway Channel 5 Cable & Datacom Pvt. Ltd.

Hathway Mysore Cable Network Pvt. Ltd.

Hathway Prime Cable & Datacom Pvt Ltd

Hathway Mantra Cable & Datacom Pvt. Ltd.

Hathway Jai Mata Di Sherawali Cable & Datacom Pvt Ltd.

Hathway Sai Star Cable & Datacom Pvt. Ltd.

Hathway New Concept Cable & Datacom Pvt. Ltd.

Hathway Palampur Cable Network Pvt. Ltd.

Hathway Cable MCN Nanded Pvt. Ltd.

Net 9 Online Hathway Pvt. Ltd.

Hathway Bhawani Cabletel and Datacom Ltd.*

Hathway Dattatray Cable Network Pvt. Ltd.

Hathway Bhaskar Pagariya Multinet Pvt. Ltd

CCN Entertainment India Pvt. Ltd.

Chhattisgarh Broadband Network Pvt Ltd.

3 Other Enterprises Hathway Cable Entertainment Pvt. Ltd.

C Others

1 Associate Company and Joint Ventures:

Pan Cable Services Pvt. Ltd. Hathway VCN Cabletel Pvt. Ltd.**

Hathway Sukhamrit Cable & Datacom Pvt. Ltd.***

Hathway Space Vision

Hathway Jhansi JMDSR Cable & Datacom Pvt. Ltd.

Hathway Jai Mata Di Balaji Cable Network

2 Companies / Firms under the Globus Stores Pvt. Ltd. Significant Influence of Directors / R & S Business Centre Shareholders**** Outlook Publishing (India) Pvt. Ltd.

3 Key Managerial Personnel K Jayaraman-Managing Director

* Hathway Bhawani Cabletel and Datacom Ltd was a joint venture upto 31st August 2009.

**Hathway VCN Cabletel Pvt. Ltd. was a subsidiary upto 16th March 2009

***Hathway Sukhamrit Cable & Datacom Pvt. Ltd. was a subsidiary upto 1st September 2009

****The above Companies were under the Significant influence of Directors/Shareholders upto 19th February 2010.

16) Hathway Jai Mata Di Sherawali Cable & Datacom Private Limited

The Company has fled petition to wind up Hathway Jai Mata Di Sherawali Cable & Datacom Private Limited (HJMD), a Subsidiary Company, on just and equitable ground. The Company has investment of Rs. 8,000,000 and Receivable of Rs. 7,450,717 from HJMD and the same have been fully provided for. In view of the Management disputes with the Other Shareholders, the Company has decided to take such an action. The Delhi High Court by its order dated May 5, 2010 records of HJMD has submitted the petition and has opined that it is just and equitable that the Company be wound up. The Official Liquidator of the Delhi high Court has been appointed as the provisional liquidator of the Company and has been directed to take overall the assets and books of accounts and records of the Company.

17) INTANGIBLE ASSETS

Based on factors such as past experience, industry trends, value added services and quality of services provided by the Company, trends in other countries, various changes proposed in the regulations governing the industry, future business plans, estimated residual value etc., the Company is of the opinion that the useful life of the Cable Television Franchise acquired by the company will exceed twenty years. Accordingly, the same has been amortised over a period of twenty years from the date of acquisition.

Based on factors such as past experience, remaining contract period, industry trends, estimated residual value etc. the Company is of the opinion that the useful life of the Movie & Serial Rights acquired by the company will exceed twelve years. Accordingly, the same has been amortised over a period of twelve years from the date of acquisition.

18) The Company has opted for accounting the exchange difference 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 the Government of India on March 31, 2009. Accordingly the Company has capitalised exchange (Gain) / loss of Rs. (99,176,752) (P.Y. Rs. 161,692,877 including gain of Rs. 3,167,018 pertaining to earlier periods adjusted through profit and loss account) with the cost of fixed assets.

19) During the year under review, the Company has not capitalized any borrowing cost in the absence of any qualifying assets.

20) During the financial year 2007-08 the Company was allotted 510,000 Equity Shares and 26,020 Preference Shares of Hathway Bhaskar Multinet Private Limited on demerger of Cable TV Business of Visual Media Entertainment Private Limited against 510,000 debentures held by the Company having face value of Rs. 59/- and aggregate book value of Rs 335,621,739. The premium on the debentures was allocated to Equity and Preference shares proportionately on the basis of number of shares. The Management is now of the view that the premium portion of debentures was towards equity interest and accordingly, the same should be fully added to the Equity shares. Hence, during the year ended on 31st March 2010, the amount of Rs. 15,995,845 which was allocated to the preference Shares, has been added to cost of Equity shares and accordingly, previous year figure has also been regrouped.

21) During the year, the Company has issued and allotted 20,000,000 Equity shares of Rs. 10 each at a price of Rs. 240 including a premium of Rs. 230 per equity share aggregating to Rs. 4,800,000,000 through an Initial Public Offer. The equity shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange with effect from 25th February 2010.

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