Directors Report of Dish TV India Ltd.
Mar 31, 2023
BOARDâS REPORT
To the Members,
Your Directors are pleased to present the 35th (Thirty fifth) Annual Report of your Company providing an overview of the business
and operations of the Company together with Annual Audited Standalone and Consolidated Financial Statements and Auditor''s
Report thereon for the Financial Year (''FY'') ended March 31, 2023, prepared as per Indian Accounting Standards prescribed under
Section 133 of the Companies Act, 2013 (Act'').
The financial performance of your Company for the FY ended March 31, 2023, is summarized below:
|
Particulars |
Standalone-Year Ended |
Consolidated-Year Ended |
||
|
March 31,2023 |
March 31,2022 |
March 31, 2023 |
March 31,2022 |
|
|
Sales & Services |
110,973 |
138,370 |
226,185 |
280,249 |
|
Other Income |
14,654 |
13,033 |
3,320 |
2,392 |
|
Total Income |
125,627 |
151,403 |
229,505 |
282,641 |
|
Total Expenses |
123,388 |
128,447 |
247,556 |
255,372 |
|
Profit/(Loss) before Tax & Exceptional Item |
2,239 |
22,956 |
(18,051) |
27,269 |
|
Exceptional Item |
220,629 |
277,190 |
190,761 |
265,388 |
|
Profit/(Loss) before Tax |
(218,390) |
(254,234) |
(208,812) |
(238,119) |
|
Profit / (loss) from continuing operations before tax |
(218,390) |
(254,234) |
(208,812) |
(238,119) |
|
-Current Tax |
- |
- |
- |
2,912 |
|
-Deferred tax-continued operations |
(15,427) |
(11,992) |
(40,458) |
(54,308) |
|
Profit / (loss) from continuing operations after tax |
(202,963) |
(242,242) |
(168,354) |
(186,723) |
|
Profit/(Loss) after Tax |
(202,963) |
(242,242) |
(168,354) |
(186,723) |
|
Profit/(Loss) for the Year |
(202,963) |
(242,242) |
(168,354) |
(186,723) |
|
Add: Balance brought forward |
(570,747) |
(328,469) |
(571,290) |
(388,174) |
|
Adjustment for Non-controlling interest |
- |
- |
- |
3,587 |
|
Add: Restatement of opening reserve |
- |
- |
5,729 |
- |
|
Add: Re-measurement of post-employment |
(56) |
(36) |
(87) |
20 |
|
Amount available for appropriations |
(773,766) |
(570,747) |
(734,002) |
(571,290) |
|
Balance Carried Forward |
(773,766) |
(570,747) |
(734,002) |
(571,290) |
There are no material changes and commitments that occurred after the close of the financial year till the date of this report
which affects the financial position of the Company.
Based on internal financial control framework and compliance systems established in the Company and verified by the
auditors'' and reviews performed by the management and/or the Audit Committee of the Board, your Board is of the opinion
that Company''s internal financial controls were adequate and effective, during the financial year 2022-23.
The shareholders are aware that the resolution with respect to adoption of Annual Audited Financial Statements of the
Company on a standalone and consolidated basis, for the financial year ended March 31, 2022 and March 31, 2021, including
the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement for both the financial year ended on that date
and the Reports of the Board of Directors and Auditors thereon were not adopted by the Shareholders of the Company with
requisite majority.
The Board of Directors of the Company, in addition to the agenda items in relation to Financial Year 2022-23, have also
proposed to present the Annual Audited Financial Statements of the Company on a standalone and consolidated basis, for the
Financial Year 2021-22 & Financial Year 2020-21, without any modification, for consideration and adoption by the Shareholders
at the 35th Annual General Meeting of the Company, schedule to be held on Monday, September 25, 2023, at 1730 Hrs.
Your Board intends to retain its internal accrual for future business requirements and the growth of the Company. Accordingly,
your Board has not recommended any dividend during the year under review.
The Board of Directors of the Company had approved and adopted a Policy on Distribution of Dividend, as amended from
time to time, to comply with Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (''Listing Regulations''). The said Policy of the Company sets out the parameters and
circumstances that will be taken into account by the Board in determining whether or not to distribute dividend to its
shareholders, the quantum of profits and/or retained profits earned by the Company to be distributed as dividend. The policy
is available on the website of the Company viz. https://www.dishd2h.com.
Dish TV, the first direct-to-home entertainment provider in India, has contributed to digitizing the country''s entertainment
industry. The Company has played a pivotal role in bringing the finest in-home television viewing through the most advanced
digital technology. Dish TV has consistently worked to advance television viewing by incorporating futuristic features that
provide consumers with easy access to a broad variety of linear and digital content. All four of its brands, namely DishTV, d2h,
Watcho OTT app, and Zing Super, enjoy significant brand equity among consumers at their respective price points.
During FY 2022-23, Dish TV introduced the OTT aggregation service through its Watcho OTT app, by offering multiple OTT
services into a single window. The service provides most of the relevant OTT services, spread across all the genres including
the regional OTT services. To access content from the aforementioned platforms, only a single subscription is required. Watcho
App has registered significant growth in the number of downloads, growing from 4 million in April 2020 to 70 million in March
2023. This success is a result of the Company''s determination to create original content and communicate with the youth of
India. Several original series of varying genres were published throughout the year. In order to reach a broader audience,
the platform was also made available in Hindi and Telegu. The emphasis going forward will be on incorporating additional
languages. The Company believes that Watcho establishes a crucial link between the Company and youth. Together with
Watcho, the Company''s over-the-top (OTT) platform, Dish TV has gained dominance in the domestic media and entertainment
market, driven by its excellent pan-India distribution system. With a focus on the customer at the center of its operations, the
Company endeavours to provide superior quality at competitive prices.
The Company launched a Freemium conditional access system for accessing pay TV channels on the Zing Super Box (2-in-1
box), which was designed with the consumer in mind. The Company rationalised and reduced the pricing points to fit customers''
monthly budgets. Additionally, the Company introduced several new channels and value-added services on the Dish platform.
To better serve its consumers, Dish TV has been investing in data management and analytics for both DTH and Digital
platforms, allowing for a greater comprehension of consumption and behavioral data. Even though the previous fiscal year
presented a number of challenges, the Company was able to maintain its business trajectory and reach more viewers than in
the previous year. The company was able to increase new DTH subscribers by 3.4% over the course of the year but remained
vulnerable to changing viewing patterns, which continued to influence its subscribers'' recharging behavior. Due to volatile
viewing habits and cautious spending in the face of inflationary pressure, subscription revenues declined by 29.3% during the
year. Revenue from operations reached '' 28,618 million. As a result of the decline in revenue, the EBITDA margin decreased
to 40.4% as compared to 58.7% during the previous fiscal year. The Company remained committed to deleveraging its balance
sheet for the fourth consecutive year and paid off '' 3,031 million during the year, bringing its total debt to '' 725 million at the
end of the period under consideration. This resulted in substantial savings in financial expenses, which decreased by 14.4%.
Loss before exceptional items and taxes stood at '' 1,805 million as compared to '' 2,727 million in FY 2021-22. Significant
expenses for exceptional items led to total losses of '' 19,076 million. The company''s solid financial position enables it to invest
in technology and become future-ready. With the government''s emphasis on rail and road infrastructure, the development
of 4G and 5G stacks, the drive for housing for all, and efforts to improve rural income, the rural population''s demand for
DTH services is destined to rise. The Company is well-equipped to capitalize on this emergent opportunity by leveraging its
industry-leading position.
DIRECT TO HOME (âDTH'') LICENSE
Your Company was issued Direct to Home (''DTH'') License by the Ministry of Information and Broadcasting, Government of
India (''MIB'') in the year 2003, which License was valid for a period of 10 years, i.e. upto September 2013. Subsequently, MIB
has been periodically granting interim extensions of the said License.
The MIB vide Order dated December 30, 2020, issued amended Guidelines for DTH sector. The amended guidelines, inter-alia
provide for a term of 20 years for the DTH License and the license fee revised to 8% of Adjusted Gross Revenue (AGR), which
is to be calculated by deduction of GST from the Gross Revenue. The terms of the amended guidelines have come into effect
from April 1,2021. In accordance with the amended guidelines, the Company had applied for issue of License and the MIB has
granted provisional License with effect from April 1, 2021, vide its letter dated March 31, 2021, on the terms and conditions
as mentioned therein.
The Ministry of Information and Broadcasting (''MIB'') had issued a demand notice in the year 2014 for the License Fee
pertaining from the date of issuance of DTH License till Financial Year 2012-13. The said Demand Notice was challenged by
the Company before the Hon''ble Telecom Dispute Settlement Appellate Tribunal (''TDSAT'') and the said demand has been
stayed by the Hon''ble TDSAT, which stay continues to be in force.
Further, the Company filed a Writ Petition before the Hon''ble High Court of Jammu and Kashmir (now Hon''ble High Court of
Union Territory of Jammu and Kashmir and Ladakh) at Jammu challenging inter-alia the quantum / applicability of License
Fee and imposition of interest on the outstanding license fees. In the said petition, vide order dated October 13, 2015, the
Hon''ble High Court had allowed the interim prayer of the Company, which order continues to be in force. Similar Writs are
also pending before the Hon''ble Supreme Court of India.
Subsequently, the MIB, vide its communication dated December 24, 2020, had raised a claim on the Company to pay the
license fee for the period from the date of issuance of DTH License till FY-2018-19. However, the MIB in its said letter, also
mentioned that the amount is further subject to verification and audit and the outcome of various court cases pending before
the Hon''ble TDSAT, the Hon''ble High Court of Jammu and Kashmir at Jammu and the Hon''ble Supreme Court of India, in the
matter of DTH License fee. Company has suitably replied to the said Notice vide its reply dated January 06, 2021.
Similar notices were also issued by the Ministry vide its communications dated October 26, 2022, and March 31,2023. Under
the communication dated March 31, 2023, an amount of Rs. 5,652.28 Crore was claimed by the MIB for the period from the
date of issuance of DTH License till FY-2021-22 (including interest thereon as on March 31, 2023). The communication has
been adequately replied by the Company stating that the said issue in relation to the License fee is pending adjudication
before the Hon''ble High Court of Jammu and Kashmir at Jammu and the Hon''ble Supreme Court of India. The DTH License
fee matter has already been through several rounds of litigation, the final outcomes of which are yet to be argued and
concluded.
SUBSIDIARIES AND ASSOCIATE COMPANIES
As on March 31, 2023, your Company has 1 (One) Wholly Owned Subsidiary viz. Dish Infra Services Private Limited and 1
(One) Subsidiary Company viz. C&S Medianet Private Limited. There has been no change in the nature of business of the
subsidiaries.
Subsidiaries in India:I. Dish Infra Services Private Limited
Dish Infra Services Private Limited, the Wholly Owned Subsidiary of Dish TV India Limited, is inter-alia engaged into
provision of services pertaining to infra support services to the subscribers for facilitating the DTH services including the
instruments which are required for receiving DTH signals such as set top boxes (STB), dish antenna, Low Noise Boxes
(LNB) and other customer related services including call centre services and repairs.
In compliance with the provision(s) of Regulation 24 of the Listing Regulations, Dr. (Mrs.) Rashmi Aggarwal acts as an
Independent Director on the Board of Dish Infra Services Private Limited (material unlisted subsidiary).
II. C&S Medianet Private Limited
Your Company holds 51% stake in C&S Medianet Private Limited thereby making it a subsidiary of the Dish TV India
Limited. While C&S Medianet Private Limited was primarily established as a knowledge center to assist the distribution
industry in areas such as packaging, content acquisition, and regulatory interaction, it is currently not engaged in any
active commercial operations.
Your Company, upon the approval of Board of Directors, had incorporated a Joint Venture (''JV'') Company with Satnet (Private)
Limited, under the Laws of Sri Lanka, in the name and style of ''Dish T V Lanka (Private) Limited'' for providing Direct to Home
Services in Sri Lanka, on April 25, 2012, with a paid-up share capital of one (1) million Sri Lankan Rupees. Your Company held
70% of the paid-up share capital and Satnet (Private) Limited held 30% of the paid-up share Capital in Dish T V Lanka (Private)
Limited. Owing to adverse market condition, unfavourable taxation regime, high competition and a very small market size, the
operations of Dish T V Lanka (Private) Limited were not in line with the desired projections and accordingly the operations of
the Company were suspended.
The Board at its meeting held on January 29, 2021, approved the divestment of Company''s entire equity investment in Dish T
V Lanka (Private) Limited and write off of receivables. Further, in terms of the approval granted by the Board of Directors of
the Company and approval received from Reserve Bank of India in this regard, the entire stake of the Company aggregating
to 70,000 equity shares of Sri Lankan Rupees 10/- each aggregating to Sri Lankan Rupees 700,000/- held in Dish T V Lanka
(Private) Limited (Company Registration No. PV 85639), were transferred to Union Network International Pvt Ltd (PV 203126)
having its office at 20 Nelson Place, Colombo 6, Sri Lanka in the Financial Year 2022-23. Accordingly, as on March 31, 2023,
Dish T V Lanka (Private) Limited ceased to be a Subsidiary of the Company.
Besides the above, there are no other subsidiaries, joint ventures, or associates of the Company.
Audited Accounts of Subsidiary Companies:
Your Company has prepared the Audited Consolidated Financial Statements in accordance with Section 129(3) of the Act read
with the applicable Indian Accounting Standards and Listing Regulations. As required under the Indian Accounting Standards,
issued by the Institute of Chartered Accountants of India ('' IC AI'') and applicable provisions of the Listing Regulations, the
Audited Consolidated Financial Statements of the Company reflecting the Consolidation of the Accounts of its subsidiaries are
included in this Annual Report. Further, a statement containing the salient features of the financial statements of subsidiaries
pursuant to sub-section 3 of Section 129 of the Companies Act, 2013 (the Act'') in the prescribed form AOC-1 is appended to
this Board Report.
In accordance with Section 136 of the Act, the audited financial statements including the consolidated financial
statements and related information of the Company and audited accounts of the subsidiaries are available on the
website of the Company viz. www.dishd2h.com. Your Company has a policy for determining Material Subsidiaries in
terms of the applicable regulations. As on March 31, 2023, the Company has only one Material Subsidiary viz. Dish Infra
Services Private Limited. The Policy for determining Material Subsidiaries is available on the Company''s website viz.
www.dishd2h.com.
In accordance with Section 136 of the Act, the Annual Audited Financial Statements including the Consolidated Financial
Statements and related information of the Company and Annual Audited Accounts of the Subsidiaries are available on the
investor section on the website of the Company viz. www.dishd2h.com.
During the year under review, there was no change in the Share Capital of the Company. Accordingly, as of March 31,2023, the
Capital Structure of the Company stand as follows:
⢠The Authorised Share Capital of the Company is '' 6,500,000,000/- (Rupees Six hundred and Fifty Crore Only) divided into
6,500,000,000 (Six hundred and Fifty Crore) Equity shares of '' 1/- (Rupee One Only) each.
⢠The Issued Equity Share Capital of the Company comprises of 1,923,785,637 (One Hundred Ninety Two Crores Thirty
Seven Lakhs Eighty Five Thousand Six Hundred and Thirty Seven) equity shares comprising of 1,923,785,637 fully paid up
equity shares of ''1/- (Rupee one) each.
⢠The Paid-up Equity Share Capital of the Company is '' 1,841,256,154/- (Rupees One Hundred Eighty Four Crore Twelve
Lakh Fifty Six Thousand One Hundred and Fifty Four) comprising of 1,841,256,154 fully paid up equity shares of '' 1/-
(Rupee one) each.
Listing of Companyâs Securities
Your Company''s fully paid-up equity shares continue to be listed and traded on National Stock Exchange of India Limited (''NSE'')
and BSE Limited (''BSE''). Both Stock Exchanges have nationwide trading terminals and hence facilitate the shareholders/
investors of the Company in trading the shares. The Company has paid the annual listing fee for the financial year 2023-24 to the
said Stock Exchanges.
Further, consequent to amalgamation of Videocon D2h Limited into and with the Company, your Company had issued new
Global Depositary Receipts (the "GDRs") to the holders of American Depositary Shares ("ADSs") of Videocon D2H Limited
which are listed on the Professional Securities Market ("PSM") of the London Stock Exchange. Necessary fees in relation to
the GDR''s of the Company listed on London Stock Exchange have also been paid.
Your Company has arrangements with National Securities Depository Limited (''NSDL) and Central Depository Services (India)
Limited (''CDSL''), the Depositories, for facilitating the members to trade in the fully paid-up equity shares of the Company in
Dematerialized form. The Annual Custody fees for the financial year 2023-24 have been paid to both the Depositories.
5. EMPLOYEE STOCK OPTION SCHEME
Your Company instituted an Employees Stock Option Scheme (ESOP - 2007) to motivate, incentivize and reward employees.
With a view to launch a new ESOP Scheme, the NRC at its meeting held on August 17, 2017, decided not to make any fresh
grant of options under Employee Stock Option Scheme (ESOP - 2007) of the Company, and withdrew the Scheme by cancelling
the stock options which were yet to be granted under the scheme.
Further, the Company with an objective to attract, retain, motivate, incentivize and to attract and retain the best talent,
recommended a new ESOP Scheme - ''ESOP 2018'' for the employees. The said scheme was approved by the shareholders of
the Company at its thirtieth (30th) Annual General Meeting held on September 28, 2018. Further, extension of benefits of the
scheme to the employee(s) of subsidiary companies and to any future holding company was also approved by Shareholders on
November 30, 2018, vide Postal Ballot Notice dated October 25, 2018. In compliance with the Securities and Exchange Board
of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time, your Board had
authorized the Nomination and Remuneration Committee (''NRC'') to administer and implement the Company''s Employees
Stock Option Scheme including deciding and reviewing the eligibility criteria for grant and /or issuance of stock options under
the Scheme.
Applicable disclosures relating to Employees Stock Options as at March 31,2023, in terms of extant regulations, are annexed to
this report and is also available on the website of the Company viz. www.dishd2h.com. The ESOP Schemes of the Company are
in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations,
2021.
A Certificate has been received from Jayant Gupta and Associates, Practicing Company Secretary certifying that the Company''s
Employee Stock Option Scheme has been implemented in accordance with Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolution passed by the shareholders.
In terms of the Scheme of Arrangement amongst Videocon D2h Limited and Dish TV India Limited and their respective
Shareholders and Creditors (''Scheme''), the ADS holders of Videocon D2h Limited were issued Global Depositary Receipts (the
''GDRs'') of Company. The effective date of issuance of GDRs was April 12, 2018, and the same were listed on the Professional
Securities Market of the London Stock Exchange on April 13, 2018.
In terms of the said Scheme, the Board at its meeting held on March 26, 2018, approved the issuance of 277,095,615 (Twenty
Seven Crore Seventy Lakh Ninety Five Thousand Six hundred and Fifteen) Global Depositary Receipts (the ''GDRs'') to the
holders of ADSs of Videocon D2h Limited (each GDR representing one equity share of the Company, exchanged at a rate of
approximately 8.07331699), new GDRs for every one Videocon D2h Limited ADS (rounded off up to eight decimal places).
The underlying equity shares against each of the GDR''s were issued in the name of the Depository viz. Deutsche Bank Trust
Company Americas.
Out of the total 277,095,615 (Twenty Seven Crore Seventy Lakh Ninety Five Thousand Six hundred and Fifteen) GDRs issued
by the Company upon completion of merger, the Investors have cancelled 166,454,364 (Sixteen Crore Sixty Four Lakh Fifty
Four Thousand Three Hundred and Sixty Four) GDRs till the end of the Financial Year under review, in exchange for underlying
equity shares of the Company. Accordingly, as on March 31, 2023, the outstanding GDRs of the Company are 110,641,251
(Eleven crore Six Lakh Forty One Thousand Two Hundred and Fifty One) GDR.
During the year, the Registered Office of the Company has been shifted from ''3/B, 3rd Floor, Goldline Business Centre, Link
Road, Malad West, Mumbai 400 064, Maharashtra'' to ''Office No. 803, 8th Floor, DLH Park, S.V. Road, Goregaon(west), Mumbai
400 062, Maharashtra'', with effect from September 28, 2022.
8. REGISTRAR & SHARE TRANSFER AGENT
The Registrar & Share Transfer Agent (''RTA'') of the Company is Link Intime India Private Limited. The Registered office of
Link Intime India Private Limited is situated at C 101, 247 Park, LBS Marg, Vikhroli (West), Mumbai - 400 083, Maharashtra.
9. CORPORATE GOVERNANCE AND POLICIES
The Company''s principles of Corporate Governance are based on transparency, accountability and focus on the sustainable
long-term growth of the Company. Responsible corporate conduct is integral to the way we do our business. Our actions
are governed by our values and principles, which are reinforced at all levels within the Company. Our understanding to
effective Corporate Governance practices constitutes the strong foundation on which successful commercial enterprises
are built to last.
In order to maximize shareholder value on a sustained basis, your Company constantly assesses and benchmarks itself with
well-established Corporate Governance practices. In terms of the requirement of Regulation 34 read with Schedule V of the
Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by Jayant Gupta
and Associates, Practising Company Secretary is attached and forms an integral part of this Annual Report. Management
Discussion and Analysis Report and Business Responsibility and Sustainability Report (''BRSR'') as per Listing Regulations are
presented in separate sections forming part of this Annual Report.
In compliance with the requirements of the Act and the Listing Regulations, your Board has approved various Policies including
Code of Conduct for Board of Directors and Senior Management, Policy for determining material subsidiaries, Policy for
preservation of documents & archival of records on website, Policy for determining material event, Policy for fair disclosure
of unpublished price sensitive information, Corporate Social Responsibility Policy, Whistle blower & Vigil mechanism, Related
Party Transaction Policy, Dividend Distribution Policy, Nomination and Remuneration Policy, and Risk Management Policy.
These policies and codes are reviewed by the Committees / Board from time to time. These policies and codes along with the
familiarisation programme for Independent Directors and terms and conditions for appointment of independent directors are
available on Company''s website viz. www.dishd2h.com.
In compliance with the requirements of Section 178 of the Act, the Nomination and Remuneration Committee (NRC) of your
Board has fixed the criteria for nominating a person on the Board which inter alia include desired size and composition
of the Board, age limits, qualification / experience, balance of skills, knowledge & experience and independence of
individual.
Further, in compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015
(''PIT Regulations''), as amended from time to time, on prevention of insider trading, your Company has a comprehensive
Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code lays down guidelines, which
advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company
and cautions them on consequences of non-compliances. Your Company has further put in place a Code of practices and
procedures of fair disclosures of unpublished price sensitive information. The said codes are applicable to all Directors, KMPs
and other Designated Persons, as identified in the Code, who may have access to unpublished price sensitive information of
the Company. The codes are available on Company''s website Wz.www.dishd2h.com
The Audit Committee of the Board has been vested with powers and functions relating to Risk Management which inter alia
includes (a) review of risk management policies and business processes to ensure that the business processes adopted
and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) evaluation of internal
financial controls and risk management systems; (c) laying down procedures relating to Risk assessment and minimization;
and (d) formulation, implementation and monitoring of the risk management plan.
Your Company has a Risk Management Committee, which inter-alia accesses the Company''s risk profile, acceptable level of
risk, access cyber security, develop and maintain risk management framework, measures of risk mitigation and business
continuity plan. The said Committee also performs such other functions as may be entrusted to it by applicable regulatory
provisions and the Board, from time to time.
10. DIRECTORS'' & KEY MANAGERIAL PERSONNEL
Your Company''s board comprises of Directors representing a blend of professionalism, knowledge and experience which
ensures that the Board independently perform its governance and management functions.
As on March 31,2023, your Board comprised of three (3) Independent Directors (including two Independent Women Director).
Pursuant to the provisions of Up-linking Guidelines of the Ministry of Information & Broadcasting (''MIB''), the Company is
required to obtain prior permission of the MIB to affect any change in the Board of Directors and / or Chief Executive Officer.
During the year and subsequent to the closure of financial year, the following changes occurred in the Board of Directors of
the Company:
1. The Nomination and Remuneration Committee and the Board at their respective meetings held on March 25, 2022, re¬
appointed Mr. Jawahar Lal Goel as the Managing Director of the Company for the period from April 1, 2022, to March 31,
2025, and re-appointed Mr. Anil Kumar Dua as the Whole Time Director of the Company for the period from March 26,
2022, to March 25, 2025, both being subject to approval of the Shareholders.
2. Upon receipt of the prior permission from MIB on May 13, 2022, the Nomination and Remuneration Committee and the
Board at their respective meetings held on May 25, 2022, appointed of Mr. Rajagopal Chakravarthi Venkateish as an
Independent Director (Additional) for a period of 5 years with effect from May 25, 2022, subject to the approval of the
Shareholders.
3. Basis on the votes cast by the shareholders at the Extra Ordinary General Meeting held on June 24, 2022, Mr. Rajagopal
Chakravarthi Venkateish vacated the office of Independent Director, Mr. Anil Kumar Dua vacated the office of Whole Time
Director and Mr. Jawahar Lal Goel vacated the office of Managing Director of the Company.
4. Upon receipt of prior permission from MIB on July 18, 2022, the Nomination and Remuneration Committee and the Board
at their respective meetings held on July 29, 2022, appointed Mr. Rakesh Mohan as an Independent Director (Additional)
of the Company for a period of 5 years with effect from July 29, 2022, subject to the approval of the Shareholders.
5. Mr. Jawahar Lal Goel, Chairman and Non-Executive Director, resigned from the said position from the close of business
hours of September 19, 2022.
6. Basis on the votes cast by the shareholders at the 34th Annual General Meeting held on September 26, 2022, Mr. Rakesh
Mohan vacated the office of Independent Director. Further, at the said Annual General Meeting, Mr. Bhagwan Das Narang
ceased to be the Independent Director of the Company, upon completion of his second term.
7. The Board at its Meeting held on September 28, 2022, appointed Mr. Rajeev Kumar Dalmia, the Chief Financial Officer,
as Whole Time Director of the Company, for the period from September 28, 2022, to September 27, 2024, subject to the
shareholder''s approval.
8. The Board at its Meeting held on December 6, 2022, appointed Mr. Sunil Kumar Gupta, Mr. Madan Mohanlal Verma and
Mr. Gaurav Gupta, as Independent Directors, for the period from December 6, 2022 to December 5, 2027, subject to the
shareholder''s approval.
9. Mr. Rajeev Kumar Dalmia resigned as a Whole Time Director, from the close of business hours of December 6, 2022.
10. The Nomination and Remuneration Committee and the Board at their respective meetings held on December 29, 2022,
appointed Mr. Lalit Behari Singhal as Independent Director of the Company for the period from December 29, 2022, to
December 28, 2027, subject to approval of the Shareholders.
11. Basis on the votes cast by the shareholders at the Extra Ordinary General Meeting held on March 3, 2023, Mr. Sunil Kumar
Gupta, Mr. Gaurav Gupta, Mr. Madan Mohanlal Verma and Mr. Lalit Behari Singhal, vacated the office of Independent Directors.
12. The Board at its meeting held on March 10, 2023, appointed Ms. Zohra Chatterji as Independent Director of the Company
for the period from March 10, 2023, to March 9, 2028, subject to approval of the Shareholders.
13. Ms. Zohra Chatterji, resigned as an Independent Director, from the close of business hours of June 2, 2023.
14. The Board at its meeting held on June 26, 2023, approved the appointment of Mr. Veerender Gupta as Whole Time
Director of the Company for the period from June 26, 2023, to June 25, 2026, subject to approval of the Shareholders.
Subsequent to the closure of financial year, the following were the changes in the Key Managerial Personnel Company:
1. Mr. Anil Kumar Dua, Chief Executive Officer of the Company, vide his letter dated May 23, 2023, tendered his resignation
from the position of Chief Executive Officer of the Company with effect from the close of business hours of August 22, 2023.
2. Upon receipt of approval of MIB dated August 3, 2023, the Board appointed Mr. Manoj Dobhal, as Chief Executive Officer
of the Company, in the category of Key Managerial Personnel, with effect from August 23, 2023.
As on the date of the report, your Board comprised of Three (3) Directors including Two (2) Independent Directors (including
one Independent Woman Director) and one (1) Executive Director.
Jayant Gupta and Associates, Practising Company Secretary, has issued a certificate, pursuant to Regulation 34(3) read with
Schedule V para C clause 10(i) of the SEBI Listing Regulations, confirming that none of the Directors on the Board of the
Company were debarred or disqualified from or continuing as Director on the Board by the Securities and Exchange Board
of India, Ministry of Corporate Affairs or any other Statutory Authority. The said Certificate is attached and forms an integral
part of this Annual Report.
The existing second term of Dr. (Mrs.) Rashmi Aggarwal as an Independent Director is upto the date of the ensuing Annual
General Meeting of the Company in terms of applicable regulatory provisions.
As required under Regulation 36(3) of the SEBI Listing Regulations, particulars of Director seeking appointment at this AGM
are given in the Annexure to the AGM Notice.
As on March 31, 2023, Mr. Anil Kumar Dua, Chief Executive Officer, Mr. Rajeev Kumar Dalmia, Chief Financial Officer and
Mr. Ranjit Singh, Company Secretary and Compliance Officer of the Company, were the Key Managerial Personnels of the
Company.
As on date of this report, Mr. Veerender Gupta, Whole Time Director, Mr. Manoj Dobhal, Chief Executive Officer, Mr. Rajeev
Kumar Dalmia, Chief Financial Officer and Mr. Ranjit Singh, Company Secretary and Compliance Officer of the Company, are
the Key Managerial Personnel''s of the Company, which is in compliance with the requirements of Section 2 (51) and 203 of the
Act read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
In absence of a regular Chairman of the Board, the Board at its respective meeting appoints a Board member as the Chairman
/ Chairperson, for the said meeting.
Adequate diversity on the Board is essential to meet the challenges of business globalisation, rapid deployment of technology,
greater social responsibility, increasing emphasis on corporate governance and enhanced need for risk management. The
Board enables efficient functioning through differences in perspective and skill, and fosters differentiated thought processes
at the back of varied industrial and management expertise, gender, knowledge and geographical backgrounds. The Board
recognises the importance of a diverse composition and has adopted a Board Diversity Policy which sets out its approach to
diversity. The Company recognizes and embraces the importance of a diverse Board in its success.
The meetings of the Board are scheduled at regular intervals to discuss and decide on matters of business performance,
policies, strategies and other matters of significance. The Notice of the meetings and Agenda thereof is circulated in advance,
to ensure proper planning and effective participation. In certain exigencies, decisions of the Board are also accorded through
circulation and also through meeting convened at shorter notice. The Directors of the Company are given the facility to attend
the meetings through video conferencing, in case they so desire, subject to compliance with the specific requirements under
the Act.
The Board met Twenty (20) times during the FY 2022- 23, the details of which are given in the Corporate Governance Report
which forms part of this Annual Report. The intervening gap between any two (2) meetings was within the period prescribed
by the Act and Listing Regulations.
Declaration by Directors/Independent Directors
All Directors of the Company have confirmed that they are not debarred from holding the office of Director by virtue of any
SEBI Order or order of any other such authority. The Directors, Key Managerial Personnel and Senior Management have
affirmed compliance with the Code of Conduct laid down by the Company.
Independent Directors provide declarations, both at the time of appointment as well as annually, confirming that they meet the
criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. Further, in
terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any
circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge
their duties. Based on the declarations received from the Independent Directors, the Board has confirmed that they meet the
criteria of independence as mentioned under Regulation 16(1)(b) of the Listing Regulations and that they are independent of
the management.
A declaration on compliance with Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014,
regarding the requirement relating to enrolment in the Data Bank for Independent Directors, has been received from all the
Independent Directors, along with declaration made under Section 149(6) of the Act.
There are no pecuniary relationships or transactions between the Independent Directors and the Company, other than the
sitting fees paid to the Non- Executive and Independent Directors.
Separate Meeting of the Independent Directors
In accordance with the provisions of Schedule IV to the Act and Regulation 25(3) of the Listing Regulations, during the FY 2022¬
23, separate meetings of the Independent Directors of the Company were held on March 30, 2023, without the attendance of
members of the Management. The Independent Directors reviewed the performance of Directors and the Board as a whole,
and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board,
that is necessary for the Board to effectively and reasonably perform their duties.
In line with the Corporate Governance Guidelines of your Company and in accordance with the criteria laid down by the
Nomination and Remuneration Committee, a formal evaluation of the performance of the Board, its Committees and the
Individual Directors was carried out during the Financial Year 2022-23. The Board evaluation framework has been designed in
compliance with the requirements specified under the Act, the Listing Regulations, and in accordance with the Guidance Note
on Board Evaluation issued by SEBI. The evaluation process was carried out based on an assessment sheet structured in line
with the guidance note issued by ICSI, and SEBI, in this regard.
The Independent Directors of your Company, in a separate meeting, evaluated the performance of the Non-Independent
Directors along with the performance of the Board/Board Committees based on various criteria recommended by the NRC
and ''Guidance Note on Board Evaluation'' issued by the SEBI. A report on such evaluation done by the Independent Directors
was taken on record by the Board and further your Board, in compliance with requirements of the Act, evaluated performance
of all the Directors, Board/Board Committees based on various parameters including attendance, contribution etc. The details
of the evaluation process are set out in the Corporate Governance Report which forms part of this Report.
Policy on Directorsâ appointment and remuneration
In compliance with the requirements of Section 178 of the Act, the Nomination & Remuneration Committee (''NRC'') of your
Board had fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the
Board, age limit, qualification / experience, areas of expertise, skill set and independence of individual. Your Company has
also adopted a Remuneration Policy, salient features whereof is annexed to this report.
Further, pursuant to provisions of the Act, the NRC of your Board has formulated the Nomination and Remuneration Policy
for the appointment and determination of remuneration of the Directors, Key Managerial Personnel, Senior Management
and other Employees of your Company. The NRC has also developed the criteria for determining the qualifications, positive
attributes and independence of Directors and for making payments to Executive Directors of the Company.
The NRC takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration
packages and for administering the long-term incentive plans, such as ESOPs. Further, the compensation package
of the Director, Key Managerial Personnel, Senior Management and other employees are designed based on the set
of principles enumerated in the said policy. Your Directors affirm that the remuneration paid to the Directors, Key
Managerial Personnel, Senior Management and other employees is as per the Nomination and Remuneration Policy of
your Company.
The remuneration details of the Executive Director, Chief Executive Officer, Chief Financial Officer and Company Secretary,
along with details of ratio of remuneration of Director to the median remuneration of employees of the Company for the
Financial Year under review are provided as Annexure to this Report.
Familiarisation Programme for Independent Directors
The Board Familiarisation Programme comprised of sessions on business, functional issues, paradigm of the Industry,
Strategy session, key changes in regulatory framework and industry updates. To familiarize the Directors with strategy,
operations and functions of the Company, the senior managerial personnel make presentations about Industry Update,
Broadcasting sector, challenges and strategy of the business.
The Independent Directors are taken through an induction and familiarisation Programme when they join the Board of your
Company. The induction programme covers the Company''s history, background of the Company and its growth over the last
few years, various milestones in the Company''s existence, the present structure and an overview of the business and functions.
The Board including all Independent Directors are provided with relevant documents, reports and internal policies to enable
them to familiarise with the Company''s procedures and practices from time to time besides regular briefing by the members
of the Senior Management Team.
The details of familiarisation program can be viewed in the Investor section of Company''s website at the link http://dishd2h.
com/corporate-governance/
In compliance with the requirements of the Act, Listing Regulations and smooth functioning of the Company, your Board has
constituted various Committees which includes Audit Committee, Nomination and Remuneration Committee, Stakeholder''s
Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, Corporate Management
Committee and Disciplinary Committee.
As on March 31, 2023, the Audit Committee of the Board comprises of Mr. Shankar Aggarwal, an Independent Director
as Chairman of the Committee, Dr. (Mrs.) Rashmi Aggarwal (Independent Director) and Ms. Zohra Chatterji (Independent
Director), as its members.
During the year under review, the Board re-constituted the Audit Committee at three occasions, all on account of change in
the Board members.
As on the date of this report, the Audit Committee comprises of Mr. Shankar Aggarwal, an Independent Director as the
Chairman of the committee and Dr. (Mrs.) Rashmi Aggarwal (Independent Director) and Mr. Veerender Gupta (Executive
Director), as its members.
Details of the constitution of the other Board Committees, are available on the website of the Company viz. https://www.
dishd2h.com. Details of scope, constitution, terms of reference, number of meetings held during the year under review along
with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.
Vigil Mechanism/Whistle Blower Policy
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of
Directors has formulated a Vigil Mechanism/Whistle Blower policy which provides a robust framework for dealing with genuine
concerns & grievances. The policy provides access to Directors/ Employees/Stakeholders of the Company to report concerns
about unethical behaviour, actual or suspected fraud of any Director and/or Employee of the Company or any violation of the
code of conduct. The policy safeguards whistle blowers from reprisals or victimization, in line with the Regulations. Further
during the year under review, no case was reported under the Vigil Mechanism. In terms of the said policy, no personnel have
been denied access to the Audit Committee of the Board. The said policy is accessible on the website of the Company viz.
www.dishd2h.com.
Directors and Officers (D&O) Liability Insurance
Your Company has taken D&O Insurance for all of its Directors (including Independent Directors) and Members of the Senior
Management, for such quantum and risks as determined by the Board.
Your Company is required to maintain the Cost Records as specified by the Central Government under sub-section (1) of Section
148 of the Act read with applicable notifications thereto. Your board at its meeting held on May 30, 2022, had reappointed
Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, to carry out Audit of Cost Records of the Company
for the Financial Year 2022-23. The Cost Auditors have issued their unqualified report for the Financial Year 2022-23, which
has been taken on record by the Audit Committee / Board of the Company at its meeting held on August 31, 2023.
11. CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of Section 135 of the Act, your Company has a duly constituted Corporate Social
Responsibility (CSR) Committee. As at March 31, 2023, the CSR Committee of Board consists of Mr. Shankar Aggarwal
(Independent Director) as its Chairman, Dr. (Mrs.) Rashmi Aggarwal (Independent Director) and Ms. Zohra Chatterji
(Independent Director), as its members. The Committee has formulated and recommended to the Board, a CSR policy
indicating the activity or activities to be undertaken by the Company as per applicable provisions of Section 135 read with
Schedule VII of the Act and rules made thereto, which policy has been duly approved by the Board. During the period under
review, there was no meeting of CSR committee held, as the Company was not required to spend on CSR activities during the
Financial Year 2022-23 and there were no Ongoing CSR projects of the Company.
A brief outline of the CSR Philosophy, salient features of the CSR Policy of the Company and the report on CSR activities in
the prescribed format, as required by the Companies (Corporate Social Responsibility Policy) Rules, 2014, is appended to this
Board Report.
12. AUDITORS
Statutory Auditors
At the 29th (Twenty Ninth) Annual General Meeting of the Company held on September 28, 2017, upon the recommendation
of the Audit Committee and the Board, Walker Chandiok & Co LLP, Chartered Accountants, New Delhi, the retiring Auditors,
were re-appointed as the Statutory Auditors of the Company for a second term of Five (5) years i.e. to hold office from the
conclusion of the 29th (Twenty Ninth) Annual General Meeting till the conclusion of the 34th (Thirty Fourth) Annual General
Meeting of the Company to be held in the calendar year 2022.
The Board of Directors at their meeting held on August 30, 2022 on the recommendation of the Audit Committee, considered
and approved the appointment of S.N. Dhawan & Co LLP, Chartered Accountants (Firm Registration Number: 000050N /
N500045) as the Statutory Auditors of the Company, to hold office from the conclusion of the 34th (Thirty Fourth) Annual
General Meeting until the conclusion of the 39th (Thirty Ninth) Annual General Meeting of the Company to be held in year 2027.
The said appointment is subject to approval of the shareholders.
Basis the votes cast at the 34th Annual General Meeting held on September 26, 2022, on account of non-approval of appointment of
S.N. Dhawan & Co. LLP, Chartered Accountant as statutory Auditor of the Company, in terms of section 139(10) of the Companies
Act, 2013, Walker Chandiok & Co LLP, the retiring Auditor, continued as Statutory Auditor till the ensuing Annual General Meeting.
There are no qualifications, reservations or adverse remarks made by Walker Chandiok & Co. LLP, Chartered Accountants,
Statutory Auditors, in their report for the financial year ended March 31, 2023.
The Board of Directors at their meeting held on August 31, 2023 on the recommendation of the Audit Committee, considered
and approved the appointment of S.N. Dhawan & Co. LLP, Chartered Accountants (Firm Registration No. 000050N / N500045)
as the Statutory Auditors of the Company, to hold office from the conclusion of the 35th (Thirty Fifth) Annual General Meeting
until the conclusion of the 40th (Fortieth) Annual General Meeting of the Company to be held in year 2028. The said appointment
is subject to approval of the shareholders. S.N. Dhawan & Co. LLP, Chartered Accountants, have given their consent for the
proposed appointment as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting
of the Company. They have further confirmed that the said appointment, if made, would be within the prescribed limits
under Section 141 (3)(g) of the Companies act, 2013 and that hold a valid peer review certificate and are not disqualified for
appointment as the Statutory Auditors of the Company.
During the year, the Board had re-appointed Mr. Jayant Gupta, Practicing Company Secretary, (holding ICSI Certificate of
Practice No. 9738), proprietor of Jayant Gupta & Associates, Practising Company Secretary as the Secretarial Auditor of the
Company for conducting the Secretarial Audit for the FY 2022-23 in accordance with Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 made thereunder. Copy of the Secretarial Audit report
(MR-3) of the Company for the Financial Year 2022-23 is annexed to this report.
Dish Infra Services Private Limited, the unlisted material subsidiary of your company, had appointed Ms. Anjali Yadav,
Practicing Company Secretary, (holding ICSI Certificate of Practice No. 7257), proprietor of Anjali Yadav & Associates, Company
Secretaries, as its Secretarial Auditor to conduct the Secretarial Audit for the FY 2022-23. The said Audit has been conducted
in accordance with Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 made thereunder and in compliance to Regulation 24A of the Listing Regulations. Copy of the Secretarial Audit report
(MR-3) of Dish Infra Services Private Limited for the Financial Year 2022-23 is annexed to this report.
Additionally, in compliance with the requirements of Regulation 24A of Listing Regulations, the Annual Secretarial Compliance
Report issued by Mr. Jayant Gupta, Practicing Company Secretary (holding ICSI Certificate of Practice No. 9738) has been
submitted to the Stock Exchanges within the prescribed timelines. The remarks provided in the report are self-explanatory.
The reports of Statutory Auditor and Secretarial Auditor forms part of this Annual report.
Secretarial Auditorsâ observation(s) in Secretarial Audit Report and Directorsâ explanation thereto:
1. During the audit period, the number of Directors on the Board were less than the minimum number of directors required on
the Board as per Regulation 17(1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBILODRâ) except for the periods May 25, 2022 to June 24, 2022 and December 29, 2022 to March 3, 2023,
when there were six Directors on the Board. As per the SEBI LODR, the Board of Directors of the Listed Entity shall be comprised
of not less than six directors. Accordingly, the composition of the Board of Directors was not as per Regulation 17 of SEBI LODR
throughout the audit period (except for the periods mentioned herein above) till the end of the audit period. The composition of
the Board was not being complied with due to non-approval of the resolutions for the appointment/re-appointment of Directors
by the shareholders of the Company and requirement of having prior approval of the Ministry of Information and Broadcasting
before appointing any Director on the Board of the Company, in terms of the Uplinking Guidelines.
2. During the audit period, there were only two directors on the Board on September 27, 2022 and again from March 4, 2023 to
March 9, 2023, in default of Section 149(1)(a) of the Companies Act, 2013. The said section required that every company shall
have a Board of Directors of a public company to be consisting of minimum number of three directors. However, at the Board
meetings held during the said periods, the Directors only took decisions for induction of new Directors on the Board.
3. During the audit period, the Board Meetings held on September 28, 2022 and March 10, 2023 were attended by only two
directors each, which was default of Regulation 17(2A) of the SEBI LODR. As per the said regulation, the quorum for every
meeting of the board of directors of top 2000 listed entities with effect from April 1, 2020 is one-third of its total strength or three
directors, whichever is higher, including at least one independent director.
4. During the audit period, for the periods September 27, 2022 to December 5, 2022, and from March 4, 2023 to March 9, 2023, the
Nomination and Remuneration Committee of the Board of Directors consisted of only two members instead of minimum three
members required under Section 178 of the Companies Act, 2013 as well as the Regulation 19 of the SEBILODR. The functions
of the Committee were discharged by the Board during this period in default of the applicable provisions.
5. During the audit period, Consequent to the reduction of strength in total number of Board Members below the minimum
required under Section 149 of the Act and /or Regulation 17 of SEBI LODR, the compositions of the committees as required to
be maintained under Regulations 18 to 21 of the SEBI LODR were not as per the respective regulations from time to time, till
new directors were inducted on the Board and the Committees were reconstituted.
6. During the audit period, M/s Walker Chandiok & Co. LLP, Chartered Accountants, New Delhi, the retiring auditors whose second
term as the Statutory Auditors of the Company expired at the conclusion of the 34th Annual General Meeting of the Company held on
September 26, 2022, continued as auditors of the Company till the next AGM in terms of Section 139(10) of the Companies Act, 2013,
as the appointment of M/s S N Dhawan & Co. LLP, Chartered Accountants as statutory auditor in place of the retiring auditors was not
approved by the shareholders of the Company at the Annual General Meeting of the Company held on September 26, 2022.
7. The Financial Statements for the Financial Years 2020-21 and2021-22, the Auditors Reports, Board Reports and their annexures
thereon have not been adopted by the shareholders of the Company at the AGMs held on December 30, 2021 and September
26, 2022 respectively. The Company has filed the provisional financial statements and other documents with the Registrar of
Companies for the years 2020-21 and 2021-22, in compliance with applicable provisions.
The non-compliance in respect of composition of the Board of Directors or Board Committees or non-compliance in respect
of quorum requirements, primarily arose on account of non-approval of the appointment/reappointment of Directors by the
Shareholders of Company from time to time. In addition, the Company was also bound by the Ministry of Information and
Broadcasting (''MIB'') Uplinking Guidelines which prescribed for prior approval of the MIB before appointment of any Director
on the Board. The Board/Nomination and Remuneration Committee in its capacity has always taken requisite and timely steps
to ensure compliance with respect to the minimum number of Directors required on the Board / Committees of the Company.
As mentioned above, the Company is governed by the applicable regulations of the Ministry of Information and Broadcasting
(''MIB''), which is the sectoral regulator of the Company. In terms of the Uplinking Guidelines, the Company is required to seek
prior approval of the MIB before appointing any individual on the Board of the Company.
The Board and the management have always made conscious efforts to comply with all the applicable laws and regulations,
including Listing Regulations, Companies Act and the Up-linking Guidelines of MIB. It is stated that the non-compliance of
certain provisions of Listing Regulations and Companies Act, 2013, which occurred during the period under review occurred
due to circumstances which were beyond the control of the Company. It is also mentioned that the Stock Exchanges viz.
National Stock Exchange of India Limited and BSE Limited, imposed penalty on the Company on account of the above referred
non-compliances. While the Company has paid the penalty in the prescribed timelines, since the said non-compliances were
beyond the control of the Company, Board and the Management, necessary applications were also filed by the Company for
waiver of the said penalties with Stock Exchanges. The details of the above referred non-compliances and steps taken by the
Company to remedial the same are also mentioned in the Corporate Governance report.
In respect of appointment of Statutory Auditors of the Company, it is stated that upon the recommendation of Audit Committee,
the Board recommended the appointment of S. N. Dhawan & Co LLP, Chartered Accountants (Firm Registration Number:
000050N / N500045) as statutory Auditor of the Company from a first term of Five (5) years i.e., to hold the office from
conclusion of 34th AGM till the conclusion of 39th AGM. Basis the Votes cast at the 34th AGM held on September 26, 2022, on
account of non-approval of the appointment of S. N. Dhawan & Co LLP, Chartered Accountants as Statutory Auditors of the
Company, in terms of the Section 139(10) of the Companies Act, 2013, Walker Chandiok & Co LLP (Firm Registration No.
001076N/N-500013), continued to be the Statutory Auditors of the Company upto the 35th AGM.
As regard the non-adoption of the Annual Audited Financial Statements of the Company for the financial year 2020-21, in
terms of applicable provisions, the said Financial Statements were placed before the shareholders at the Annual General
Meeting held on December 30, 2021 (''33rd AGM'') wherein the same was not adopted by the shareholders with requisite
majority. Further, the Annual Audited Financial Statements of the Company for the Financial Year 2020-21 were again placed
before the shareholders at Annual General Meeting held on September 26, 2022 (''34th AGM'') along with the Annual Audited
Financial Statements of the Company for the Financial Year 2021-22, wherein the said Financial Statements for the financial
year 2020-21 and 2021-22 were not adopted by the shareholders with requisite majority.
At the Adjourned 34th Annual General Meeting held on December 29, 2022, Annual Audited Financial Statements of the
Company for the financial year 2020-21 and 2021-22 were again placed before the shareholders and the same were not
adopted by the shareholders with requisite majority.
In compliance with the applicable regulatory provisions, the Company has filed the financial statements for the financial
year ending March 31, 2021, and March 31, 2022, as being provisional financial statements, with the Registrar of Companies
on March 23, 2022, and November 2, 2022, respectively. The Annual Audited Financial Statements of the Company for the
Financial Year 2020-21 and 2021-22 along with reports thereon shall be again placed for consideration and adoption by the
Shareholders at the ensuing Annual General Meeting of the Company, along with the Audited Financial Statements of the
Company for the Financial Year 2022-23 along with reports thereon.
In compliance with the requirements of Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014,
Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, were appointed to carry out Audit of Cost Records
of the Company for the FY 2022-23. The Cost Auditors have issued their unqualified report for the financial year 2022- 23,
which has been taken on record by the Audit Committee and the Board of the Company at their Meeting held on August 31,
2023.
The Board of your Company on the basis of the recommendation of the Audit Committee, at its meeting held on May 12, 2023,
had approved the re-appointment of Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, as the Cost
Auditors for the Financial Year 2023-24.
Requisite proposal seeking ratification of remuneration payable to the Cost Auditor for the FY 2023-24 by the Members as
per Section 148 read with Rule 14 of Companies (Audit and Auditors) Rules, 2014, forms part of the Notice of ensuing Annual
General Meeting.
Protiviti Advisory India Member LLP were the Internal Auditor of the Company for the FY 2022-23. For each of the financial
year, an audit plan is rolled out with approval by the Company''s Audit Committee. The said plan is devised in consultation
with the Statutory Auditor. The plan is aimed at evaluation of the efficacy and adequacy of internal control systems and
compliance thereof, robustness of internal processes, policies and accounting procedures and compliance with laws and
regulations. Based on the reports of internal audit, process owners undertake corrective action in their respective areas.
Audit observations and corrective actions are periodically presented to the audit committee of the Board.
The Audit Committee at its meeting held on May 12, 2023, recommended to the Board the re-appointment of Protiviti Advisory
India Member LLP as the Internal Auditor of the Company for the FY 2023-24. Basis the recommendation of the Audit
Committee, the Board, at its meeting held on May 12, 2023, has re-appointed Protiviti Advisory India Member LLP as the
Internal Auditor of the Company for the FY 2023-24.
Reporting of frauds by Auditors
During the year under review, the Auditors have not reported any instances of frauds committed in the Company by its Officers
or Employees to the Audit Committee under Section 143(12) of the Act.
i. Particulars of Loans, guarantees and investments: Particulars of Loans, guarantees and investments made by the
Company required under Section 186(4) of the Act and the Listing Regulations are contained in Note no. 61 & 62 to the
Standalone Financial Statement.
ii. Transactions with Related Parties: In terms of the applicable statutory provisions, the related party transactions
are placed before the Audit Committee for its approval and statements of all related party transactions are placed
before the Audit Committee for its review on a quarterly and yearly basis, specifying the nature, value and terms
and conditions of the transactions along with arms-length justification. All Related Party Transactions entered
during the year were in Ordinary Course of the Business and on Arm''s Length basis. During the year under review,
there have been no materially significant related party transactions as defined under Section 188 of the Act and
Regulations 23 of the Listing Regulations and accordingly no transactions are required to be reported in Form AOC-2
as per Section 188 of the Act.
iii. Disclosure under Section 197(14) of the Act: During the financial year 2022-23, none of the Executive Directors of the
Company received any remuneration or commission from its holding or subsidiary company.
iv. Secretarial Standards: Pursuant to the provisions of Section 118 of the Act, the Company has complied with the applicable
provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India.
v. Risk Management: Your Company follows a comprehensive system of Risk Management. It has adopted a policy and
procedure for rapid identification, definition of risk mitigation plans and execution. Actions include adjustments in prices,
dispatch plan, inventory build-up, and active participation in regulatory mechanisms. Many of these risks can be foreseen
through systematic tracking. Your Company has also defined operational processes to ensure that risks are identified
and the operating management are responsible for identifying and implementing mitigation plans for operational and
process risk. Key strategic and business risks are identified and managed by senior management team. The Risks and
their mitigation plans are updated and reviewed periodically by the Audit Committee and integrated in the Business
plan for each year. The details of Constitution, scope and meetings of the Risk Management Committee forms part of
the Corporate Governance Report. In the opinion of the Board there are no risks that may threaten the existence of the
Company.
vi. Internal Financial Controls and their adequacy: Your company has an effective internal control and risk mitigation
system, which is constantly assessed and strengthened with standard operating procedures and which ensures that all
the assets of the Company are safeguarded & protected against any loss, prevention and detection of frauds and errors,
ensuring accuracy and completeness of the accounting records, timely preparation of reliable financial information
and that all transactions are properly authorized and recorded. The Company has laid down procedures to inform
audit committee and board about the risk assessment and mitigation procedures, to ensure that the management
controls risk through means of a properly defined framework. The Audit Committee evaluates the internal financial
control system periodically and deals with accounting matters, financial reporting and periodically reviews the Risk
Management Process.
vii. Deposits: Your Company has not accepted any public deposit under Chapter V of the Act.
viii. Transfer to Investor Education and Protection Fund: During the year under review, the Company was not required to
transfer any amount to Investor Education and Protection Fund.
ix. Unclaimed Dividend/Shares: As on March 31,2023, 61,322 (Sixty one thousand three hundred and Twenty two) Unclaimed
Equity Shares of the Company are lying in the Demat Account of the Company. Necessary steps were taken in Compliance
with the Listing Regulations, for sending the necessary reminders to the claimant of the said shares, at the address
available in the data base of the Depository/Company.
Further, the Interim Dividend declared by the Company which remains unpaid or unclaimed, has been transferred by
the Company to "Dish TV India Limited - unpaid Interim Dividend FY 2018-19â account and will be due for transfer to the
Investor Education and Protection Fund on completion of seven (7) years.
x. Transfer to General Reserve: During the FY under review, no amount has been transferred to the General Reserve of the
Company.
xi. Extract of Annual Return: The Annual return in form MGT-7 as required under Section 92 of the Act read with Companies
(Management & Administration) Rules, 2014, is provided on the website of the Company at https://www. dishd2h.com/.
xii. Sexual Harassment: The Company has zero tolerance for Sexual Harassment at workplace. The company has complied
with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted Internal Complaint(s) Committee
functioning at various locations to redress complaints regarding sexual harassment and has adopted a Policy on prevention
of Sexual Harassment in line with the provisions of ''The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013''. During the year under review, no complaint was received by the Company.
xiii. Regulatory Orders: During the financial year 2020-21, Securities and Exchange Board of India (''SEBI'') issued show cause
notice dated September 11, 2020 to the Company under Rule 4 of SEBI (Procedure for holding inquiry and imposing
penalties) Rules 1995, on account of violation under SEBI (Prohibition of Insider Trading) Regulations, 2015 with regard
to delayed filing of disclosures with Stock Exchanges under Regulation 7(2) (b) relating to dealings in the securities of
the Company by its Promoter(s) viz. Direct Media Distribution Ventures Private Limited and World Crest Advisors LLP.
In order to settle the proceedings initiated, without admitting or denying the findings of fact and conclusions of law, the
Company filed settlement application with SEBI on October 7, 2020. SEBI vide its order dated February 17, 2021, approved
settlement upon payment of Rs. 8,20,782/-. The Company deposited the said amount within the prescribed timeline and
accordingly, the matter is settled.
During the financial year 2021-22, SEBI passed an Ad-Interim ex-parte Order cum Show Cause Notice (''SEBI Order'')
bearing no. WTM/SM/CFD/CMD-1/15312/2021-22 dated March 7, 2022 under Sections 11(1), 11(4) and 11B(1) of Securities
and Exchange Board of India Act, 1992, to the Company, its Directors and Company Secretary & Compliance Officer, in
relation to non-disclosure of voting results on various proposals put forth in the Company''s 33rd Annual General Meeting
held on December 30, 2021. In order to comply with the SEBI Order, the Company, without prejudice to its rights and
contentions, disclosed the voting results on March 8, 2022.
In respect of the SEBI Order, the Company along with its then Directors namely - Mr. Jawahar Lal Goel, Mr. Ashok Mathai
Kurien, Mr. Anil Kumar Dua and the Company Secretary & Compliance Officer namely Mr. Ranjit Singh, filed Settlement
application with SEBI, for which settlement order dated October 12, 2022, was received by the Company along with below
mentioned settlement amount:
1. Rs. 45,54,000/- (Rupees Forty Five Lakh Fifty Four Thousand only) for Dish TV India Ltd. and Mr. Ranjit Singh on the
basis of joint and several liability.
2. Rs. 19,80,000/- (Rupees Nineteen Lakh Eighty Thousand only) for Mr. Jawahar Lal Goel, Mr. Anil Kumar Dua and
Mr. Ashok Mathai Kurien on the basis of joint and several liability.
The above Settlement amounts were duly paid within the prescribed timeline and accordingly, the matter was settled in
respect of Mr. Jawahar Lal Goel, Mr. Ashok Mathai Kurien, Mr. Anil Kumar Dua and Mr. Ranjit Singh.
The Independent Directors namely - Mr. Bhagwan Das Narang, Dr. (Mrs.) Rashmi Aggarwal and Mr. Shankar Aggarwal
had filed a response to the said SEBI Order. Post adjudication, SEBI vide its Final Order dated July 14, 2022, in respect
of Independent Directors of the Company, has held that no omission to exercise due diligence can be attributed to the
independent directors in the facts and circumstances of the case, and accordingly has disposed the proceedings initiated
by the Show Cause Notice, against the Independent Directors without any further directions.
During the Financial Year 2022-23, the Company had filed a compounding application with the Reserve Bank of India
relating to the contravention of provisions of Regulation 15 of Foreign Exchange Management (Transfer or Issue of any
Foreign Security) Regulations, 2004, in relation to delayed/non-repatriation of dues in the form of loan and interest
receivable from its overseas joint venture viz. Dish T V Lanka (Private) Limited.
In this regard, the Reserve Bank of India vide its order dated July 27, 2023, agreed to compound the contravention upon
payment of Rs. 50,14,407/- (Rupees Fifty Lacs Fourteen Thousand Four Hundred and Seven Only) by the Company. The
Company has duly paid the said amount on August 9, 2023, which has acknowledged by RBI vide their certificate of
payment dated August 17, 2023, and accordingly the matter is settled.
14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
Your Company is in the business of providing Direct to-Home (''DTH'') services. Since the said activity does not involve any
manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Act read with the
Companies (Accounts) Rules, 2014, are not applicable. However, the information, as applicable is given hereunder:
Your Company, being a service provider, requires minimal energy consumption and every endeavor made to ensure optimal
use of energy, avoid wastages and conserve energy as far as possible.
In its endeavor to deliver the best to its viewers and business partners, your Company is constantly active in harnessing and
tapping the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
During the year under review, your Company had foreign exchange earnings of '' 377 Lakhs and outgo of '' 1,084 Lakhs.
Acuite Rating and Research, a Credit rating agency vide its communication dated January 4, 2022, had assigned ACUITE BB
(Rating Watch with negative implication) for long term bank facilities of the Company. Acuite had downgraded the rating of DTIL
considering the decline in business performance of DTIL Group, lack of clarity on change in management and contingency of
disputed license fees liabilities materialising.
CARE (Credit Analysis and Research Limited), a Credit rating agency vide its communication dated October 1, 2021, assigned
CARE A4 (RWN) for short Term Loans of the Company. Instruments with this rating are considered to have minimal degree
of safety regarding timely payment of financial obligations. Such instruments carry very high credit risk and are susceptible
to default.
Human Resource Management has been one of the key priorities for your company. While harmonizing people practices,
the strategic approach had been to adopt best aspects, align to the market-best practices and build a future ready
organization.
The Company believes that the key to excellent business results is a committed talent pool. Human resources are the most
critical element responsible for growth and the Company acknowledges their contribution and works towards their satisfaction
as a top priority. The HR policies continually strive towards attracting, retaining, and developing the best talent required for the
business to grow. Regular trainings are conducted for the employees to ensure skill upgradation and personal development
throughout the various organizational levels.
Dish TV values its talent pool and works hard to retain its best talent by providing ample opportunities to grow. The Company
focuses on providing opportunity for the development and enhancing the skill sets of its employees at all levels of the business.
Several workshops have been conducted for employees across the country, so they understand and exhibit the values of the
Company in their work and behavior. Continuous training program for upgradation of skill and behavioural maturity has been
imparted which helped in keeping the optimization and moral of the Organisation at a higher level despite Pandemic situation
prevailing all across. Town hall sessions were conducted for better interactivity, understanding issues faced by the employees
and providing solutions. Work from Home facility continues seamlessly across the hierarchy of employees and acting as
enabler to lessen the adverse impact of pandemic.
Your Directors place on record their appreciation for the significant contribution made by all employees, who through
their competence, dedication, hard work, co-operation and support have enabled the Company to cross milestones on a
continual basis.
As on March 31, 2023, the total numbers of permanent employees on the records of the Company were 392. The information
required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, along with statement showing names and other particulars of the employees drawing remuneration
in excess of the limits prescribed under the said rules is annexed to this report.
17. DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 134 of the Act, in relation to the Annual Financial Statements for the FY 2022-23, your
Directors state and confirm that:
a) The Financial Statements of the Company comprising of the Balance Sheet as at March 31, 2023 and the Statement of
Profit & Loss for the year ended on that date, have been prepared on a going concern basis;
b) In the preparation of these Financial Statements, the applicable accounting standards have been followed and there are
no material departures;
c) Accounting policies selected were applied consistently and the judgments and estimates related to the financial
statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2023, and, of the losses of the Company for the year ended on that date;
d) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions
of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;
e) Requisite internal financial controls are laid down and that such financial controls are adequate and operating
effectively; and
f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are
adequate and operating effectively.
18. BUSINESS RESPONSIBILITY REPORT & MANAGEMENT DISCUSSION AND ANALYSIS
Regulation 34 of SEBI Listing Regulations requires the Company to annex a Business Responsibility and Sustainability Report
describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified
by the Board from time to time. The Business Responsibility and Sustainability Report (''BRSR'') has been prepared and forms
part of the Annual Report as an Annexure.
The Management Discussion and Analysis report is separately attached hereto and forms an integral part of this Annual
Report. The said report gives details of the overall industry structure, economic developments, performance and state of
affairs of your Company''s business and other material developments during the FY under review.
19. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER IBC, IF ANY
No such application under IBC has been filed or pending against the Company, during the year under review.
20. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND
WHILE TAKING LOAN, ALONG WITH THE REASONS THEREOF:
There has been neither any delay / default in repayment obligation towards financial institutions nor the Company has entered
into any One-time settlement with any financial institution, during the year under review.
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting
efforts of the employees have enabled the Company to remain competitive and relevant in the industry. The Company also has
taken various steps not only to improve the productivity across the organization but also has ventured into new and innovative
products.
Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company''s
objectives, projections, estimates and expectations, may constitute ''forward looking statements'' within the meaning of
applicable laws and regulations and actual results might differ.
It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future.
Your Directors value the professionalism and commitment of all employees of the Company and place on record their
appreciation of the contribution made by employees of the Company and its subsidiaries at all levels that has contributed to
your Company''s success. Your Directors acknowledge with sincere gratitude the co-operation and support extended by the
Central and State Governments, the Ministry of Information and Broadcasting (MIB''), the Department of Telecommunication
(''DOT''), Ministry of Finance, the Telecom Regulatory Authority of India (''TRAI''), the Stock Exchanges and other stakeholders
including employees, subscribers, vendors, bankers, investors, service providers/partners as well as other regulatory and
government authorities.
Your Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from
its valued stakeholders.
For and on behalf of the Board
Shankar Aggarwal Rashmi Aggarwal
Independent Director Independent Director
DIN:02116442 DIN:07181938
Place: Noida
Date: August 31, 2023
Mar 31, 2018
To the Members,
The Directors are pleased to present the 30th (thirtieth) Annual Report of your Company covering the business and operations of the Company and the Annual Audited Financial Statements for the Financial Year ended March 31, 2018, prepared as per Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013.
1. FINANCIAL RESULTS
The Financial Performance of your Company for the Financial Year ended March 31, 2018 is summarized below:
(Rs. In Lacs)
|
Standalone - Year Ended |
Consolidated - Year Ended |
|||
|
Particulars |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
|
Sales & Services |
286,260 |
194,539 |
463,416 |
301,438 |
|
Other Income |
6,132 |
6948 |
5,416 |
6,150 |
|
Total Income |
292,392 |
201,487 |
468,832 |
307,588 |
|
Total Expenses |
306,585 |
175,694 |
478,623 |
296,639 |
|
Profit/(Loss) before Tax & Prior Period Item |
(14,193) |
25,793 |
(9,791) |
10,949 |
|
Prior Period Item |
- |
- |
- |
- |
|
Profit/(Loss) before Tax |
(14,193) |
25,793 |
(9,791) |
10,949 |
|
Profit from continuing operations before tax |
(14,193) |
25,793 |
(9,791) |
10,949 |
|
Profit/(loss) from discontinued operations before tax |
18,986 |
- |
- |
- |
|
- Current tax Continuing operation |
(196) |
8,529 |
225 |
9,816 |
|
- Deferred tax-Continuing operation |
(8,785) |
475 |
(1,526) |
(7,079) |
|
- Deferred tax-Discontinued operation |
10,440 |
- |
- |
- |
|
Profit from continuing operations after tax |
(5,212) |
16,789 |
(8,490) |
8,212 |
|
Profit/(loss) from discontinued operations after tax |
8,546 |
- |
- |
- |
|
Profit/(Loss) after Tax |
3,334 |
16,789 |
(8,490) |
8,212 |
|
Profit/(Loss) for the Year |
3,334 |
16,789 |
(8,490) |
8,212 |
|
Add: Balance brought forward |
(139,328) |
(156,140) |
(126,776) |
(136,051) |
|
Adjustment for Non-controlling interest |
- |
- |
986 |
994 |
|
Adjustment for depreciation |
- |
- |
- |
- |
|
Transferred from securities premium (capital reduction) |
154,340 |
- |
154,340 |
- |
|
Add: Remeasurement of post employment benefits |
81 |
23 |
173 |
69 |
|
Amount available for appropriations |
18,427 |
(139,328) |
20,233 |
(126,776) |
|
Balance Carried Forward |
18,427 |
(139,328) |
20,233 |
(126,776) |
There have been no material changes and commitments that have occurred after close of the financial year till the date of this report which affects the financial position of the Company. During the year under review, the Company concluded the Scheme of Arrangement amongst Videocon D2H Limited and Dish TV India Limited and their respective shareholders and creditors in terms of the Order of the Honâble National Company Law Tribunal, Mumbai Bench dated July 27, 2017, which has been dealt in this report.
Based on internal financial control framework and compliance systems established in the Company and verified by the statutory and internal auditors and reviews performed by the management and / or the Audit Committee of the Board, your Board is of the opinion that Companyâs internal financial controls were adequate and effective during the financial year 2017-18.
2. DIVIDEND
With a view to conserve the resources for future business requirements and expansion plans, your Board is of the view that the current yearâs profit be ploughed back into the operations and hence no dividend is recommended for the year under review.
The Board of your Company has approved the Dividend Distribution Policy of the Company in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) as applicable to the top 500 Listed Companies. The said Policy of the Company sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is available on the website of the Company viz. http://www.dishd2h.com/ corporate-governance/
3. BUSINESS OVERVIEW
The global growth has eased but remains robust, and is projected to reach 3.1% in 2018. The International Monetary Fund (IMF) projects that advanced economies, as a group, will continue to swell above their potential growth rates this year and the next, before decelerating, while growth in emerging markets and developing economies will rise before levelling off.
Indiaâs economy, which bottomed out due to the deceleration caused by one-time policy events, is now expected to re-emerge as the fastest growing one in Asia and clock a 7.3% rise in GDP in the current fiscal, and further accelerate to 7.6% in FY 19-20. The implementation of Goods and Services Tax (GST) encountered transitory headwinds and hampered the gross domestic output, resulting in GDP growth of 6.7% as compared to 7.1% in FY 16-17.
During FY 2017-18, Dish TV India Limited achieved yet another milestone by completing Amalgamation with Videocon D2H Limited on March 22, 2018 to become Indiaâs largest DTH operator, in terms of subscriber base.
In the year under review, your Company continued to make profits to the tune of Rs.3,334 lacs. This was achieved with a sustained focus on the customer satisfaction, providing good pack mix, and having all the relevant channels available to the subscribers. Introducing innovative packaging and making Hi-Definition (HD) more affordable were the key initiatives which ensured growth in gross subscribers. Customer service and satisfaction continues to be the focal area for your Company. With growing disposable income, growth and improvements in technology, our customersâ viewing devices also keep on improving and hence, their needs and expectations continue to evolve. At the other end of the spectrum, new customers are coming in with the digitization drive. We will continue to empower our customers and transform their entertainment needs with the power of digitization, offering more channels, On Demand Services and Interactive Television Services.
HD grew with digitisation, on the back of increased sale of large television screens wherein the viewing experience requires higher quality content. HD audience contributes to higher revenues due to the premium pricing that such channels command. The HD subscriber base of the Company is at approx 3.5 million as of March 31, 2018, which is 15% of the total subscriber base of the Company.
Customers are adopting the âdigitalâ offering in every aspect of a transaction life cycle, from initiation to culmination including researching for a product/service, buying the product/service, availing post-sales service and also providing feedback and reviews, all online on company websites/e-commerce websites/social media and others. Dish TV is trying to reach these âdigitalâ customer touch points strategically at every point of transaction.
We strongly believe that technology will be the game changer going forward for our industry and we are all geared up to adapt technological advancements and stay ahead of the curve. The Company is investing in the upgrade of technology to be ahead of market players and achieve a balanced customer base.
The Company has strategic plans to attract digital and tactical digital consumers. The Company is planning to launch its own OTT platform and hybrid set-top boxes (pay TV pay OTT) to cater to this new segment. Though the segment is at quite a nascent stage, the Company plans to enter the potential market early on to exploit its large subscriber base. The Company will be targeting households with existing internet connections to build up on the existing infrastructure.
This year will also be about giving more power in the hands of the customer. Greater value will be provided with the introduction of benefits on long term recharges. This would be a win-win situation for both subscriber and Company with the former saving money and the latter improving retention. Finding means for maximizing value for the customer will always be the never ending quest which drives each and every employee of the Company.
The Ministry of Information and Broadcasting, Government of India (MIB) vide its letter dated July 27, 2018 has granted an interim extension to the DTH License of the Company upto December 31, 2018 or till the date of notification of âNew DTH Guidelinesâ, whichever is earlier.
4. SCHEME OF ARRANGEMENT AMONG VIDEOCON D2H LIMITED (âTRANSFEROR COMPANYâ) AND DISH TV INDIA LIMITED (âTRANSFEREE COMPANYâ) AND THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS
The Year under review was a landmark year for Dish TV with the completion of Amalgamation of Videocon D2H Limited with and into Company, which became effective on March 22, 2018, with October 1, 2017 being the appointed date.
The Board of your Company and the Board of Videocon D2H Limited, at their respective meetings held on November 11, 2016, approved the Scheme of Arrangement amongst Videocon D2H Limited and Dish TV India Limited and their respective shareholders and creditors (âSchemeâ), for amalgamation of Videocon D2H Limited into and with Dish TV India Limited. The Scheme was made with a view to reduce operational costs, increase operational efficiencies and enable optimal utilization of various resources as a result of pooling of financial, managerial and technical resources, and technologies of both the Companies.
The National Stock Exchange of India Limited and BSE Limited provided their âNo Objectionâ to the said Scheme on March 1, 2017 and March 2, 2017 respectively.
Further, the Board of Directors of both the Companies, in order to provide greater flexibility to the Scheme, at its meeting held on May 24, 2017 approved the proposal to amend the scheme by amending the clause 5.8.5 of the scheme. Pursuant to the said amendment, the GDRs to be issued by the Company pursuant to the Amalgamation can be listed on âLuxembourg Stock Exchange or London Stock Exchange or any Other Stock Exchangeâ. The said amendment was placed before the Honâble National Company Law Tribunal, Mumbai Bench (âNCLTâ) on June 7, 2017 for approval. During the hearing before the Tribunal, the said amendment was changed to âLuxembourg Stock Exchange or London Stock Exchangeâ.
The proposed Amalgamation had also been notified to the Competition Commission of India (CCI) for its approval and CCI had given its approval for the proposed transaction vide its letter dated May 4, 2017. On May 12, 2017, in a meeting convened by the National Company Law Tribunal (NCLT), the Equity Shareholders of the Company had also approved the Scheme for amalgamation of Videocon D2H Limited into Dish TV India Limited. Subsequently, the Mumbai Bench of the Honâble NCLT, at its hearing held on July 27, 2017, approved the Scheme under the provisions of Sections 230 -232 and other applicable provisions of the Companies Act, 2013. The Appointed date for the Scheme was therein fixed as October 1, 2017. Further, the Ministry of Information and Broadcasting (âMIBâ), the nodal Ministry vide its order dated December 15, 2017 approved the aforesaid Amalgamation, paving way for the creation of the largest listed media company in India taking into consideration the last reported revenue and EBITDA numbers of the two DTH players on a pro-forma basis. Dish TV India Limited and Videocon D2H Limited reported separate revenue and EBITDA numbers which at a pro-forma level add up to Rs.60,862 million and Rs.19,909 million for FY 2017-18
Taking further steps for giving effect to the Scheme of Arrangement for Amalgamation of Videocon D2H Limited into and with Dish TV India Limited, the Companies (Videocon D2H Limited and Dish TV India Limited), on March 22, 2018, filed the Copy of the order dated July 27, 2017 passed by the Honâble National Company Law Tribunal (NCLT) along with the Approved Scheme with the Registrar of Companies, Mumbai, Maharashtra. Accordingly, upon completion of all the steps pursuant to the aforementioned Scheme read with the NCLT Order, Videocon D2H Limited has Amalgamated into and with Dish TV India Limited on March 22, 2018, which is the Effective date of the Scheme.
In compliance of order passed by Honâble National Company Law Tribunal dated July 27, 2017, your Board at its meeting held on issued 857,785,642 fully paid up equity Shares of the Company of Rs.1/-(one each), as a consideration to the eligible equity shareholders of Videocon D2H Limited. Further, out of the issue of 857,785,642 fully paid equity shares, the Board has allotted 775,256,159 fully paid equity Shares of Rs.1/- on March 26, 2018 and kept the allotment of 82,529,483 equity shares in abeyance, owing to certain counter claim received by the Company.
Post the allotment of the Shares, the Company had filed necessary Application with the Stock exchange(s) for listing of the above-mentioned equity shares allotted pursuant to Scheme. BSE Limited (âBSEâ) & National Stock Exchange of India Limited (âNSEâ) vide their respective letters dated April 5, 2018 and April 6, 2018 granted in-principal approval for listing of the aforesaid shares. Post credit of shares in electronic mode, the trading approval in respect of the above mentioned shares was received by the Company on April 10, 2018. The equity shares so allotted are presently listed on NSE and BSE in India.
In terms of the Scheme, the ADS holders of Videocon D2H Limited had option to elect and to either receive the shares of Dish TV India Limited or the GDR to be issued by Dish TV India Limited. Accordingly, the ADS holders of Videocon D2H Limited were issued Global Depositary Receipts (the âGDRsââ) of Company. The effective date of issuance of GDRs was April 12, 2018, and the same were listed on the Professional Securities Market (âPSMâ) of the London Stock Exchange on April 13, 2018.
Post receipt of all necessary approval(s) and in compliance of order passed by Honâble National Company Law Tribunal (âNCLTâ) dated July 27, 2017 for Amalgamation of Videocon D2H Limited into and with the Company, the Board at its meeting held on March 26, 2018, approved the issuance of 277,095,615 Global Depositary Receipts (the âGDRsâ) to the holders of American Depositary Shares (âADSsâ) of Videocon D2H Limited (each GDR representing one equity share of the Company, exchanged at a rate of approximately 8.07331699 new GDRs for every one Videocon D2H Limited ADS (rounded off up to eight decimal places). The underlying shares against each of the GDRâs were issued in the name of the Depository viz. Deutsche Bank Trust Company Americas.
This Amalgamation paved the way for the creation of the largest listed media company in India having 23 million subscribers and with 37% market share in the DTH segment. The Amalgamation has come at a pertinent time with consumer spending picking up, almost one and a half years post the announcement of demonetization. A new era in fact has begun for both, the Indian economy and Dish TV India Limited as they both gear up to drive the consumers increasing propensity to consume.
The combined entity is expected to provide better synergies and growth opportunities through deeper after-sales, through Company managed centers, distribution and technology capabilities and will also become a more effective partner for TV content providers in India. The Amalgamated Companyâs subscriber base is a fair mix of urban, semi-urban and rural subscribers that would enable it to benefit from increased discretionary spending across categories. A healthier urban mix would be beneficial to the revenue pool while at the same time a stable, paying, rural base would help buffer the platform from alternate technologies.
Three well recognized and powerful brands -âdishtv, âd2hâ and âZingâ are now being marketed under the Dish TV India Limited umbrella with each being favourably positioned in its key target markets. While dishtv has always had a high top-of-the-mind consumer brand recall, d2h has had the advantage of having high brand loyalty in trade circles. Zing on the other hand has been the undisputed leader when it comes to having tailor-made packages for regional audiences. Identifying the strengths of each brand, the Company has been targeting profitable growth while maintaining healthy competition and encouraging synergy in backend operations.
5. CAPITAL REDUCTION - REDUCTION OF SECURITIES PREMIUM ACCOUNT FOR WRITING OFF THE DEFICIT IN THE STATEMENT OF PROFIT & LOSS ACCOUNT
The Board of Directors of your Company at its meeting held on May 23, 2016, approved the arrangement for reduction of the Securities Premium Account of the Company for writing off the deficit in the statement of Profit and Loss Account. The reduction in share capital (securities premium account) does not prejudicially affect the Company or its Shareholders and does not in any way adversely affect the ordinary operations of the Company or the ability of the Company to honor its commitments that may arise in the ordinary course of business.
Upon receipt of No objection(s) of the Stock Exchanges (NSE & BSE) to the said reduction and approval of Shareholdersâ of the Company vide Special Resolution dated September 19, 2016, the Company had filed necessary application with Honâble National Company Law Tribunal, Mumbai Bench (NCLT) for approval of the said Capital Reduction proposal. The Honâble NCLT, vide its Order dated June 28, 2017, had approved the said reduction of share capital of the Company by way of utilizing the amount standing to the credit of the Securities Premium Account for writing off deficit in the statement of Profit and Loss account of the Company.
Accordingly, the entire Securities Premium account amounting to Rs.15,43,39,65,550 (Rupees One Thousand Five Hundred Forty Three Crores Thirty Nine Lakhs Sixty Five Thousand Five Hundred and Fifty Only) as on March 31, 2016, stands reduced for writing off deficit in the statement of Profit and Loss Account of the Company. Post receipt of the said Order, necessary filings were made with the Stock Exchange(s) and Registrar of Companies. Necessary entries in the books of Accounts of the Company were made during the year under review.
6. SUBSIDIARIES AND ASSOCIATE COMPANIES
As on March 31, 2018 your Company had 1 (One) Wholly Owned Subsidiary, 1 (One) Joint Venture and 1 (One) Associate Company.
Subsidiary in Sri Lanka:
Your Company, upon the approval of Board of Directors, incorporated a Joint Venture (âJVâ) Company with Satnet (Private) Limited, a Company incorporated under the Laws of Sri Lanka, in the name and style of âDish T V Lanka (Private) Limitedâ for providing Direct to Home Services in Sri Lanka, on April 25, 2012 with a paid up share capital of 1 million Sri Lankan Rupees. Your Company holds 70% of the paid-up share capital and Satnet (Private) Limited holds 30% of the paid-up share capital in Dish T V Lanka (Private) Limited. Dish T V Lanka (Private) Limited operates under the requisite licenses and permissions obtained from regulatory authorities. The Company has also been registered as a Board of Investment (âBOIâ) approved Company in Sri Lanka. The registration with BOI grants various benefits to the Company.
Subsidiary in India:
Your Company, upon the approval of Board of Directors and the Members of the Company, acquired the entire share capital of Xingmedia Distribution Private Limited (âXingmediaâ) on March 24, 2014. Upon requisite approvals, the name of Xingmedia has been changed to âDish Infra Services Private Limitedâ (âDish Infraâ).
Post approval of Members of the Company by way of Special Resolution passed by Postal Ballot on February 3, 2015, the non-core business of the Company (undertaking pertaining to the provision of infra support services to the subscribers for facilitating the DTH services including the instruments which are required for receiving DTH signals such as set top boxes(STB), dish antenna, Low Noise Boxes (LNB) and other customer related services including call centre services and repairs) has been transferred to Dish Infra with effect from April 1, 2015.
Further, during the Financial Year 2017-18, with a view to harmonize the existing business model of the Company, consequent to Amalgamation, approval of the members of the Company was sought by way of Special Resolution for transferring the Non-Core Business undertaking of Infra Support Services (including set top boxes, dish antenna etc., and related services) to be acquired from Videocon D2H Limited to Dish Infra Services Private Limited, on a going concern basis. The Shareholders approved the said Special Resolution with requisite majority on September 27, 2017.
In compliance with the provision(s) of Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your board had appointed Mr. Lakshmi Chand, an Independent Director of the Company as an Independent Director on the Board of Dish Infra Services Private Limited. Upon Resignation of Mr. Chand with effect from August 17, 2018, your board, upon nomination by the Company appointed Dr. (Mrs.) Rashmi Aggarwal as an Independent Director on the Board of Dish Infra (Companyâs material non-listed Indian Subsidiary).
Associate Company in India:
Your Company, upon the approval of Board of Directors incorporated an Associate Company in the name and style of âC&S Medianet Private Limitedâ on May 5, 2016. C&S Medianet Private Limitedâs initial paid up capital is Rs.100,000. Your Company holds 48% of the initial capital and Siti Networks Limited also hold 48% of the initial capital. The said Company acts as a knowledge center for the distribution industry whereby assisting them in various business facets including packaging, content acquisition, regulatory interaction etc. The said Company has commenced its operations during the year under review.
Your Company upon approval of the Board has changed the nomination on the Board of C&S Medianet Private Limited and appointed Mr. Ravi Bhushan Puri (DIN: 06686381) as the Nominee Director in place of Mr. Mukesh Mittal.
Apart from the above, no other Subsidiary / Joint-venture/Associate was formed or divested during the financial year 2017-18.
Audited Accounts of Subsidiary Companies:
Your Company has prepared the Audited Consolidated Financial Statements in accordance with Section 129(3) of the Companies Act, 2013 read with applicable Accounting Standards and Listing Regulations, 2015. The statement pursuant to Section 129(3) of Companies Act, 2013 and Rule 5 of Companies (Accounts) Rules, 2014, highlighting the summary of the financial performance of the subsidiaries is annexed to this Report.
As required under the Indian Accounting Standard, issued by the Institute of Chartered Accountants of India (â IC AIâ) and applicable provisions of the
Listing Regulations, the Audited Consolidated Financial Statements of the Company reflecting the Consolidation of the Accounts of its subsidiaries are included in this Annual Report. Further, a statement containing the salient features of the financial statements of the subsidiaries and associate in the prescribed format AOC-1 is appended to this report.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of subsidiaries are available on the website of the Company viz. http://www. dishd2h.com. These documents will also be available for inspection during business hours at the Registered Office of the Company.
Your Company has a policy for determining Material Subsidiaries in place. As on March 31, 2018, the Company has only one Material Subsidiary viz. Dish Infra Services Private Limited. The Policy for determining Material Subsidiaries is available on the Companyâs website viz. http://www.dishd2h. com and is accessible at http://www.dishd2h.com/ media/1324/policyonmaterialsubsidiary.pdf
7. CAPITAL STRUCTURE
During the year under review, your Company:
- Consequent to receipt of necessary approval and in compliance of order passed by H onâ ble National Company Law Tribunal, Mumbai Bench, dated July 27, 2017 for Amalgamation of Videocon D2H Limited into and with the Company, the Board, on March 26, 2018 issued 857,785,642 fully paid up equity Shares of the Company of Re. 1/-(one each), as a consideration to the eligible equity shareholders of Videocon D2H Limited. Further, out of the issue of 857,785,642 fully paid equity shares, the Board has allotted 775,256,159 fully paid equity Shares of Re.1/-on March 26, 2018 and kept the allotment of 82,529,483 equity shares in abeyance, owing to certain counter claim received by the Company.
- Issued and allotted 45,370 fully paid equity shares, upon exercise of Stock Option by the eligible Employees of the Company, pursuant to the Employee Stock Option Scheme â 2007 (âESOP - 2007â) of the Company and these shares were duly admitted for trading on both the stock exchanges viz. NSE and BSE.
- Upon receipt of valid second call money from the concerned shareholders in respect of Rights Issue, the Company converted 695 equity shares from Rs.0.75 each paid up to Rs.1 each fully paid up. The Company had come up with Right Issue in Financial Year 2008-09 for 518,149,592 equity shares of Rs.1 each, issued at Rs.22 per share (including premium of Rs.21 per share), payable in three installments.
Pursuant to the issue and allotment of equity shares under ESOP scheme, allotment of shares pursuant to Scheme and conversion of partly paid equity shares, the paid up share capital of your Company during the year has increased from:
- Rs.1,06,59,55,532 (comprising of 1,06,59,34,528 fully paid up equity shares ofRs.1 each, 15,262 equity shares of Rs.1 each, paid up Rs.0.75 per equity share & 19,115 equity shares of Rs.1 each, paid up Rs.0.50 per equity share] to
- Rs.1,84,12,57,234.75(comprising of 1,841,236,752 fully paid up equity shares of Rs.1 each, 14,567 equity shares of Rs.1 each, paid up Rs.0.75 per equity share & 19,115 equity shares ofRs.1 each, paid up Rs.0.50 per equity share)
Further, during the year under review, consequent to Amalgamation, the Authorised Share Capital of erstwhile Videocon D2H Limited amounting to Rs.5,000,000,000/- (Rupees Five hundred Crore) stood merged and consolidated with the Authorised Share Capital of the Company and consequently the Authorised Share Capital of the Company increased from Rs.1,500,000,000/- (Rupee One Hundred and Fifty Crores), divided into 1,500,000,000 (Rupees One Hundred and fifty Crores) Equity shares of Rs.1 (Rupee one) each to Rs.6,500,000,000/- (Rupees Six hundred and Fifty Crore) divided into 6,500,000,000 (Rupees Six hundred and Fifty Crore) Equity shares of Rs.1 (Rupee one) each.
Listing of Companyâs Securities
Your Companyâs fully paid up equity shares continue to be listed and traded on National Stock Exchange of India Limited (âNSEâ) and BSE Limited (âBSEâ). Both these Stock Exchanges have nationwide trading terminals and hence facilitates the shareholders/investors of the Company in trading the shares. The Company has paid the annual listing fee for the Financial Year 2018-19 to the said Stock Exchanges.
The Company has also paid the annual maintenance fee to the Luxembourg Stock Exchange in respect of its Global Depository Receipts (âGDRâ) program for the year 2018.
Further, Consequent to Amalgamation of Videocon d2h Limited into and with the Company, your Company has issued new Global Depositary Receipts (the âGDRsâ) to the holders of American Depositary Shares (âADSsâ) of Videocon D2H Limited which are listed on the Professional Securities Market (âPSMâ) of the London Stock Exchange. Necessary fees in relation to the GDRâs of the Company listed on London Stock Exchange has been paid.
Depositories
Your Company has arrangements with National Securities Depository Limited (âNSDLâ) and Central Depository Services (India) Limited (âCDSLâ), the Depositories, for facilitating the members to trade in the fully paid up equity shares of the Company in Dematerialized form. The Annual Custody fees for the Financial Year 2018-19 has been paid to both the Depositories.
Re-classification from Promoter Group Category to Public Category
The Board at its meeting held on August 12, 2016 and January 30, 2017 had taken on record the re-classification application(s) received from the Outgoing Promoters (Dr. Subhash Chandra, Mr. Ashok Kumar Goel and Mr. Ashok Mathai Kurien, along-with their respective family members / relatives, the entities controlled by them and persons acting in concert with them, who were categorized as Promoters of the Company). Subsequently, the Board approved the Postal Ballot Notice for seeking the consent of the Members of the Company for the said re-classification of the Outgoing Promoters from âPromoter and Promoter Groupâ category to the âPublicâ category. The Members of the Company accorded its approval to the said re-classification on November 23, 2017, in terms of Regulation 31A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable provisions, if any, of the Companies Act, 2013. Post the said approval, the Company applied to Stock Exchanges for approving the said reclassification.
The National Stock Exchange of India Limited (âNSEâ) vide its letter dated January 8, 2018 and BSE Limited (âBSEâ) vide its letter dated January 30, 2018 have accorded their approval for reclassification of the aforementioned Outgoing Promoters from âPromoter and Promoter group Categoryâ to âPublic Categoryâ under Regulation 31A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Accordingly, the below mentioned Outgoing Promoters of the Company (along-with their respective family members / relatives, the entities controlled by them and persons acting in concert with them, who were categorized as Promoters of the Company) have been re-classified from âPromoter and Promoter Groupâ category to the âPublicâ category.
|
S. No. |
Name of Outgoing Promoters |
|
1 |
Ashok Mathai Kurien |
|
2 |
Ambience Business Services Private Limited |
|
3 |
Ashok Kumar Goel |
|
4 |
Subhash Chandra |
|
5 |
Direct Media Solutions LLP |
|
6 |
Manaaska Fashions LLP |
|
7 |
Jay Properties Private Limited |
|
8 |
Sprit Textiles Private Limited |
|
9 |
Essel Media Ventures Limited |
Open Offer by World Crest Advisors LLP & PACs
World Crest Advisors LLP a body corporate, along with Veena Investments Private Limited and Direct Media Distribution Venture Private Limited, Persons Acting in Concert (âPACâ) (all forming part of Promoter and Promoter group of the Company), vide Letter of Offer dated June 20, 2018 made an Open Offer to all the Public Shareholders of the Company to acquire upto 50,02,24,893 (Fifty Crore two Lac twenty four thousand eight hundred and ninety three only) equity Shares of the Company, representing 26% (Twenty Six Percent) of the Emerging Share Capital of the Company, at an offer price of Rs.74/- (Rupees seventy four only) per equity Share. The Public Announcement in relation to the aforesaid offer was made on April 12, 2018 and Detailed Public Announcement was published on April 18, 2018 in Financial Express, Jansatta and Mumbai Lakshadeep Newspaper editions. The Draft Letter of Offer (âDLoFâ) was filed with SEBI on April 25, 2018. Recommendations of the Committee of Independent Directors of the Company was duly published on June 26, 2018 in Financial Express, Jansatta and Mumbai Lakshadeep Newspaper editions, in terms of applicable provisions.
In terms of Letter of offer, the offer was made open from Monday, July 2, 2018 to Friday, July 13, 2018. On completion of the Offer Period and in compliance with applicable provisions, World Crest Advisors LLP acquired in aggregate 44,62,38,855 (Forty four Crores sixty two lakh thirty eight thousand eight hundred and fifty five) equity shares of the Company.
Accordingly, as on date of this report World Crest holds in aggregate 53,77,38,955 equity shares of face value of Rs.1 each of the Company aggregating to 29.2% of the paid up share capital of the Company.
8. EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, your Board had authorized the Nomination and Remuneration Committee (formerly âRemuneration Committeeâ) to administer and implement the Companyâs Employees Stock Option Scheme (ESOP - 2007) including deciding and reviewing the eligibility criteria for grant and /or issuance of stock options under the Scheme. The ESOP Allotment Committee of the Board considers, reviews and allots equity shares to the eligible Employees exercising the stock options under the Employee Stock Option Scheme (ESOP - 2007) of the Company.
During the period under review, the Nomination and Remuneration Committee (formerly âRemuneration Committeeâ) of the Board granted 40,000 stock options to an eligible Employee as per the ESOP - 2007 Scheme of the Company. Further, the Company, during the year, allotted 45,370 fully paid equity shares, upon exercise of the stock options by eligible Employees under the ESOP -2007 Scheme of the Company.
Applicable disclosures relating to Employees Stock Options as at March 31, 2018, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, are available on the website of the Company at http://www. dishd2h.com/corporate-governance/ The ESOP-2007 Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.
Statutory Auditorsâ certificate to the effect that the ESOP - 2007 Scheme of the Company has been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company, as prescribed under Regulation 13 of the SEBI (Share Based Employee Benefits) Regulations, 2014, has been obtained and shall be available for inspection at the Annual General Meeting of the Company. Copy of the same shall also be available for inspection at the Registered Office of the Company on all working days (Monday to Friday) between 2.00 P.M. to 4.00 P.M. up to the date of Annual General Meeting of the Company.
Further, the Nomination and Remuneration Committee (formerly âRemuneration Committeeâ) at its meeting held on August 17, 2018 with an objective to attract, retain, motivate, incentivize and to attract and retain the best talent has approved a new ESOP Scheme - âESOP 2018â for the employees. The Board at its meeting held on the same day approved the said matter and a proposal seeking approval of the members for the said ESOP Scheme forms part of the Notice of ensuing Annual General Meeting.
9. RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
The Company had come up with Right Issue in Financial Year 2008-09 for 518,149,592 equity shares of Rs.1 each, issued at Rs.22 per share (including premium of Rs.21 per share), payable in three installments. Out of the total Right Issue size of Rs.113,992.91 Lacs, the Company has received a sum of Rs.113,988.68 Lacs towards the share application and call money(s) as at March 31, 2018.
The details of utilization of Rights Issue proceeds are placed before the Audit Committee and the Board on a quarterly basis.
The Board at its meeting held on May 28, 2009 approved to make changes in the manner of usage of right issue proceeds and the utilization of rights issue proceeds as on March 31, 2018, is as under:
|
Particulars |
Amount (Rs. In Lakhs) |
|
Repayment of loans |
28,421.44 |
|
Repayment of loans received after launch of the Rights Issue |
24,300.00 |
|
General Corporate Purpose |
34,722.72 |
|
Acquisition of Consumer Premises Equipment (CPE) |
26,000.00 |
|
Right Issue Expenses |
544.52 |
|
Total |
113,988.68 |
10. GLOBAL DEPOSITORY RECEIPT
The Board of your Company at its meeting held on November 11, 2016 had approved the Scheme of Arrangement amongst Videocon D2H Limited and Dish TV India Limited and their respective Shareholders and Creditors (âSchemeâ).
Videocon D2H Limited (the transferor Company in terms of Scheme) had American Depositary Shares (âADSsâ) which were listed on Nasdaq Global Market (âNasdaqâ). In terms of the scheme, the said ADSs were voluntarily delisted from the Nasdaq and deregistered with the U.S. Securities and Exchange Commission (âSECâ). Accordingly, consequent to effectiveness of the scheme the said ADS were delisted from Nasdaq.
In terms of the Scheme, the ADS holders of Videocon D2H Limited had option to elect and to either receive the shares of Dish TV India Limited or the GDR to be issued by Dish TV India Limited. Accordingly, the ADS holders of Videocon D2H Limited were issued Global Depositary Receipts (the âGDRsâ) of Company. The effective date of issuance of GDRs was April 12, 2018, and the same were listed on the Professional Securities Market (âPSMâ) of the London Stock Exchange on April 13, 2018.
Post receipt of all necessary approval(s) and in compliance of order Passed by Honâble National Company Law Tribunal (âNCLTâ) dated July 27, 2017 for Amalgamation of Videocon D2H Limited into and with the Company, the Board at its meeting held on March 26, 2018, approved the issuance of 277,095,615 Global Depositary Receipts (the âGDRsâ) to the holders of ADSs of Videocon D2H Limited (each GDR representing one equity share of the Company, exchanged at a rate of approximately 8.07331699 new GDRs for every one Videocon D2H Limited ADS (rounded off up to eight decimal places). The underlying equity shares against each of the GDRâs were issued in the name of the Depository viz. Deutsche Bank Trust Company Americas.
11. REGISTERED OFFICE
The Registered Office of the Company is presently situated at 18th Floor, A Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai-400013, Maharashtra.
12. REGISTRAR & SHARE TRANSFER AGENT
The Registrar & Share Transfer Agent (âRTAâ) of the Company was changed from Sharepro Services (India) Private Limited to Link Intime India Private Limited, with effect from July 1, 2016 pursuant to restraining order issued by SEBI against the erstwhile RTA.
The Registered office of Link Intime India Private Limited, the Registrar & Share Transfer Agent of Company (âRTAâ) is situated at C 101, 247 Park, LBS Marg, Vikhroli (West), Mumbai - 400 083, Maharashtra.
13. CORPORATE GOVERNANCE AND POLICIES
In order to maximize shareholder value on a sustained basis, your Company has been constantly reassessing and benchmarking itself with well-established Corporate Governance practices besides strictly complying with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), applicable provisions of Companies Act, 2013 and applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
In terms of Schedule V of Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company is attached and forms an integral part of this Annual Report. Management Discussion and Analysis Report and Business Responsibility Report as per Listing Regulations are presented in separate sections forming part of the Annual Report. The said Reports will also be available on the Companyâs website www.dishd2h. com as part of the Annual Report.
In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board has approved various Policies including Code of Conduct for Directors & Senior Management, Material Subsidiary Policy, Insider Trading Code, Document Preservation Policy, Material Event Determination and Disclosure Policy, Fair Disclosure Policy, Corporate Social Responsibility Policy, Whistle Blower and Vigil Mechanism Policy, Related Party Transaction Policy, Dividend Distribution Policy and Remuneration Policy. These policies and codes along with the Directors Familiarisation Programme and Terms and Conditions for appointment of Independent Directors have been uploaded on Companyâs website viz. www.dishd2h. com and is accessible at http://www.dishd2h.com/ corporate-governance/
I n compliance with the requirements of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee of your Board has fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limits, qualification / experience, areas of expertise and independence of individual.
In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (the PIT Regulationsâ) on prevention of insider trading, your Company had instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances. Your Company has further put in place a Code of practices and procedures of fair disclosures of unpublished price sensitive information. Both the aforesaid Codes are in line with the PIT Regulations.
The Audit Committee of the Board has been vested with powers and functions relating to Risk Management which inter alia includes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization; and (c) formulation, implementation and monitoring of the risk management plan.
14. DIRECTORSâ & KEY MANAGERIAL PERSONNEL
Directors
As on March 31, 2018, your Board comprised of Five (5) Directors including Three (3) Independent Directors, One (1) Executive Director and One (1) Non-Executive Director. Independent Directors provide declarations both at the time of appointment and annually, confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Listing Regulations. During FY 1718 your Board met 6 (six) times details of which are available in the Corporate Governance Report annexed to this report.
During the year under review, Mr. Lakshmi Chand, an Independent Director on the Board of the Company tendered his resignation with effect from August 17, 2017, on account of his other engagements and pre-occupations. Your Board took note of the said resignation at its meeting held on August 17, 2017 and placed on record its appreciation for the contributions made by him during his tenure.
Further, post March 31, 2018, Mr. Arun Duggal an Independent Director on the Board of the Company expressed his inability to continue as Director due to his other professional obligations and commitments and accordingly tendered his resignation from the Board and Committees thereof with effect from May 18, 2018. Your Board took note of the said resignation at its meeting held on May 29, 2018 and placed on record its appreciation for the contributions made by him during his tenure.
The Members of the Company at their 27th Annual General Meeting held on September 29, 2015, approved the appointment of Dr. (Mrs.) Rashmi Aggarwal (DIN - 07181938) as an Independent Director of the Company for a term of 3 (three) consecutive years from the date of the 27th Annual General Meeting upto the 30th Annual General Meeting of the Company to be held in the calendar year 2018. Accordingly, her term is expiring at the ensuing Annual General Meeting. Special Resolution seeking membersâ approval for appointing her as an Independent Directors for the second term of 5 years from expiry of her current term forms part of the notice of the ensuing Annual General Meeting. Your Company has received a notice in writing along with requisite deposit pursuant to Section 160 of Companies Act, 2013, proposing re-appointment of Dr. (Mrs.) Rashmi Aggarwal for second term and based on performance evaluation and contributions made by her, your Board recommends her appointment for the second term of 5 years from the date of the 30th Annual General Meeting upto the 35th Annual General Meeting of the Company to be held in the calendar year 2023.
The Members of the Company at their 27th Annual General Meeting held on September 29, 2015, approved the re-appointment and terms thereof of Mr. Jawahar Lal Goel, (DIN no. 00076462) as the Managing Director of the Company for a period of three years effective from January 6, 2016 to January 5, 2019. Accordingly, the said present appointment of Mr. Goel would expire on January 5, 2019. Your Board, as per the recommendation of the Nomination and Remuneration Committee and subject to approval of shareholders at the ensuing Annual General Meeting and subject to such other approvals as may be required, considered and approved the re-appointment of Mr. Goel as the Managing Director of the Company for a further period from January 6, 2019 to December 16, 2019 (both days included), at its meeting held on August 17, 2018. Requisite proposal seeking your approval for his re-appointment as Managing Director and also payment of remuneration forms part of the Notice of ensuing Annual General Meeting. Your Board recommend the proposal for approval of Shareholders.
Mr. Ashok Kurien, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible has offered himself for re-appointment. Your Board recommends his reappointment.
During the year under review, Mr. Arun Kumar Kapoor, Chief Executive Officer, tendered his resignation from the close of working hours of May 15, 2017. Your Board placed on record its appreciation for the contributions made by him during his tenure. Based on the recommendation of Nomination and Remuneration Committee your Board appointed Mr. Anil Kumar Dua as the Group Chief Executive Officer of the Company with effect from May 17, 2017.
In compliance with the requirements of Section 203 of the Companies Act, 2013, as on the date of this report, Mr. Jawahar Lal Goel, Managing Director and Chairman, Mr. Anil Kumar Dua, Chief Executive Officer, Mr. Rajeev Kumar Dalmia, Chief Financial Officer and Mr. Ranjit Singh, Company Secretary of the Company are Key Managerial Personnel of the Company.
Chairman & Managing Director
Mr. Jawahar Lal Goel, continues to be the Chairman and Managing Director of the Company. Under the leadership of Mr. Goel, the Company has continuously maintained growth in terms of revenue as well as continued its stronghold on the Direct to Home (DTH) market share. The Company has made considerable progress in all the spheres and has achieved tremendous growth and acquired goodwill and reputation in the business. Mr. Goel has spearheaded the organization with strong zeal and commitment despite strong competitive intensity, rise of digital cable network, regulatory challenges and technological upheavals.
Mr. Goel has led your Company in a highly competitive and volatile market to not just consolidate its market leadership but also in shaping the future of your Company into a modern, technology & innovation-driven organisation.
Board Diversity
As on March 31, 2018, your Board comprises of 5 Directors including 3 Independent Directors (including 1 Women Director). The Company recognizes and embraces the importance of a diverse Board in its success. The Board has also adopted the Board Diversity Policy.
Board Meetings
The Board met Six times during the Financial Year, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and Listing Regulations.
Declaration by Independent Directors
Independent Directors of the Company provide declarations, both at the time of appointment and annually, confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and the Listing Regulations. Your Company has received the said declarations from all the Independent Directors. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and Listing Regulations and are independent of the management.
Board Evaluation
A formal evaluation of the performance of the Board, itâs Committees, the Chairman and the individual Directors was carried out for the Financial Year 2017-18 on March 26, 2018.
The Independent Directors of your Company, in a separate meeting held without presence of other Directors and management, evaluated the performance of the Chairman & Managing Director and other Non-Independent Directors along with performance of the Board / Board Committees based on various criteria recommended by Nomination and Remuneration Committee and âGuidance Note on Board Evaluationâ dated January 5, 2017 issued by SEBI. A report on such evaluation done by the Independent Directors was taken on record by the Board and further your Board, in compliance with requirements of Companies Act, 2013, evaluated performance of all Independent Directors based on various parameters including attendance, contribution etc. The details of the evaluation process are set out in the Corporate Governance Report which forms part of this Report.
Policy on Directorsâ appointment and remuneration
In compliance with the requirements of Section 178 of the Companies Act, 2013, the âNomination & Remuneration Committeeâ (NRC Committee) of your Board had fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limit, qualification / experience, areas of expertise and independence of individual. Your Company has also adopted a Remuneration Policy, salient features whereof is annexed to this report.
Further, pursuant to provisions of the Act, the NRC Committee of your Board has formulated the Remuneration Policy for the appointment and determination of remuneration of the Directors, Key Management Personnel, Senior Management and other Employees of your Company. The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive Directors of the Company.
The NRC Committee takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration packages and for administering the long-term incentive plans, such as ESOPs. Further, the compensation package of the Director, Key Management Personnel, Senior Management and other employees are designed based on the set of principles enumerated in the said policy. Your Directors affirm that the remuneration paid to the Directors, Key Management Personnel, Senior Management and other employees is as per the Remuneration Policy of your Company.
The Remuneration details of the Executive Director, Chief Executive Officer, Chief Financial Officer and Company Secretary, along with details of ratio of remuneration of Director to the median remuneration of employees of the Company for the FY under review are provided as Annexure to this Report.
Familiarisation Programme for Independent Directors
During the year under review, to familiarize the Directors with strategy, operations and functions of the Company, the senior managerial personnel made presentations about Companyâs strategy, operations, product offering, market, technology, facilities and risk management. The Directors were also provided with relevant documents, reports and internal policies to enable them to familiarise with your Companyâs procedures and practices, from time to time, besides regular briefing by the members of the senior leadership team.
Also the Board including all Independent Directors were given a detailed presentation on February 6, 2018 by Ernst & Young LLP on various aspects of the Companies Amendment Act, 2017, Roles and responsibilities of Directors and applicable provisions of IND AS Accounting Standards.
Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining their duties and responsibilities as a Director.
Detail of familiarisation program organized for Independent Directors during FY under review form part of Corporate Governance Report annexed hereto and are also posted on the Companyâs website viz. http://www.dishd2h.com/ and can be viewed on the following link: http://www.dishd2h. com/corporate-governance/
Committees of the Board
In compliance with the requirements of Companies Act, 2013 and Listing Regulations your Board had constituted various Board Committees including Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.
During the period under review, in view of resignation of Mr. Lakshmi Chand, Independent Director, from the Board and committees thereof with effect from August 17, 2018, the Audit and Nomination & Remuneration Committee was re-constituted. As on March 31, 2018, the Audit Committee of the Board consisted of Mr. B D Narang, an Independent Director as the Chairman of the Committee and Mr. Arun Duggal and Dr. (Mrs.) Rashmi Aggarwal, Independent Directors as its members.
Further, in view of resignation of Mr. Arun Duggal, Independent Director, from the Board and committees thereof with effect from May 18, 2018 the Board at its meeting held on May 29, 2018 reconstituted the Composition of Board Committees.
As on the date of this report the Audit Committee of the Board consists of Mr. B D Narang, an Independent Director as the Chairman of the Committee and Mr. Ashok Mathai Kurien, NonExecutive - Non Independent Director and Dr. (Mrs.) Rashmi Aggarwal, Independent Director as its members.
Details of the constitution of the Board Committees, which are in accordance with regulatory requirements, have been uploaded on the website of the Company viz. http://www.dishd2h.com Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.
Vigil Mechanism
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle Blower Policy which provides a robust framework for dealing with genuine concerns & grievances. The Policy provides opportunity to Directors/ Employees/Stakeholders of the Company to report concerns about unethical behavior, actual or suspected fraud of any Director and/or Employee of the Company or any violation of the Code of Conduct. The Policy safeguards whistleblowers from reprisals or victimization. Further during the year under review, no case was reported under the Vigil Mechanism. In terms of the said policy, no personnel has been denied access to the Audit Committee of the Board.
Cost Records
Your Company is required to maintain the Cost Records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 read with Notification No. GSR. 695(E) dated July 14, 2016 of Ministry of Corporate Affairs.
Your board at its meeting held on May 24, 2017 had appointed M/s Chandra Wadhwa & Co., (Firm Registration No. 00239), Cost Accountants, to carry out Audit of Cost Records of the Company for the Financial Year 2017-18. The Cost Auditors have issued their report for the Financial Year 2017-18 on July 9, 2018, which has been taken on record by the Audit / Board of the Company.
15. CORPORATE SOCIAL RESPONSIBILITY
In compliance with requirements of Section 135 of the Companies Act, 2013, your Company has a duly constituted Corporate Social Responsibility Committee (CSR Committee) comprising of five members including three Independent Directors as on March 31, 2018.
Mr. Arun Duggal, Independent Director and Member of the committee resigned from the Board and committees thereof with effect from May 18, 2018 due to professional obligations and commitments. Post resignation of Mr. Duggal, the Committee comprises of four members including Two Independent Directors. Accordingly, as on date the CSR Committee comprises of four members including two Independent Directors.
Your Company has adopted a unified approach towards CSR wherein CSR contributions are pooled in, to fund high cost long-term projects that help build Human capital and create lasting impact on the society. The Committee has approved the CSR Policy with Education, Health Care, Women Empowerment and Sports as primary focus area. A Section 8 Company in the name of âSubhash Chandra Foundationâ was established and the Company had contributed to the said foundation towards preventive Health care Initiative including sponsorship of âMadhav Netralayaâ a dedicated Centre of excellence for ophthalmology.
A detailed report on Corporate Social Responsibility activities initiated by the Company during the year under review, in compliance with the requirements of Companies Act, 2013, is annexed to this report.
16. POSTAL BALLOT
During the year under review, your Company sought the approval of the Shareholders through Postal Ballot on the below matters:
- Postal Ballot Notice dated April 3, 2017, seeking Shareholders consent through Special Resolution for approval of the Scheme of Arrangement among Videocon D2H Limited and Dish TV India Limited and their respective shareholders and creditors pursuant to Sections 230 to 232 of the Companies Act, 2013 and the Honâble National Company Law Tribunal, Mumbai Bench Order dated March 22, 2017. The said Postal Ballot was conducted in terms of Order of Honâble National Company Law Tribunal, in addition to calling the NCLT convened meeting of Shareholders.
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E-Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The said resolution was passed with requisite majority and the result of the same was declared on May 12, 2017.
- Postal Ballot Notice dated August 17, 2017, seeking Shareholders consent through Special Resolution for Sale / Transfer of the Companyâs Non-Core Business undertaking of Infra Support Services (including set top boxes, dish antenna etc., and related services) to Dish Infra Services Private Limited, a wholly owned Subsidiary of the Company, on a going concern basis.
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E-Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The said resolution was passed with requisite majority and the result of the same was declared on September 27, 2017.
- Postal Ballot Notice dated October 11, 2017, seeking Shareholders consent through Ordinary Resolution for Re-classification from âPromoter Groupâ Category to âPublicâ Category
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E-Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The said resolution was passed with requisite majority and the result of the same was declared on November 25, 2017.
The procedure prescribed under Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, was adopted for conducting the Postal Ballots.
Further, details related to the Postal Ballot procedure adopted, voting pattern and result thereof have been provided under the General Meeting Section of âReport on Corporate Governanceâ.
17. AUDITORS
Statutory Auditors
At the 26th Annual General Meeting of the Company held on September 29, 2014, M/s. Walker Chandiok & Co. LLP, Chartered Accountants, Gurgaon, having Registration No 001076N/N - 500013 were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 29th Annual General Meeting. Further, at 29th Annual General Meeting held on September 28, 2017 the members had re-appointed M/s. Walker Chandiok & Co. LLP, Chartered Accountants, New Delhi, as the Statutory Auditorsâ of the Company, for second term of Five (5) consecutive years i.e. to hold office from the date of 29th Annual General Meeting until the conclusion of the 34th Annual General Meeting of the Company to be held in the calendar year 2022 subject to ratification by the Shareholders every year.
Pursuant to the recent Notification issued by the Ministry of Corporate Affairs on May 7, 2018 amending Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the mandatory requirement for ratification of appointment of Auditors by the Members at every Annual General Meeting (âAGMâ) has been omitted. Accordingly the Notice of ensuing Annual General Meeting does not include the proposal for seeking Shareholders approval for ratification of Statutory Auditors appointment. The Company has received certificate of eligibility from M/s Walker Chandiok & Co LLP, in accordance with the provisions of the Companies Act, 2013 read with rules thereunder and a confirmation that they continue to hold valid Peer Review Certificate as required under Listing Regulations.
Secretarial Auditor
During the year, the Board re-appointed Mr. Jayant Gupta, Practicing Company Secretary, proprietor of M/s Jayant Gupta & Associates, Company Secretaries as the Secretarial Auditor of the Company for conducting the Secretarial Audit for the financial year 2017-18. In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit for FY 17-18 was carried out by Mr. Jayant Gupta, Practicing Company Secretary (holding ICSI Certificate of Practice No. 9738).
The Company has complied with all the provisions of Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.
The reports of Statutory Auditor and Secretarial Auditor forming part of this Annual report do not contain any qualification, reservation or adverse remarks. During the year the Statutory Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under the applicable provisions of the Act.
Cost Auditor
In compliance with the requirements of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, M/s Chandra Wadhwa & Co., (Firm Registration No. 00239), Cost Accountants, were appointed to carry out Audit of Cost Records of the Company for the Financial Year 2017-18. The Board of your Company on the basis of the recommendation of the Audit Committee, had approved the re-appointment of M/s Chandra Wadhwa & Co., (Firm Registration No. 00239), Cost Accountants, as the Cost Auditors for the financial year ending March 31, 2019.
Requisite proposal seeking ratification of remuneration payable to the Cost Auditor for the Financial Year 2018-19 by the Members as per Rule 14 of Companies (Audit and Auditors) Rules, 2014, forms part of the Notice of ensuing Annual General Meeting.
Internal Auditor
Protiviti Advisory India Member LLP was the Internal auditor of the Company for the Financial Year 2017-18.The Audit Committee at its meeting held on May 29, 2018 decided and recommended to the Board for re-appointment of Protiviti Advisory India Member LLP as the Internal Auditor of the Company for the Financial Year 2018-19. Basis the recommendation of the Audit Committee, the Board, at its meeting held on May 29, 2018 has re-appointed Protiviti Advisory India Member LLP as the Internal Auditor of the Company for the Financial Year 2018-19.
Reporting of frauds by Auditors
During the year under review, the Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this report.
18. DISCLOSURES:
i. Particulars of Loans, guarantees and investments: Particulars of Loans, guarantees and investments made by the Company required under Section 186(4) of the Companies Act, 2013 and the Listing Regulations are contained in Note no. 66 to the Standalone Financial Statement.
ii. Transactions with Related Parties: In terms of the applicable statutory provisions, the related party transactions are placed before the Audit Committee for its approval and statement of all related party transactions is placed before the Audit Committee for its review on a quarterly and yearly basis, specifying the nature, value and terms and conditions of the transactions along with Arms-length justification. All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Armâs Length basis. During the year under review, there have been no materially significant related party transactions as defined under Section 188 of the Act and Regulations 23 the Listing Regulations and accordingly no transactions are required to be reported in Form AOC-2 as per Section 188 of the Companies Act, 2013.
iii. Risk Management: Your Company follows a comprehensive system of Risk Management. It has adopted a policy and procedure for rapid identification, definition of risk mitigation plans and execution. Actions include adjustments in prices, dispatch plan, inventory build-up, and active participation in regulatory mechanisms. Many of these risks can be foreseen through systematic tracking. Your Company has also defined operational processes to ensure that risks are identified and the operating management are responsible for identifying and implementing mitigation plans for operational and process risk. Key strategic and business risks are identified and managed by senior management team. The Risks and their mitigation plans are updated and reviewed periodically by the Audit Committee and integrated in the Business plan for each year. In the opinion of the Board there are no risks that may threaten the existence of the Company.
iv. Internal Financial Controls and their adequacy: Your company has an effective internal control and risk mitigation system, which is constantly assessed and strengthened with standard operating procedures and which ensures that all the assets of the Company are safeguarded & protected against any loss, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records, timely preparation of reliable financial information and that all transactions are properly authorized and recorded. The Company has laid down procedures to inform audit committee and board about the risk assessment and mitigation procedures, to ensure that the management controls risk through means of a properly defined framework. The Audit Committee evaluates the internal financial control system periodically and deals with accounting matters, financial reporting and periodically reviews the Risk Management Process.
Based on internal financial control framework and compliance systems established in the Company, the work performed by statutory, internal and secretarial auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2017-18. During the year, no reportable material weakness in the design or operation was observed.
v. Deposits: Your Company has not accepted any public deposit under Chapter V of the Companies Act, 2013.
vi. Transfer to Investor Education and Protection Fund: During the year under review, in compliance with the requirements of The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) as amended, your Company had transferred an amount of Rs.5,73,250 (Rupees Five Lakh Seventy Three Thousand Two Hundred and Fifty Only) to Investor Education and Protection Fund on account of unpaid sale proceeds of Fraction shares under the Scheme of Arrangement pending for 7 or more years. The said amount can be claimed by the Shareholders from IEPF authority after following process prescribed in IEPF Rules.
vii. Transfer to General Reserve: During the Financial Year under review, no amount has been transferred to the General Reserve of the Company
viii. Extract of Annual Return: The extract of Annual return in form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report.
ix. Sexual Harassment: The Company has zero tolerance for Sexual Harassment at workplace. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted Internal Complaint(s) Committee functioning at various locations to redress complaints regarding sexual harassment and has adopted a Policy on prevention of Sexual Harassment in line with the provisions of âThe Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013â. There was no complaint of sexual harassment during the year under review.
x. Regulatory Orders: No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Companyâs operations in future.
19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
Your Company is in the business of providing Direct-to- Home (âDTHâ) services. Since the said activity does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are not applicable.
However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy consumption and every endeavor is made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.
Technology Absorption:
In its endeavor to deliver the best to its viewers and business partners, your Company is constantly active in harnessing and tapping the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
During the year under review, your Company had foreign exchange earnings of Rs.1,008 Lakhs and outgo of Rs.18,039 Lakhs.
20. RATINGS
I CRA Limited, a Credit rating agency, has during the year under review assigned ICRA A (ICRA A plus) rating for the Loan Term Loans and ICRA A (Stable)/ ICRA A1 long-term/ short-term interchangeable* (*Sub-Limit of long-term loan and fully interchangeable between fund based and non-fund based). Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lower credit risk.
CARE (Credit Analysis and Research Limited), a Credit rating agency has enhanced the rating of Long-Term/Non-Convertible Debenture/ Short Term Bank Facilities of the Company to CARE A (SO) /A1 (SO). Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lower credit risk.
21. HUMAN RESOURCE MANAGEMENT
Your Company has been successful in attracting best of the talent from industry and academic institutions and has been effectively retaining them. Your Company has created a favorable work environment which encourages innovation, meritocracy and team collaboration. The Company is committed to nurturing, enhancing and retaining talent through superior Learning & Organization Development interventions.
Owing to the amalgamation of Videocon D2H Limited into the Company, Human Resource Management has been one of the key priorities for your Company. While harmonizing people practices, the strategic approach had been to adopt best aspects of both companies, align to the market-best practices and build a future ready organization. In an endeavor to build an organization that is swifter and more efficient, your Company has undergone a complete restructuring exercise. The new structure has been designed, keeping in mind the business priorities and long term strategic goals of your Company.
Whilst aligning the new structure, it was essential for your Company to create equivalence across both legacy grade structures considering a number of factors such as existing organization hierarchies, responsibility levels, impact on business, degree of complexity, knowledge and skill requirements, span of control etc. Considering these factors, a flatter organization was created to enable empowerment across levels, effective communication, collaboration and faster decision making. Role-fitment was done basis a structured process of competency assessment conducted by a third party. To bring synergies in policies and people processes, your company adopted the best practices of both the organizations as well as the industry and overhauled the existing policies.
Both entities shared a number of similarities yet had their individual strengths. To ensure effective Amalgamation of the workforce, Values were redefined to serve as âcultural glueâ to offer mutual understanding, effective communication and significantly increase the efficiency of the organisation. Workshops were and are being conducted for employees across the country so they understand and exhibit these values in their work and behaviour.
In order to build a value-driven organization, these values are included in the Performance Management System. The focus stems from the fact that a value based culture not only enhances customer satisfaction and loyalty but also improves the organizational performance and engagement levels. Going forward, alongside the KRAâs, these values will be the cultural cornerstones guiding the organisationâs actions, be it decision making, people processes or the operations of your Company. These will also be integrated in the hiring philosophy and reward & recognition programs.
Your Company believes that committed employees are vital for the sustained growth of the Company. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your Company has established policies and procedures to discover and use the employeesâ capabilities and potential to increase their commitment and contribution to the overall organization. The Company has a robust appraisal system and appraisals are done following a top down approach and open performance discussions. We encourage meritocracy and reward excellence in performance.
Your Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, co-operation and support have enabled the Company to cross milestones on a continual basis.
Particulars of Employees
As on March 31, 2018, the total numbers of permanent employees on the records of the Company were 596. The information required under Section 197 of the Companies Act, 2013 (âActâ) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under the said rules is annexed to this report.
22. DIRECTORSâ RESPONSIBILITY STATEMENT
I n terms of and pursuant to Section 134 of the Companies Act, 2013, in relation to the Annual Financial Statements for the Financial Year 2017-18, your Directors state and confirm that:
a) The Financial Statements of the Company comprising of the Balance Sheet as at March 31, 2018 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis;
b) In the preparation of these Financial Statements, the applicable accounting standards had been followed and there are no material departures;
c) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018, and, of the profit of the Company for the year ended on that date;
d) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;
e) Requisite internal financial controls were laid down and that such financial controls are adequate and operating effectively; and
f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
23. BUSINESS RESPONSIBILITY REPORT & MANAGEMENT DISCUSSION AND ANALYSIS
The Business Responsibility Report (âBRRâ) has been prepared and forms part of the Annual Report as Annexure. The Report provides an overview of initiatives taken by your Company.
The Management Discussion and Analysis report as provided under Listing Regulations is separately attached hereto and forms an integral part of this Annual Report. The said report gives details of the overall industry structure, economic developments, performance and state of affairs of your Companyâs business and other material developments during the financial year under review.
24. INDUSTRIAL OPERATIONS
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across the organization.
25. CAUTIONARY STATEMENT
Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companyâs objectives, projections, estimates and expectations, may constitute âforward looking statementsâ within the meaning of applicable laws and regulations and actual results might differ.
26. ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. Your Directors value the professionalism and commitment of all employees of the Company and place on record their appreciation of the contribution made by employees of the Company and its subsidiaries at all levels that has contributed to your Companyâs success. Your Directors acknowledge with sincere gratitude the co-operation and support extended by the Central and State Governments, the Ministry of Information and Broadcasting (âMIBâ), the Department of Telecommunication (âDOTâ), Ministry of Finance, the Telecom Regulatory Authority of India (âTRAIâ), the Stock Exchanges and other stakeholders including employees, subscribers, vendors, bankers, investors, service providers as well as other regulatory and government authorities.
Your Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued stakeholders.
For and on behalf of the Board
Jawahar Lal Goel B. D. Narang
Chairman & Managing Director Independent Director
DIN: 00076462 DIN: 00826573
Place: Noida
Date: August 17, 2018
Mar 31, 2017
To the Members,
The Directors are pleased to present the 29th (Twenty Ninth) Annual Report covering the business and operations of the Company and the Annual Audited Financial Statements of the Company for the Financial Year ended March 31, 2017.
FINANCIAL RESULTS
The Financial Performance of your Company for the Financial Year ended March 31, 2017 is summarized below:
(Rs. In Lakhs)
|
Standalone -Year Ended |
Consolidated- Year Ended |
|||
|
Particulars |
Year ended March 31, 2017 |
Year ended March 31, 2016 |
Year ended March 31, 2017 |
Year ended March 31, 2016 |
|
Sales & Services |
1,94,539 |
2,22,755 |
3,01,439 |
3,05,994 |
|
Other Income |
4,388 |
7,847 |
4,751 |
6,404 |
|
Total Income |
1,98,927 |
2,30,602 |
3,06,190 |
3,12,398 |
|
Total Expenses |
1,74,308 |
1,92,890 |
2,92,850 |
2,83,446 |
|
Profit/(Loss) before Tax & Prior Period Item |
24,619 |
37,712 |
13,340 |
28,952 |
|
Prior Period Item |
- |
- |
- |
- |
|
Profit/(Loss) before Tax |
24,619 |
37,712 |
13,340 |
28,952 |
|
Profit from continuing operations before tax |
24,619 |
37,712 |
13,340 |
28,952 |
|
Profit/(loss) from discontinuing operations before tax |
- |
- |
- |
- |
|
- Current tax |
8,789 |
260 |
10,349 |
3,310 |
|
- Deferred tax credit |
(179) |
(4,540) |
(7,403) |
(43,600) |
|
- Income tax -prior years |
(260) |
- |
(534) |
- |
|
Profit from continuing operations after tax |
16,269 |
41,992 |
10,928 |
69,242 |
|
Profit/(loss) from discontinuing operations after tax |
- |
- |
- |
|
|
Profit/(Loss) after Tax |
16,269 |
41,992 |
10,928 |
69,242 |
|
Profit/(Loss) for the Year |
16,269 |
41,992 |
10,928 |
69,242 |
|
Add: Balance brought forward |
(1,55,870) |
(1,97,862) |
(1,28,777) |
(1,98,019) |
|
Adjustment for depreciation |
- |
- |
- |
- |
|
Amount available for appropriations |
(1,39,601) |
(1,55,870) |
(1,17,850) |
(1,28,777) |
|
Balance Carried Forward |
(1,39,601) |
(1,55,870) |
(1,17,850) |
(1,28,777) |
There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of the Company other than the Order of the Honâble National Company Law Tribunal, Mumbai Bench approving the proposal of the Company for âCapital Reduction by way of reduction of the Securities Premium Account by writing off the deficit in the Statement of Profit & Loss Account of the Companyâ. The same has been dealt in this report.
DIVIDEND
The Board takes the pleasure to report that your Company continues to be in profits in the financial year under review. With sustained focus on the business, your Company has reported a profit of Rs.16,269 lacs during the financial year under review. Pursuant to Section 123 of the Companies Act, 2013 read with Companies (Declaration and Payment of Dividend), Rules, 2014, a Company is required to set off accumulated losses of previous years / depreciation not provided in previous years against profits of the current year before declaration of any dividend. Since there is an accumulated debit balance of Rs.139,601 lacs in the profit and loss account of the Company hence no dividend is recommended for the year under review.
The Board of your Company has approved the Dividend Distribution Policy of the Company in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) as applicable to the top 500 Listed Companies. The said Policy of the Company sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is available on the website of the Company viz. www.dishtv.in
BUSINESS OVERVIEW
According to the Economic Survey, the entertainment industry has been one of the fastest growing segments of the economy in the last two decades. It is projected to reach Rs.1,964 billion by 2019. Your company with its pioneering spirit continues to ride this wave and move from strength to strength.
In the year under review, your Company continued to make substantial profits to the tune of Rs.16,269 lacs. This was achieved with a sustained focus on the customer and working towards their needs and requirements. Introducing innovative packaging and making Hi-Definition (HD) more affordable were the key initiatives which ensured growth in gross subscribers.
With growing disposable income, growth and improvements in technology, our customersâ viewing devices also keep on improving and hence, their needs and expectations continue to evolve. At the other end of the spectrum, new customers are coming in with the digitization drive. Our ability to enhance content quality together with affordability, makes us the prime choice for customers across the country.
Dish TV strives to enhance viewing experience of a diverse audience and will continue to evolve with time and technology. This will also help us overcome the multiple challenges bound to come our way.
We will continue to empower our customers and transform their entertainment needs with the power of digitization, offering more channels, On Demand Services and Interactive Television Services. In addition, we ensure high quality of the received signal and uses a secure digital distribution system. Consumers can experience new improved services with enhanced quality.
Entertainment has emerged as one of the key human requirement and that has made the market more lucrative than ever. It has also made it more competitive than ever before. Bigger, stronger players will have a greater role to play in this market.
Dish TV will continue to offer a wide array of multibrand and multi product portfolio to suit the needs of different consumer segments. Competitiveness on the fronts of technology, content and price will be the key drivers of the brandâs affinity with its consumers. This three pronged focus will enable the company to expand its overall base and move existing customers up the value chain, enhancing ARPU. The introduction of a completely new & advanced interface will enhance the experience of subscribers manifold.
Dish TV has always endeavored to make entertainment accessible in the most convenient ways to the consumers. Recent technological advances are making it possible for entertainment to be available anytime anywhere. Your Company has tapped onto that trend with DishOnline. Going forward Dish TV will continue to strengthen its presence in this segment and meeting the requirements of its customers in this segment.
This year will be about giving more power in the hands of the customer. Greater value will be provided with the introduction of benefits on long term recharges. This would be a win-win situation for both subscriber and Company with the former saving money and the latter improving retention. Enhancing freedom by introducing flexibility has been given in the form of selecting individual channels to customize base packs. Finding means for maximizing value for the customer will always be the never ending quest which drives each and every employee of the company.
SUBSIDIARIES AND ASSOCIATE OPERATIONS
Subsidiary in Sri Lanka:
Your Company, upon the approval of Board of Directors, incorporated a Joint Venture (âJVâ) Company with Satnet (Private) Limited, a Company incorporated under the Laws of Sri Lanka, in the name and style of âDish T V Lanka (Private) Limitedâ for providing Direct to Home Services in Sri Lanka, on April 25, 2012 with a paid up share capital of 1 million Sri Lankan Rupees. Your Company holds 70% of the paid-up share capital and Satnet (Private) Limited holds 30% of the paid-up share capital in Dish T V Lanka (Private) Limited. Dish T V Lanka (Private) Limited has commenced the operations under the requisite licenses and permissions obtained from regulatory authorities. The Company has also been registered as a Board of Investment (â BO Iâ) approved Company in Sri Lanka. The registration with BOI grants various benefits to the Company including duty free imports of the equipment and set top box for one year, tax holiday of 7 years etc.
Subsidiary in India:
Your Company, upon the approval of Board of Directors and the Members of the Company, acquired the entire share capital of Xingmedia Distribution Private Limited (âXingmediaâ) on March 24, 2014. Upon requisite approvals, the name of Xingmedia has been changed to âDish Infra Services Private Limitedâ (âDish Infraâ). Post approval of Members of the Company by way of Special Resolution passed by Postal Ballot, the non-core business of the Company (undertaking pertaining to the provision of infra support services to the subscribers for facilitating the DTH services including the instruments which are required for receiving DTH signals such as set top boxes(STB), dish antenna, Low Noise Boxes (LNB) and other customer related services including call centre services and repairs) has been transferred to Dish Infra with effect from April 1, 2015.
Upon nomination by the Company, one Independent Director of the Board has been appointed as an Independent Director on the Board of Dish Infra (Companyâs material non-listed Indian Subsidiary) in compliance with the provisions of Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Associate Company in India:
Your Company, upon the approval of Board of Directors incorporated an Associate Company in the name and style of âC&S Medianet Private Limitedâ on May 5, 2016. C&S Medianet Private Limitedâs initial paid up capital is Rs.100,000. Your Company holds 48% of the initial capital and Siti Cable Network Limited also hold 48% of the initial capital. The said Company shall act as a negotiating agency for Content / Advertisement Sales / Carriage etc. for the television channel distribution industry (DTH and Cable). The said Company is yet to commence its operations.
Apart from the above, no other Subsidiary / Joint-venture / Associate was formed or divested during the financial year 2016-17.
Audited Accounts of Subsidiary Companies:
Your Company has prepared the Audited Consolidated Financial Statements in accordance with Section 129(3) of the Companies Act, 2013 read with applicable Accounting Standards and Listing Regulations, 2015. The statement pursuant to Section 129(3) of Companies Act, 2013 and Rule 5 of Companies (Accounts) Rules, 2014 highlighting the summary of the financial performance of the subsidiaries is annexed to this Report.
As required under the Accounting Standard 21 -âConsolidated Financial Statementsâ, issued by the Institute of Chartered Accountants of India (â IC AIâ) and applicable provisions of the Listing Regulations, the Audited Consolidated Financial Statements of the Company reflecting the Consolidation of the Accounts of its subsidiaries are included in this Annual Report. Further, a statement containing the salient features of the financial statements of the subsidiaries and associate in the prescribed format AOC -1 is appended to this report.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of subsidiaries are available on the website of the Company viz. www.dishtv.in. These documents will also be available for inspection during business hours at the Registered Office of the Company.
Your Company has a policy for determining Material Subsidiaries. The Policy is disclosed on the Companyâs website viz. www.dishtv.in and is accessible at https:// www.dishtv.in/Pages/Investor/Corporate-Governance. aspx.
LISTING
Your Companyâs fully paid up equity shares continue to be listed and traded on National Stock Exchange of India Limited (âNSEâ) and BSE Limited (âBSEâ). Both these Stock Exchanges have nation-wide trading terminals and hence facilitates the shareholders/investors of the Company in trading the shares. The Company has paid the annual listing fee for the Financial Year 2017-18 to the said Stock Exchanges.
The Company has also paid the annual maintenance fee to the Luxembourg Stock Exchange in respect of its Global Depository Receipts (âGDRâ) for the year 2017.
DEPOSITORIES
Your Company has arrangements with National Securities Depository Limited (âNSDL) and Central Depository Services (India) Limited (âCDSLâ), the Depositories, for facilitating the members to trade in the fully paid up equity shares of the Company in Dematerialized form. The Annual Custody fees for the Financial Year 2017-18 has been paid to both the Depositories.
SHARE CAPITAL
During the year under review, your Company has allotted 1,04,070 fully paid equity shares, upon exercise of Stock Option by the eligible Employees of the Company, pursuant to the Employee Stock Option Scheme - 2007 (âESOP - 2007â) of the Company and these shares were duly admitted for trading on both the stock exchanges viz. NSE and BSE.
During the Financial Year 2008-09, your Company had come up with Right Issue of 518,149,592 equity shares of Rs.1 each, issued at Rs.22 per share (including premium of Rs.21 per share), payable in three installments. Upon receipt of valid second call money from the concerned shareholders, during the year under review, the Company converted 121 equity shares from Rs.0.75 each paid up to Rs.1 each fully paid up.
Pursuant to the issue of further equity shares under ESOP scheme and subsequent to conversion of partly paid equity shares, the paid up capital of your Company during the year has increased from Rs.1,06,58,51,431.75 (comprising of 1,06,58,30,337 fully paid up equity shares of Rs.1 each, 15,383 equity shares of Rs.1 each, paid up Rs.0.75 per equity share & 19,115 equity shares of Rs.1 each, paid up Rs.0.50 per equity sharejto Rs.1,06,59,55,532 (comprising of 1,06,59,34,528 fully paid up equity shares of Rs.1 each, 15,262 equity shares of Rs.1 each, paid up Rs.0.75 per equity share & 19,115 equity shares of Rs.1 each, paid up Rs.0.50 per equity share!.
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, your Board had authorized the Nomination and Remuneration Committee (formerly âRemuneration Committeeâ) to administer and implement the Companyâs Employees Stock Option Scheme (ESOP - 2007) including deciding and reviewing the eligibility criteria for grant and /or issuance of stock options under the Scheme. The ESOP Allotment Committee of the Board considers, reviews and allots equity shares to the eligible Employees exercising the stock options under the Employee Stock Option Scheme (ESOP - 2007) of the Company.
During the period under review, the Nomination and Remuneration Committee (formerly âRemuneration Committeeâ) of the Board granted 8,03,800 stock options to the eligible Employees as per the ESOP - 2007 Scheme of the Company. The Company, during the year, allotted 1,04,070 fully paid equity shares, upon exercise of the stock options by eligible Employees under the ESOP - 2007.
Applicable disclosures relating to Employees Stock Options as at March 31, 2017, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, are available on the website of the Company at https://www.dishtv.in/Pages/ Investor/Corporate-Governance.aspx. The ESOP-2007 Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.
Statutory Auditorsâ certificate to the effect that the ESOP - 2007 Scheme of the Company has been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company, as prescribed under Regulation 13 of the SEBI (Share Based Employee Benefits) Regulations, 2014, has been obtained and shall be available for inspection at the Annual General Meeting of the Company. Copy of the same shall also be available for inspection at the Registered Office of the Company on all working days (Monday to Friday) between 2.00 P.M. to 4.00 P.M. up to the date of Annual General Meeting of the Company.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs.113,992.91 Lacs, the Company has received a sum of Rs.113,988.63 Lacs towards the share application and call money(s) as at March 31, 2017.
The details of utilization of Rights Issue proceeds are placed before the Audit Committee and the Board on a quarterly basis. Further, the Company also provides the details of the utilization of Rights Issue proceeds to IDBI Bank Limited, the Monitoring Agency of the Company, on half yearly basis along with Auditorsâ Certificate on Utilization and furnishes the Monitoring Report to the Stock Exchanges.
The Board at its meeting held on May 28, 2009 approved to make changes in the manner of usage of right issue proceeds. The utilization of rights issue proceeds as on March 31, 2017, is as under:
|
Particulars |
Amount (Rs. In Lakhs) |
|
Repayment of loans |
28,421.44 |
|
Repayment of loans received after launch of the Rights Issue |
24,300.00 |
|
General Corporate Purpose |
34,722.67 |
|
Acquisition of Consumer Premises Equipment (CPE) |
26,000.00 |
|
Right Issue Expenses |
544.52 |
|
Total |
113,988.63 |
The half yearly Monitoring Reports issued by IDBI Bank Limited, the Monitoring Agency of the Company, was recorded by the Audit Committee and the Board at their respective meetings and necessary compliance in this regard had been carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (âGDRâ) Offer of the Company for 117,035 GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000 fully paid equity shares of the Company were fully subscribed by Apollo India Private Equity II (Mauritius) Limited. The underlying shares against each of the GDRs were issued in the name of the Depository - Deutsche Bank Trust Company Americas. As on March 31, 2017, NIL GDRs are outstanding, the underlying shares of which forms part of the existing paid up capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2017, is as under:
|
Particulars |
Amount (Rs. In Lakhs) |
|
Acquisition of FA including CPE |
7,669.88 |
|
GDR Issue Expenses |
344.63 |
|
Advance Against Share Application Money given to erstwhile Subsidiary |
56.14 |
|
Repayment of Bank Loans |
755.22 |
|
Operation Expenses including interest payment bank charges, exchange fluctuation |
51,541.39 |
|
Less: Interest earned-realized |
(439.94) |
|
Balance with non-scheduled bank |
270.76 |
|
Total |
60,198.08 |
REGISTERED OFFICE
During the year under review, the Board of Directors at their meeting held on August 12, 2016 approved shifting of the Registered Office of the Company to State of Maharashtra, Mumbai for ease of administration and cost effectiveness. The shifting was further approved by the Shareholders of the Company on September 19, 2016 by passing Special Resolution through Postal Ballot. After obtaining the necessary permission / approval of change of Registered Office from concerned authority (ies), the Registered Office of the Company was shifted from the National Capital Territory of Delhi to the state of Maharashtra, Mumbai with effect from November 3, 2016. Accordingly, the Registered Office of the Company is presently situated at 18th Floor, A Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai - 400013, Maharashtra.
CAPITAL REDUCTION - BY WAY OF REDUCTION OF SECURITIES PREMIUM ACCOUNT FOR WRITING OFF THE DEFICIT IN THE STATEMENT OF PROFIT & LOSS ACCOUNT
During the year under review, the Board of Directors of your Company had at its meeting held on May 23, 2016, approved the arrangement for reduction of the Securities Premium Account of the Company for writing off the deficit in the statement of Profit and Loss Account. The reduction in share capital (securities premium account) shall not prejudicially affect the Company or its Shareholders and would not in any way adversely affect the ordinary operations of the Company or the ability of the Company to honor its commitments that may arise in the ordinary course of business.
Upon receipt of No objection(s) of the Stock Exchanges to the said reduction and approval of Shareholders of the Company by passing Special Resolution through Postal Ballot on September 19, 2016, the Company had filed necessary application and petition with Honâble National Company Law Tribunal, Mumbai Bench (NCLT) for approval of the said Capital Reduction proposal.
The Honâble NCLT, vide its Order dated June 28, 2017, has approved the said reduction of share capital of the Company by way of utilizing the amount standing to the credit of the Securities Premium Account for writing off deficit in the statement of Profit and Loss account of the Company. Accordingly, the entire Securities Premium account amounting to Rs.15,43,39,65,550 (Rupees One Thousand Five Hundred Forty Three Crores Thirty Nine Lakhs Sixty Five Thousand Five Hundred and Fifty Only) as on March 31, 2016, shall stand reduced for writing off deficit in the statement of Profit and Loss Account of the Company. Post receipt of the said Order, necessary filings were made with the Stock Exchange(s) and Registrar of Companies.
SCHEME OF ARRANGEMENT FOR AMALGAMATION OF VIDEOCON D2H LIMITED INTO AND WITH DISH TV INDIA LIMITED
On November 11, 2016, the Board of Directors of your Company and Videocon d2h Limited (âVd2hâ) approved a scheme of arrangement (âSchemeâ) for the amalgamation of Vd2h into Dish TV India Limited and the execution of definitive agreements in relation to such amalgamation (the âTransactionâ). The draft Scheme pursuant to the provisions of Sections 391 to 394 of the Companies Act, 1956 and/or applicable sections of the Companies Act, 2013, read with rules thereto has been made with a view to reduce operational costs, increase operational efficiencies and enable optimal utilization of various resources as a result of pooling of financial, managerial and technical resources, and technologies of both the Companies.
Following the completion of the amalgamation process, subject to necessary approvals, your Company will be renamed as Dish TV Videocon Limited (âDish TV Videoconâ). Upon the Scheme becoming effective, your Company shall issue fully paid equity shares as provided for in the Scheme.
Upon receipt of No-objection(s) of the Stock Exchanges to the Scheme and approval of the Equity Shareholders of the Company at their meeting held on May 12, 2017, necessary petition was filed before the Honâble National Company Law Tribunal (NCLT), Mumbai for sanction of the Scheme. The scheme has also received the approval of Competition Commission of India, New Delhi for the said combination as embodied in the Scheme of Arrangement.
Further, the Board of Directors of both the Companies, in order to provide greater flexibility to the Scheme, at its meeting held on May 24, 2017 approved the proposal to amend the scheme by amending the clause 5.8.5 of the scheme. Pursuant to the said amendment, the GDSs to be issued by the Company pursuant to the Amalgamation can be listed on âLuxembourg Stock Exchange or London Stock Exchange or any Other Stock Exchangeâ. The said amendment was placed before the Honâble NCLT on June 7, 2017 for approval. During the hearing before the Tribunal, the said amendment was changed to âLuxembourg Stock Exchange or London Stock Exchangeâ.
The Honâble NCLT vide its Order dated July 27, 2017 approved the aforesaid Scheme. The certified copy of the said order is awaited. The Appointed date for the Scheme has been fixed on October 1, 2017.
The Company has already made an application to the Ministry of Information and Broadcasting (âMIBâ) for granting necessary permissions. Upon receipt of the MIB approval, the order of the Honâble NCLT shall be filed with the Registrar of Companies, post which the Scheme shall be effective from October 1, 2017.
The transaction is expected to create a leading cable and satellite distribution platform in India. The amalgamated Company would serve approximately 28 million net subscribers in India, out of a total of 181 million TV households in India, with significant room for growth.
Post completion of the Transaction, the equity shares of the amalgamated Company shall continue to be listed on NSE and BSE in India. The existing Vd2h ADR holders will be entitled to receive their new shares in the form of the GDRs, unless they elect to receive and hold the new shares directly, as part of the scheme.
REGISTRAR & SHARE TRANSFER AGENT
The Registrar & Share Transfer Agent (âRTAâ) of the Company was changed from Sharepro Services (India) Private Limited to Link Intime India Private Limited, with effect from July 1, 2016 pursuant to restraining order issued by SEBI against the erstwhile RTA. During the year under review, Link Intime India Private Limited, the present RTA of the Company shifted their registered office from C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (West), Mumbai 400 078 to their own premises at C 101, 247 Park, LBS Marg, Vikhroli (West), Mumbai - 400 083, Maharashtra.
Requisite proposal seeking shareholdersâ approval for maintaining Register & Index of Equity Shareholders, Register of Transfer and other Registers including Annual Return at the new office of the RTA forms part of Notice of ensuing Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis report as provided under Listing Regulations is separately attached hereto and forms an integral part of this Annual Report. The said report gives details of the overall industry structure, economic developments, performance and state of affairs of your Companyâs business and other material developments during the financial year under review.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with requirements of Section 135 of the Companies Act, 2013, your Company has a duly constituted Corporate Social Responsibility Committee (CSR Committee) comprising of five members including three Independent Directors.
Your Company has adopted a unified approach towards CSR at Group level, wherein CSR contributions of eligible group entities are pooled in, to fund high cost long-term projects that help build Human capital and create lasting impact on the society. The Committee has approved the CSR Policy with Education, Health Care, Women Empowerment and Sports as primary focus area. During the year under review, a Section 8 Company in the name of Dr. Subhash Chandra Foundation was established at Group level and the Company had contributed to the said foundation towards Groupâs Educational infrastructure development project at Hisar, Haryana.
A detailed report on Corporate Social Responsibility activities initiated by the Company during the year under review, in compliance with the requirements of Companies Act, 2013, is annexed to this report.
POSTAL BALLOT
During the year under review, your Company sought the approval of the Shareholders on the following matters, vide Postal Ballot Notice dated August 12, 2016:
- Special Resolution for Reduction of Capital (Securities Premium Account).
- Special Resolution for Shifting of Registered Office of the Company from the National Capital Territory of Delhi to the State of Maharashtra, Mumbai.
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E-Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The result on the voting conducted through Postal Ballot process was declared on September 22, 2016.
The procedure prescribed under Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, was adopted for conducting the Postal Ballot.
Further, details related to the Postal Ballot procedure adopted, voting pattern and result thereof have been provided under the General Meeting Section of âReport on Corporate Governanceâ.
CORPORATE GOVERNANCE AND POLICIES
âCorporate Governanceâ is an ethically driven business process that is committed to values aimed at enhancing an organizationâs brand and reputation in order to achieve the objectives of the organization transparently. This is ensured by taking ethical business decisions and conducting business with a commitment to values, while meeting shareholderâs expectations.
Your Company believes that maintaining the highest standards of Corporate Governance is imperative in its pursuit of leadership in the Direct to Home (âDTHâ) business. The Company continues to focus its resources, strengths and strategies to achieve its vision of continuing to be the leader in DTH Industry.
Your Company considers it an inherent responsibility to disclose timely and accurate information and also places high emphasis on best business practices and standards of governance besides strictly complying with the requirements applicable as per Listing Regulations and Companies Act, 2013.
In terms of Schedule V of Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company is attached and forms an integral part of this Annual Report. Management Discussion and Analysis Report and Business Responsibility Report as per Listing Regulations are presented in separate sections forming part of the Annual Report. The said Reports will also be available on the Companyâs website www.dishtv. in as part of the Annual Report.
Your Company is committed to benchmarking itself with global standards of Corporate Governance. It has put in place an effective Corporate Governance system which ensures that provisions of the Companies Act and Listing Regulations are duly complied with, not only in form but also in substance.
In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board has approved various Policies including Code of Conduct for Directors & Senior Management, Material Subsidiary Policy, Insider Trading Code, Document Preservation Policy, Material Event Determination and Disclosure Policy, Fair Disclosure Policy, Corporate Social Responsibility Policy, Whistle Blower and Vigil Mechanism Policy, Related Party Transaction Policy, Dividend Distribution Policy and Remuneration Policy. All these policies and codes have been uploaded on Companyâs website viz.www.dishtv.in and is accessible at https://www. dishtv.in/Pages/Investor/Corporate-Governance.aspx.
Additionally, Directors Familiarisation Programme and Terms and Conditions for appointment of Independent Directors can be viewed on Companyâs website viz. www.dishtv.in.
In compliance with the requirements of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee of your Board had fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limits, qualification / experience, areas of expertise and independence of individual.
The Audit Committee of the Board has been vested with powers and functions relating to Risk Management which inter aliaincludes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization; and (c) formulation, implementation and monitoring of the risk management plan.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Directors
As on March 31, 2017, your Board comprised of 6 Directors including 4 Independent Directors.
During the year under review, Mr. Eric Louis Zinterhofer, an Independent Director, tendered his resignation from the Board of the Company on account of him being resident of USA and not being able to attend the Board Meetings of the Company held in India. Mr. Zinterhofer resigned from the Board of the Company from the close of business hours of March 24, 2017. Your Board placed on record its appreciation for the contributions made by him during his tenure.
Pursuant to the Membersâ approval at the 26th Annual General Meeting held on September 29, 2014, Mr. Bhagwan Das Narang and Mr. Arun Duggal were appointed as Independent Directors of the Company for a term of 3 (three) consecutive years from the date of the 26th Annual General Meeting upto the 29th Annual General Meeting of the Company to be held in the calendar year 2017. Special Resolution seeking membersâ approval for appointing them as Independent Directors for the second term of 5 years from expiry of their current term forms part of the Notice of the ensuing Annual General Meeting. Your Company has received a notice in writing along with requisite deposit pursuant to Section 160 of Companies Act, 2013, proposing reappointment of Mr. Bhagwan Das Narang and Mr. Arun Duggal for second term and based on performance evaluation and contributions made by them, your Board recommends their appointment for the second term of 5 years from the date of the 29th Annual General Meeting upto the date of the 34th Annual General Meeting of the Company to be held in the calendar year 2022.
Mr. Ashok Kurien, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible has offered himself for re-appointment. Your Board recommends his re-appointment.
Further, Mr. Lakshmi Chand, an Independent Director on the Board of the Company tendered his resignation with effect from August 17, 2017, on account of his other engagements and pre-occupations. Your Board took note of the said resignation at its meeting held on August 17, 2017 and placed on record its appreciation for the contributions made by him during his tenure.
During the year under review, there was no change in the Key Managerial personnel of the Company. However, Mr. Arun Kumar Kapoor, Chief Executive Officer, tendered his resignation from the close of working hours of May 15, 2017. Your Board placed on record its appreciation for the contributions made by him during his tenure. Based on the recommendation of Nomination and Remuneration Committee your Board appointed Mr. Anil Kumar Dua as the Group Chief Executive Officer of the Company in place of Mr. Kapoor with effect from May 17, 2017.
In compliance with the requirements of Section 203 of the Companies Act, 2013, as on the date of this report, Mr. Jawahar Lal Goel, Managing Director and Chairman, Mr. Anil Kumar Dua, Chief Executive Officer, Mr. Rajeev Kumar Dalmia, Chief Financial Officer and Mr. Ranjit Singh, Company Secretary of the Company are Key Managerial Personnel of the Company.
Chairman
Mr. Jawahar Lal Goel, continues to be the Chairman and Managing Director of the Company. During the tenure of Mr. Goel as Managing Director, the Company has continuously maintained strong growth in terms of revenue as well as continued its stronghold on the Direct To Home (DTH) market share. The Company has made considerable progress in all the spheres and has achieved tremendous growth and acquired goodwill and reputation in the business. Mr. Goel has spearheaded the organization with strong zeal and commitment despite strong competitive intensity, rise of digital cable network, regulatory challenges and technological upheavals.
Mr. Goel has led your Company in a highly competitive and volatile market to not just consolidate its market leadership but also in shaping the future of your Company into a modern, technology & innovation-driven organisation.
Board Diversity
As on March 31, 2017, your Board comprises of 6 Directors including 4 Independent Directors (inclusive of 1 women Director). The Company recognizes and embraces the importance of a diverse Board in its success. The Board has also adopted the Board Diversity Policy.
Board Meetings
The Board met seven times during the Financial Year, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and Listing Regulations.
Declaration by Independent Directors
Independent Directors of the Company provide declarations, both at the time of appointment and annually, confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and the Listing Regulations. Your Company has received the said declarations from all the Independent Directors. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and Listing Regulations and are independent of the management.
Board Evaluation
A formal evaluation of the performance of the Board, itâs Committees, the Chairman and the individual Directors was carried out for the Financial Year 2016-17.
The Independent Directors of your Company, in a separate meeting held without presence of other Directors and management, evaluated the performance of the Chairman & Managing Director and other Non-Independent Directors along with performance of the Board/Board Committees based on various criteria recommended by Nomination & Remuneration Committee and âGuidance Note on Board Evaluationâ dated January 5, 2017 issued by SEBI. A report on such evaluation done by the Independent Directors was taken on record by the Board and further your Board, in compliance with requirements of Companies Act, 2013, evaluated performance of all Independent Directors based on various parameters including attendance, contribution etc.
Policy on Directorsâ appointment and remuneration
In compliance with the requirements of Section 178 of the Companies Act, 2013, the âNomination & Remuneration Committeeâ (NRC Committee) of your Board had fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limit, qualification / experience, areas of expertise and independence of individual. The Committee had also approved in-principle that the initial term of an Independent Director shall not exceed 3 years. Your Company has also adopted a Nomination, Appointment, Remuneration and Training Policy, salient features whereof is annexed to this report.
Further, pursuant to provisions of the Act, the NRC Committee of your Board has formulated the Remuneration Policy for the appointment and determination of remuneration of the Directors, Key Management Personnel, Senior Management and other Employees of your Company. The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive Directors of the Company.
The NRC Committee takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration packages and for administering the long-term incentive plans, such as ESOPs. Further, the compensation package of the Directors, Key Management Personnel, Senior Management and other employees are designed based on the set of principles enumerated in the said policy. Your Directors affirm that the remuneration paid to the Directors, Key Management Personnel, Senior Management and other employees is as per the Remuneration Policy of your Company.
The Remuneration details of the Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary, along with details of ratio of remuneration of each Director to the median remuneration of employees of the Company for the FY under review are provided as Annexure to this Report.
Familiarisation Programme for Independent Directors
During the year under review, to familiarize the Directors with strategy, operations and functions of the Company, the senior managerial personnel made presentations about Companyâs strategy, operations, product offering, market, technology, facilities and risk management. The Directors were also provided with relevant documents, reports and internal policies to enable them to familiarise with your Companyâs procedures and practices, from time to time, besides regular briefing by the members of the senior leadership team.
Also the Board including all Independent Directors were given a detailed presentation on March 24, 2017 by J. Sagar Associates on various aspects of Companies Act, 2013, Listing Regulations including Roles and Duties of Directors, Procedural Aspects & provisions relating to merger, Insider Trading Regulations etc.
Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining their duties and responsibilities as a Director.
Detail of familiarisation program organized for Independent Directors during FY under review form part of Corporate Governance Report annexed hereto and are also posted on the Companyâs website viz. www.dishtv. in and can be viewed on the following link: https://www. dishtv.in/Pages/Investor/Corporate-Governance.aspx.
Committees of the Board
In compliance with the requirements of Companies Act, 2013 and Listing Regulations your Board had constituted various Board Committees including Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. As on March 31, 2017, the Audit Committee of the Board consisted of Mr. B D Narang, an Independent Director as the Chairman of the Committee and Mr. Arun Duggal and Mr. Lakshmi Chand, both Independent Directors as its members.
Details of the constitution of these Committees, which are in accordance with regulatory requirements, have been uploaded on the website of the Company viz. www.dishtv.in. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.
Vigil Mechanism
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle Blower Policy which provides a robust framework for dealing with genuine concerns & grievances. The Policy provides opportunity to Directors/ Employees/Stakeholders of the Company to report concerns about unethical behavior, actual or suspected fraud of any Director and/or Employee of the Company or any violation of the Code of Conduct. Further during the year under review, no case was reported under the Vigil Mechanism. During Financial Year 2016-17, no individual was denied access to the Audit Committee for reporting concerns, if any.
AUDITORS
Statutory Auditors
At the 26th Annual General Meeting of the Company held on September 29, 2014, M/s. Walker Chandiok & Co. LLP, Chartered Accountants, Gurgaon, having Registration No 001076N/N-500013 were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 29th Annual General Meeting. In terms of Section 139 of the Companies Act, 2013 and the rules made thereunder re-appointment of the Statutory Auditors for the second term would require approval of the Shareholders at their meeting. The Board, on recommendation of the Audit Committee, has proposed to the members, the re-appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, New Delhi, (Firm Registration No. 001076N/N-500013) as Statutory Auditorsâ of the Company, for second term for a period of Five (5) consecutive years to hold office from the date of 29th Annual General Meeting until the conclusion of the 34th Annual General Meeting of the Company to be held in the calendar year 2022 and also to fix their remuneration.
In this regard, the Company has received necessary consent and certificate from M/s Walker Chndiok & Co LLP, Chartered Accountants, New Delhi, to the effect that their re-appointment, if made will be in accordance with Section 141 of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014.
Your Board is of the opinion that continuation of M/s Walker Chandiok & Co. LLP, Chartered Accountants, as Statutory Auditors will be in the best interests of the Company and therefore Members are requested to consider the their re-appointment as Statutory Auditors of the Company.
Secretarial Auditor
During the year, the Board re-appointed Mr. Jayant Gupta, Practicing Company Secretary, proprietor of M/s Jayant Gupta & Associates, Company Secretaries as the Secretarial Auditor of the Company for conducting the Secretarial Audit for the financial year 2016-17. The Secretarial Audit was carried out in compliance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The reports of Statutory Auditor and Secretarial Auditor forming part of this Annual report do not contain any qualification, reservation or adverse remarks. During the year the Statutory Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under the applicable provisions of the Act.
Cost Auditor
In compliance with the requirements of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, M/s Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, were engaged to carry out Audit of Cost Records of the Company for the Financial Year 2016-17. The Board of your Company on the basis of the recommendation of the Audit Committee, had approved the re-appointment of M/s Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, as the Cost Auditors for the financial year ending March 31, 2018 on the same terms and conditions including remuneration.
Requisite proposal seeking ratification of remuneration payable to the Cost Auditor for the Financial Year 2016-17 as well as for the Financial Year 2017-18 by the Members as per Rule 14 of Companies (Audit and Auditors) Rules, 2014, forms part of the Notice of ensuing Annual General Meeting.
Reporting of frauds by Auditors
During the year under review, the Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this report.
DISCLOSURES:
i. Particulars of Loans, guarantees and investments:
Particulars of Loans, guarantees and investments made by the Company required under Section 186(4) of the Companies Act, 2013 and the Listing Regulations are contained in Note no. 49 to the Standalone Financial Statement.
ii. Borrowings and Debt Servicing: During the year under review, your Company has not accepted any Loans.
iii. Transactions with Related Parties: All related party transactions are placed before the Audit Committee for its approval and statement of all related party transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions along with arms-length justification. All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Armâs Length basis. During the year under review, there have been no materially significant related party transactions as defined under Section 188 of the Act and Regulations 23 the Listing Regulations and accordingly no transactions are required to be reported in Form AOC-2 as per Section 188 of the Companies Act, 2013.
iv. Internal Financial Controls and their adequacy:
Your Company has a robust and well embedded system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorised use or disposition and all financial transactions are authorised, recorded and reported correctly. Your Company has approved internal financial controls and policies / procedures to be adopted by the Company for orderly and efficient conduct of the business including safeguarding of assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.
v. Deposits: Your Company has not accepted any public deposit under Chapter V of the Companies Act, 2013.
vi. Transfer to General Reserve: During the Financial Year under review, no amount has been transferred to the General Reserve of the Company
vii. Extract of Annual Return: The extract of Annual return in form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report.
viii. Sexual Harassment: The Company has zero tolerance for Sexual Harassment at workplace and has adopted a Policy on prevention of Sexual Harassment in line with the provisions of âThe Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redresssal) Act, 2013â and the Rules made thereunder. There was no complaint on sexual harassment during the year under review.
ix. Regulatory Orders: No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Companyâs operations in future.
CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
Your Company is in the business of providing Direct-to- Home (âDTHâ) services. Since the said activity does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are not applicable.
However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy consumption and every endeavor is made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.
Technology Absorption:
In its endeavor to deliver the best to its viewers and business partners, your Company is constantly active in harnessing and tapping the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are given in Note no. 27, 28 and 29 to the notes to the Accounts forming part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Your Company has been successful in attracting best of the talent from industry and academic institutions and has been effectively retaining them. The talent base of your Company has steadily increased and your Company has created a favorable work environment following the SAMWAD philosophy which encourages innovation, meritocracy and team collaboration. The Company is committed to nurturing, enhancing and retaining talent through superior Learning & Organization Development interventions. During the year, various programmes were initiated to upgrade the skill of the human resource of the Company. Your company also initiated interventions to align employees to companyâs stated vision and core values.
Your Company believes that committed employees are vital for the sustained growth of the Company. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your Company has established policies and procedures to discover and use the employeesâ capabilities and potential to increase their commitment and contribution to the overall organization.
The Company has a robust appraisal system based on MBO (Management by Objectives) philosophy with specified SLAs for each KRA. KRAs are set and appraisals are done following a top down approach and open performance discussions. We encourage meritocracy and reward excellence in performance. The employees display highest level of business integrity and ethics in their business conduct.
Your Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, cooperation and support have enabled the Company to cross milestones on a continual basis.
PARTICULARS OF EMPLOYEES
As on March 31, 2017, the total numbers of permanent employees on the records of the Company were 394. The information required under Section 197 of the Companies Act, 2013 (âActâ) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under the said rules is annexed to this report.
DIRECTORSâ RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 134 of the Companies Act, 2013, in relation to the Annual Financial Statements for the Financial Year 2016-17, your Directors state and confirm that:
a) The Financial Statements of the Company -comprising of the Balance Sheet as at March 31, 2017 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same;
b) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017, and, of the profit of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;
d) Requisite internal financial controls were laid down and that such financial controls are adequate and operating effectively; and
e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
RISK MANAGEMENT SYSTEM & INTERNAL CONTROL SYSTEMS
Your Company follows a comprehensive system of Risk Management. It has adopted a policy and procedure for rapid identification, definition of risk mitigation plans and execution. Actions include adjustments in prices, dispatch plan, inventory build-up, and active participation in regulatory mechanisms. Many of these risks can be foreseen through systematic tracking. Major risks can be categorised across following:
1. Changes in regulations
2. Market contraction due to macro-economic factors
3. Socio-economic-political disruptions
Your Company has an effective internal control and risk mitigation system, which is constantly assessed and strengthened with standard operating procedures and which ensures that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. The Company has laid down procedures to inform audit committee and board about the risk assessment and mitigation procedures, to ensure that the management controls risk through means of a properly defined framework. The internal control systems of your Company ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.
Your Company has in place adequate internal financial controls with reference to financial statements. Based on internal financial control framework and compliance systems established in the Company, the work performed by statutory, internal and secretarial auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2016-17. During the year, no reportable material weakness in the design or operation was observed.
Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.
The Company also has an Audit Committee, presently comprising of 3 (three) Non-Executive professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors and Auditees in dealing with matters within its terms of reference. The Committee inter alia deals with accounting matters, financial reporting and internal controls which also periodically reviews the Risk Management Process.
INSIDER TRADING CODE
In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (âthe PIT Regulationsâ) on prevention of insider trading, your Company had instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.
Your Company has further put in place a Code of practices and procedures of fair disclosures of unpublished price sensitive information. Both the aforesaid Codes are in line with the PIT Regulations.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report (âBRRâ) has been prepared and forms part of the Annual Report as Annexure. The Report provides an overview of initiatives taken by your Company.
RATINGS
ICRA Limited, a Credit rating agency, has during the year under review assigned ICRA A (ICRA A plus) rating to Dish Infra Services Private Limited (Companyâs wholly owned subsidiary) for the Long Term Loans and ICRA A / ICRA A1 for long-term/ short-term interchangeable facilities. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lower credit risk.
CARE (Credit Analysis and Research Limited), a Credit rating agency has assigned the rating of CARE A (SO) to Dish Infra Services Private Limited (Companyâs wholly owned subsidiary) for its Non-Convertible Debenture and CARE A (SO)/CARE A1 (SO) for Bank Facilities. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lower credit risk.
CRISIL Limited, a credit rating agency, has during the year assigned CRISIL A- (CRISIL A minus rating with Positive implications) to Dish Infra Services Private Limited (Companyâs wholly owned subsidiary) for the Long term Facilities/Non-Convertible Debentures. Instrument with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instrument carry low credit risk.
INDUSTRIAL OPERATIONS
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across the organization.
CAUTIONARY STATEMENT
Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companyâs objectives, projections, estimates and expectations, may constitute âforward looking statementsâ within the meaning of applicable laws and regulations and actual results might differ.
ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. Your Directors value the professionalism and commitment of all employees of the Company and place on record their appreciation of the contribution made by employees of the Company and its subsidiaries at all levels that has contributed to your Companyâs success. Your Directors acknowledge with sincere gratitude the co-operation and support extended by the Central and State Governments, the Ministry of Information and Broadcasting (âMIBâ), the Department of Telecommunication (âDOTâ), Ministry of Finance, the Telecom Regulatory Authority of India (âTRAIâ), the Stock Exchanges and other stakeholders including employees, subscribers, vendors, bankers, investors, service providers as well as other regulatory and government authorities.
Your Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued stakeholders.
For and on behalf of the Board
Jawahar Lal Goel B. D. Narang
Chairman & Managing Director Independent Director
DIN: 00076462 DIN: 00826573
Place: Noida
Date: August 17, 2017
Mar 31, 2015
The Directors are pleased to present the 27th (Twenty Seventh) Annual
Report and the Audited Financial Statements of the Company for the
Financial Year ended March 31, 2015.
FINANCIAL RESULTS
The Financial Performance (Standalone) of your Company for the
Financial Year ended March 31, 2015 is summarized below:
(Rs. In Lakhs)
Particulars Year ended Year ended
March 31, 2015 March 31, 2014
Sales & Services 278,164 250,898
Other Income 5,468 6,602
Total Income 283,632 257,500
Total Expenses 283,531 261,284
Profit/(Loss) before Tax & 101 (3,784)
Prior Period Item
Prior Period Item - (11,637)
Profit/(Loss) before Tax 101 (15,421)
Provision for Taxation (net) - -
Profit/(Loss) after Tax 101 (15,421)
Profit/(Loss) for the Year 101 (15,421)
Add: Balance brought (197,225) (181,804)
forward
Adjustment for (738) -
depreciation
Amount available for (197,862) (197,225)
appropriations
Balance Carried Forward (197,862) (197,225)
There have been no material changes and commitments that have occurred
after close of the financial year till the date of this report, which
affect the consolidated financial position of the Company.
DIVIDEND
The Board takes the pleasure to report that your Company becomes the
first Indian Direct To Home ('DTH') operator to have profits in a
financial year. With sustained focus on the business, your Company has
reported a profit of Rs. 101.45 Lacs during the financial year under
review. However, with a view to conserve the resources for future
business requirements and expansion plans, your Directors are of view
that the current year's profits be ploughed back into the operations
and hence no dividend is recommended for the year under review.
BUSINESS OVERVIEW
The Financial Year 2014-15 has been a year of outstanding performance
for Dish TV. By executing clear and consistent strategies, the company
has delivered strong operational growth and excellent financials -
making it the first DTH Brand to turn profitable. The year under review
witnessed increase in all folds including gross revenue, gross
subscriber base, EBITDA and ARPU and Net Profit.
Dish TV offers a wide array of multi-brand and multi product portfolio
to suit the needs of different consumer segments. It has been a
conscious effort of your Company to lead on the content front for both
HD and SD channels. Continuing to lead the category with largest
bouquet of 43 HD channels, dishtruHD has taken the HD TV viewing
experience to the next level whilst also building a high-ARPU base of
HD users that helps in retention too. Evaluating the increase in trend
on the usage of recording, Dish TV now only offers recorder ready
set-top boxes which allows Indian consumers to taste the power of
pause/play and other recording features. With the up-gradation of
customers from Standard Definition (SD) to High Definition (HD) and
uptake from new launches, the Company expects to see an increasing
trend in the ARPU. The introduction of long term offers on recharges,
will aid retention.
Amongst several initiatives taken this year, the big success story is
attributed to Zing Digital. With the launch of ZING, Dish TV forayed
into a regionally customized DTH service which provides an opportunity
to maximize its foothold as DAS rolls out further into phases 3 and 4,
covering small towns and rural markets. Zing digital is now present in
West Bengal, Tripura & 3 districts of Assam, Orissa, Maharashtra,
Andhra Pradesh, Tamil Nadu and Kerala. Thinking ahead of the curve,
Dish TV created an entirely new offering for consumers whose needs are
largely regionally driven content and shop for pocket friendly
subscription alternates. ZING brand is positioned comfortably between
the DTH offering of Doordarshan on the one hand and pay DTH brands on
the other, offering customized regional content at value for money
prices. Understanding the target group was the key in introducing Zing
Digital. The consumer in this segment has a high propensity intake for
regional content and their purchase behavior, therefore, too is driven
by an offering of maximum regional & relevant content rather than the
entire bouquet of content which turns out to be an expensive
proposition for them.
With launch of the Direct to Home services in Sri Lanka by Dish T V
Lanka (Private) Limited, subsidiary of your Company, the brand - Dish
TV has now become a multi-national brand. This is a case in point
having the most exhaustive distribution network plan charted for the
region and the next stepping stone for the brand.
Being the pioneer, the effort of Dish TV has always been to make
entertainment accessible in the most convenient of ways to the
consumers. A few examples of such offerings are - DishOnline, stemming
from high penetration of smart phones and internet, the Indian consumer
today is spending increasing time on alternate screens like the laptop,
tablet & smartphone, away from the conventional TV viewing.
Understanding the new dynamics of evolving consumer trends of
multi-screen behavior, this product provides LIVE TV, on-demand movies,
catch- up TV & Video shows at the press of a button on the app.
Introducing value added services (VAS) like Anandam and Music Active,
enticing today's consumer who wants more from his TV entertainment.
Music Active service fulfills the need of music-lovers by providing
music across 10 genres 24X7. Do It Yourself services empower the
consumer to take complete control of his entertainment needs, whether
it's about online recharge, adding a channel, tracking account details,
activating a service and much more; via easy modes like Missed Call,
SMS and Online.
With the increase in number of "more than one TV households", the focus
lies on expanding the subscriber base with multi TV connections. Multi
TV connections empower the consumer to enjoy their entertainment on
their second TV set at less than half the pack price versus their
subscription on the first TV. Initiatives like these have consistently
made Dish TV, India's Most Trusted Brand for the consecutive 3 years in
a row. To take it further, this year Dish TV made inroads at the
international level as a brand by winning 3 awards at the most
prestigious advertising awards festival, Cannes Lions.
During the year under review, your Company continued to engage
subscribers by providing wholesome entertainment experience through
relevant content, on demand services and the door step service &
support. The positive effect of the steps taken by the Company coupled
with the continuous efforts to control the costs yielded positive
results in all fronts of the business. It also provided an edge over
competition and the benefit of such service infrastructure will yield
benefit in coming years. Your Company continued to play the role of the
leader of the industry with bringing new and innovative products and
services into the category and setting benchmarks for others to follow.
Dish TV has built and continues to sustain abundant capacity, beaming
from 2 different satellites, offering the largest bouquet of content.
All this packaged at consumer friendly tiers that suit diverse consumer
needs for content across different genres and languages.
Growth would be supreme and so will be the revenues making Dish TV
surely a brand to reckon with as we strive to enhance consumers TV
viewing experience.
SUBSIDIARY OPERATIONS
Subsidiary in Sri Lanka
Your Company, upon the approval of Board of Directors, incorporated a
Joint Venture ('JV') Company with Satnet (Private) Limited, a Company
incorporated under the Laws of Sri Lanka, in the name and style of
'Dish T V Lanka (Private) Limited' for providing Direct to Home
Services in Sri Lanka, on April 25, 2012 with a paid-up share capital
of 1 million Sri Lankan Rupees. Your Company holds 70% of the paid-up
share capital and Satnet (Private) Limited holds 30% of the paid- up
share capital. Dish T V Lanka (Private) Limited has received the
requisite licenses and permissions from regulatory authorities and has
commenced its commercial operations. The Company has also been
registered as a Board of Investment ('BOI') approved Company in Sri
Lanka. The registration with BOI grants various benefits to the company
including duty free imports of the equipment and set top box for one
year, tax holiday of 7 years etc.
Subsidiary in India
Your Company, upon the approval of Board of Directors and the Members
of the Company, acquired the entire share capital of Xingmedia
Distribution Private Limited ('Xingmedia') on March 24, 2014. Upon
requisite approvals, the name of Xingmedia has been changed to 'Dish
Infra Services Private Limited' ('Dish Infra'). Post approval of
Members of the Company by way of Special Resolution passed by Postal
Ballot, the entire non-core business of the Company (undertaking
pertaining to the provision of infra support services to the
subscribers for facilitating the DTH services including the instruments
which are required for receiving DTH signals such as set top
boxes(STB), dish antenna, Low Noise Boxes (LNB) and other customer
related services including call centre services and repairs) has been
transferred to Dish Infra with effect from April 1, 2015. Dish Infra
has commenced its commercial operations (including call center and back
end support service to the Company) in the first quarter of the
Financial Year 2015-16.
Upon nomination by the Company, an Independent Director of the Board
has been appointed as an Independent Director on the Board of Dish
Infra (Company's material non-listed Indian Subsidiary) in compliance
with the provisions of the listing agreement.
Audited Accounts of Subsidiary Companies
The Company has prepared the Audited Consolidated Financial Statements
in compliance with applicable Accounting Standards and the Listing
Agreement that forms part of this Annual Report. The Statement pursuant
to Section 129(3) of Companies Act, 2013, and Rule 5 of Companies
(Accounts) Rules, 2014 highlighting the summary of the financial
performance of the subsidiaries is annexed to this Report. The Audited
Financial Statements and related information of the Subsidiaries will
be made available to any member, upon request, and shall also be open
for inspection at the Registered Office of the Company.
As required under the Accounting Standard AS-21 Â 'Consolidated
Financial Statements', issued by the Institute of Chartered Accountants
of India ('ICAI') and applicable provisions of the Listing Agreement
with the Stock Exchange(s), the Audited Consolidated Financial
Statements of the Company reflecting the Consolidation of the Accounts
of its subsidiaries to the extent of equity holding in these Companies
are included in this Annual Report.
During the year the Board of Directors has formulated a policy for
determining Material Subsidiaries. The Policy is disclosed on the
Company's website and is accessible at
http://www.dishtv.in/Pages/Investor/ Corporate-Governance.aspx
LISTING
Your Company's fully paid up equity shares continue to be listed and
traded on National Stock Exchange of India Limited ('NSE') and BSE
Limited ('BSE'). Both these Stock Exchanges have nation-wide terminals
and hence facilitates the shareholders/investors of the Company in
trading the shares. The Company has paid the annual listing fee for the
Financial Year 2015- 16 to the said Stock Exchanges.
The Company also paid the annual listing fee to the Luxembourg Stock
Exchange in respect of its Global Depository Receipts ('GDR').
DEPOSITORIES
Your Company has arrangements with National Securities Depository
Limited ('NSDL) and Central Depository Services (India) Limited
('CDSL'), the Depositories, for facilitating the members to trade in
the fully paid up equity shares of the Company in Dematerialized form.
The Annual Custody fees for the Financial Year 2015-16 shall be paid to
both the Depositories on receipt of invoices from them.
SHARE CAPITAL
During the year under review, your Company has allotted 616,820 fully
paid equity shares, upon exercise of Stock Option by the eligible
Employees of the Company, pursuant to the Employee Stock Option Scheme
- 2007 ('ESOP - 2007') of the Company and these shares were duly
admitted for trading on the stock exchanges viz NSE and BSE.
During the Financial Year 2008-09, your Company had come up with Right
Issue of 518,149,592 equity shares of Rs. 1 each, issued at Rs. 22 per
share (including premium of Rs. 21 per share), payable in three
installments. Upon receipt of valid first and second call money from
the concerned shareholders, during the year under review, the Company
converted 50 equity shares from Rs. 0.50 each paid up to Rs. 0.75 each paid
up and 250 equity shares from Rs. 0.75 each paid up to Rs. 1 each fully
paid up.
Pursuant to the issue of further equity shares under ESOP scheme and
subsequent to conversion of partly paid equity shares, the paid up
capital of your Company during the year has increased from Rs.
1,064,934,215.75 (comprising of 1,064,902,570 fully paid up equity
shares of Rs. 1 each & 22,193 equity shares of Rs. 1 each, paid up Rs. 0.75
per equity share & 30,002 equity shares of Rs. 1 each, paid up Rs. 0.50 per
equity share) to Rs. 1,065,551,110.75 (comprising of 1,065,519,640 fully
paid up equity shares of Rs. 1 each & 21,993 equity shares of Rs. 1 each,
paid up Rs. 0.75 per equity share & 29,952 equity shares of Rs. 1 each,
paid up Rs. 0.50 per equity share)
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, as amended from time to time, your Board had authorized the
Nomination and Remuneration Committee (formerly 'Remuneration
Committee') to administer and implement the Company's Employees Stock
Option Scheme (ESOP Â 2007) including deciding and reviewing the
eligibility criteria for grant and /or issuance of stock options to the
eligible Employees / Independent Directors under the Scheme. The ESOP
Allotment Committee of the Board considers, reviews and allots equity
shares to the eligible Employees / Independent Directors exercising the
stock options under the Employee Stock Option Scheme (ESOP Â 2007) of
the Company.
During the period under review, the Nomination and Remuneration
Committee (formerly 'Remuneration Committee') of the Board granted
207,500 stock options to the eligible Employees as per the ESOP Â 2007
of the Company. The Board of Directors, during the year, allotted
616,820 fully paid equity shares, upon exercise of the stock options by
eligible Employees under the ESOP Â 2007.
Applicable disclosures relating to Employees Stock Options as at March
31, 2015, pursuant to Clause 12 (Disclosure in the Directors' Report)
of the SEBI (Employees Stock Option Scheme and Employees Stock Purchase
Scheme) Guidelines, 1999, as amended from time to time, are set out in
the Annexure to this Report.
Statutory Auditors' certificate to the effect that the ESOP Â 2007
Scheme of the Company has been implemented in accordance with the SEBI
Guidelines and as per the resolution passed by the members of the
Company, as prescribed under Clause 14 of the said Guidelines, has been
obtained and shall be available for inspection at the Annual General
Meeting of the Company. Copy of the same shall also be available for
inspection at the Registered Office of the Company.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs. 113,992.91 Lakhs, the Company
has received a sum of Rs. 113,986.35 Lakhs towards the share application
and call money(s) as at March 31, 2015.
The details of utilization of Rights Issue proceeds are placed before
the Audit Committee and the Board on a quarterly basis. Further, the
Company also provides the details of the utilization of Rights Issue
proceeds to IDBI Bank Limited, the Monitoring Agency of the Company, on
half yearly basis along with Auditors' Certificate on Utilization and
furnishes the Monitoring Report to the Stock Exchanges.
The Board at its meeting held on May 28, 2009 approved to make changes
in the manner of usage of right issue proceeds. The utilization of
rights issue proceeds as on March 31, 2015, is as under:
Particulars Amount
(Rs.In Lakhs)
Repayment of loans 28,421.44
Repayment of loans received after 24,300.00
launch of the Rights Issue
General Corporate Purpose 34,720.40
Acquisition of Consumer Premises 26,000.00
Equipment (CPE)
Right Issue Expenses 544.52
Total 113,986.36
The half yearly Monitoring Reports issued by IDBI Bank Limited, the
Monitoring Agency of the Company, containing deviation from the
original proposed expenditure plan and in accordance with the approved
revised plan was recorded by the Audit Committee and the Board at their
respective meetings and necessary compliance in this regard had been
carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt ('GDR') Offer of the Company for 117,035
GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000
fully paid equity shares of the Company were fully subscribed by Apollo
India Private Equity II (Mauritius) Limited. The underlying shares
against each of the GDRs were issued in the name of the Depository -
Deutsche Bank Trust Company Americas. As on March 31, 2015, 85,035 GDRs
have remained outstanding, the underlying shares of which forms part of
the existing paid up capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2015, is as
under:
Particulars Amount
(Rs. In Lakhs)
Acquisition of FA including CPE 7,669.88
GDR Issue Expenses 344.63
Advance Against Share Application
Money given to erstwhile Subsidiary 56.14
Repayment of Bank Loans 755.22
Operation Expenses including
interest payment bank charges,
exchange fluctuation 21,819.05
Less: Interest earned-realized (439.94)
Balance with non-scheduled bank 27,570.40
Total 57,775.37
NON CONVERTIBLE DEBENTURES
Your Company had issued and allotted 200 (Two Hundred Only) Rated,
Unlisted, Secured, Redeemable Non-Convertible Debentures ("NCDs") of
the Face value of Rs. 1,00,00,000/-(Rupees One Crores Only) each, for
cash, aggregating to Rs. 200,00,00,000/-(Rupees Two Hundred Crores Only)
on Private Placement basis on October 1, 2014. Credit Rating
Information Services of India Limited (CRISIL) has assigned an 'A-'
rating which signifies that the debentures are considered to have
adequate degree of safety regarding timely servicing of financial
obligations and carry low credit risk.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review
as provided under Clause 49 of the Listing Agreement with the Stock
Exchanges is separately attached hereto and forms a part of this Annual
Report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with requirements of Section 135 of the Companies Act,
2013, your Company has constituted a Corporate Social Responsibility
Committee (CSR Committee). The CSR Committee comprises of two
Independent Directors and the Managing Director. The Committee has
approved the CSR Policy with Education, Health Care, Women Empowerment
and Sports as primary focus area. Your Company shall spend at least 2%
of the average net profits of the Company made during the three
immediately preceding Financial Years in pursuance of its Corporate
Social Responsibility Policy when the Company has net profits for a
period of three consecutive Financial Years. Since the Company
presently does not have profits for three consecutive Financial Years,
the annual report on CSR activities as prescribed under Companies
(Corporate Social Responsibility Policy) Rules, 2014 is not applicable.
POSTAL BALLOT
During the year under review, your Company sought the approval of the
Shareholders on the following matters, vide Postal Ballot Notice dated
July 22, 2014
- Special Resolution under Section 180(1)(c) of Companies Act, 2013 to
borrow upto RS. 3,000 crores over and above the paid-up share capital
and free reserves of the Company.
- Special Resolution under Section 180(1)(a) of Companies Act, 2013 for
creation of Charge/ mortgage on assets of the Company.
- Special Resolution under Section 42 and 71 of Companies Act, 2013 to
offer or invite subscription of non-convertible debentures on private
placement basis.
- Special Resolution under Section 186 of Companies Act, 2013 to
authorize the Board of Directors for making investment/giving any loan
or guarantee/providing security.
The said notice along with Postal Ballot Form and Business Reply
Envelopes were duly sent to the Shareholders and your Company also
offered E-Voting facility as an alternate option for voting by the
Shareholders, which enabled them to cast their votes electronically,
instead of Physical Postal Ballot Form. The result on the voting
conducted through Postal Ballot process was declared on September 10,
2014.
During the year under review, your Company also sought the approval of
the Shareholders on the following matters, vide Postal Ballot Notice
dated October 29, 2014.
- Special Resolution under Section 180(1)(a) of the Companies Act, 2013
to approve Sale/transfer of Company's Non-Core Business (including Set-
top boxes, Dish antenna and related services ) to its Wholly owned
Subsidiary , as a going concern basis.
The said notice along with Postal Ballot Form and Business Reply
Envelopes were duly sent to the Shareholders and your Company also
offered E-Voting facility as an alternate option for voting by the
Shareholders, which enabled them to cast their votes electronically,
instead of Physical Postal Ballot Form. The result on the voting
conducted through Postal Ballot process was declared on February 3,
2015.
The procedure prescribed under Section 110 of the Companies Act, 2013
read with the Companies (Management and Administration) Rules 2014, was
adopted for conducting the Postal Ballot.
Further, details related to the Postal Ballot procedure adopted, voting
pattern and result thereof have been provided under the General Meeting
Section of 'Report on Corporate Governance'.
CORPORATE GOVERNANCE
'Corporate Governance' is an ethically driven business process that is
committed to values aimed at enhancing an organization's brand and
reputation in order to achieve the objectives of the organization
transparently. This is ensured by taking ethical business decisions and
conducting business with a commitment to values, while meeting
shareholder's expectations. Corporate Governance is not just a
destination but a journey to constantly improve sustainable value
creation.
Your Company believes that a sound, transparent, ethical and
responsible Corporate Governance framework essentially emanates from
the intrinsic will and passion for good governance ingrained in the
organization. Further, Your Company believes that maintaining the
highest standards of Corporate Governance is imperative in its pursuit
of leadership in the Direct to Home ('DTH') business. The Company
continues to focus its resources, strengths and strategies to achieve
its vision of continuing to be the leader in DTH Industry.
Your Company considers it an inherent responsibility to disclose timely
and accurate information and also places high emphasis on best business
practices and standards of governance besides strictly complying with
the requirements of Clause 49 of the Listing Agreement and applicable
provisions of Companies Act, 2013.
The Audit Committee of the Board has been vested with powers and
functions relating to Risk Management which inter alia includes (a)
review of risk management policies and business processes to ensure
that the business processes adopted and transactions entered into by
the Company are designed to identify and mitigate potential risk; (b)
laying down procedures relating to Risk assessment and minimization;
and (c) formulation, implementation and monitoring of the risk
management plan.
The Company is in compliance of all mandatory requirements regarding
Corporate Governance as stipulated under Clause 49 of the listing
agreement with the stock exchange(s). Certificate issued by the
Statutory Auditors of the Company on compliance of the conditions of
Corporate Governance stipulated in Clause 49 of the Listing Agreement
with the stock exchange(s) forms part of the Corporate Governance
Report.
Your Board has in accordance with the requirements of Companies Act,
2013 and Clause 49 of the Listing Agreement has adopted new policies
and amended existing policies such as policy on Related Party
Transaction, Code of Conduct for Directors and Senior Management,
Corporate Social Responsibility Policy and Whistle Blower and Vigil
Mechanism Policy. These Policies are disclosed on the Company's website
and is accessible at http://www.dishtv.in/Pages/Investor/
Corporate-Governance.aspx
Board Diversity
As on March 31, 2015, your Board comprises of 8 Directors including 4
Independent Directors. The Company recognizes and embraces the
importance of a diverse Board in its success. The Board has adopted the
Board Diversity Policy.
Number of Meetings of the Board
The Board met nine times during the Financial Year, the details of
which are given in the Corporate Governance Report which forms part of
this Annual Report. The intervening gap between any two meetings was
within the period prescribed by the Companies Act, 2013 and Listing
Agreement.
Declaration by Independent Directors
Independent Directors of the Company provide declarations both at the
time of appointment and annually confirming that they meet the criteria
of independence as prescribed under Companies Act, 2013 and Clause 49
of the Listing Agreement.
Directors
As on March 31, 2015, Your Board comprises of 8 Directors including 4
Independent Directors.
During the year under review, Ms. Asha Swarup was appointed as an
Additional Independent Woman Director with effect from September 29,
2014 in compliance with the provisions of revised Clause 49 of Listing
Agreement and Companies Act, 2013. Ms. Asha Swarup resigned as
Director of the Company as at the close of business on March 20, 2015
due to emerging changes and engagements and difficulty to travel. Your
Board places on record its appreciation for contributions made by Ms.
Asha Swarup during her tenure as Additional Independent Woman Director.
Your Board has subsequently inducted Dr. Rashmi Aggarwal as an
Additional Independent Director with effect from May 26, 2015. In terms
of Section 161 of the Companies Act, 2013, Dr. Rashmi Aggarwal shall
hold office up to the date of the ensuing Annual General meeting. The
Company has received a notice in writing along with requisite deposit
pursuant to Section 160 of Companies Act, 2013, proposing appointment
of Dr. Rashmi Aggarwal as Director of the Company. Your Board has
recommended appointment of Dr. Rashmi Aggarwal as an Independent
Director not liable to retire by rotation for a period of 3 (three)
consecutive years with effect from the conclusion of the 27th Annual
General Meeting.
Mr. Ashok Kurien, Non-Executive Director is liable to retire by
rotation at the ensuing Annual General Meeting and, being eligible he
has offered himself for re-appointment. Your Board recommends his re-
appointment.
Key Managerial Personnel
In compliance with the requirements of Section 203 of the Companies
Act, 2013, Mr. Jawahar Lal Goel, Managing Director, Mr. Rajagopal
Chakravarthi Venkateish, Chief Executive Officer, Mr. Rajeev Kumar
Dalmia, Chief Financial Officer and Mr. Ranjit Singh, Company Secretary
of the Company were nominated as Key Managerial Personnel.
Board Evaluation
The Nomination & Remuneration Committee and the Board at their meetings
held on March 20, 2015, approved the Performance evaluation Policy (For
Board, Individual Directors, Chairperson, Committees of Board) and laid
down criteria for performance evaluation of Directors, Chairperson,
Managing Director, Board Level Committees and Board as a whole and also
the evaluation process for the same.
The statement indicating the manner in which formal annual evaluation
of the Directors, the Board and Board level Committees are given in the
Corporate Governance Report which forms part of this Annual
Report. The performances of the members of the Board, the Board level
Committees and the Board as a whole were evaluated at the meeting of
the Independent Directors and the Board of the Directors held on March
20, 2015.
Policy on Directors' appointment and remuneration
In compliance with the requirements of Section 178 of the Companies
Act, 2013, the Nomination & Remuneration Committee of your Board had
fixed various criteria for nominating a person on the Board which inter
alia include desired size and composition of the Board, age limits,
qualification / experience, areas of expertise and independence of
individual. The Committee had also approved in-principle that the
initial term of an Independent Director shall not exceed 3 years. Your
Company has also adopted a Nomination, Appointment, Remuneration and
Training Policy, salient features whereof is annexed to this report.
Familiarisation Programme for Independent Directors
During the year under review, the Board including all Independent
Directors were explained about their roles, rights and responsibilities
in the Company through detailed presentations on the changes in
backdrop of the Companies Act, 2013 and Listing Agreement. To
familiarize the Directors with strategy, operations and functions of
the Company, the senior managerial personnel make presentations about
Company's strategy, operations, product offering, market, technology,
facilities and risk management.
Further, at the time of appointment of an Independent Director, the
Company issues a formal letter of appointment outlining their duties
and responsibilities as a Director.
Committees of the Board
Currently, the Board has seven standing committees viz. Audit
Committee, Nomination and Remuneration Committee, Corporate Social
Responsibility Committee, Budget Committee, Finance Committee, Cost
evaluation and rationalization committee and Stakeholders' Relationship
Committee. The Audit Committee of the Board comprises of 4 (Four)
members, 3 (three) of whom are Independent Directors, with Mr. B.D.
Narang, Non-Executive Independent Director, as its Chairman and Mr.
Arun Duggal, Mr. Lakshmi Chand and Mr. Mintoo Bhandari as the members
of the Audit Committee. A detailed note on the Board and its Committees
is provided under the Report on Corporate Governance section.
Vigil Mechanism
The Board has adopted a Whistle Blower Policy (Vigil Mechanism) to
provide opportunity to Directors/ Employees/Stakeholders of the Company
to report concerns about unethical behavior, actual or suspected fraud
of any Director and/or Employee of the Company or any violation of the
Code of Conduct. Further during the year under review, no case was
reported under the Vigil Mechanism.
AUDITORS
Statutory Auditors: At the 26th Annual General Meeting of the Company
held on September 29, 2014, Walker Chandiok & Co. LLP, Chartered
Accountants, Gurgaon, having Registration No 001076N/N-500013 were
appointed as the Statutory Auditors of the Company to hold office till
the conclusion of the 29th Annual General Meeting. In terms of the
first proviso to Section 139 of the Companies Act, 2013, the
appointment of the Auditors shall be placed for ratification at every
Annual General Meeting. Accordingly, the appointment of Walker
Chandiok & Co. LLP, Chartered Accountants, as Statutory Auditors of the
Company, is placed for ratification by the Shareholders. In this
regard, the Company has received a certificate from the Statutory
Auditors to the effect that if they are reappointed, it would be in
accordance with the provisions of Section 141 of the Companies Act,
2013.
Secretarial Auditor: During the year, the Board appointed Mr. Jayant
Gupta, Practicing Company Secretary, proprietor of M/s Jayant Gupta &
Associates, Company Secretaries as the Secretarial Auditor of the
Company for conducting the Secretarial Audit for the financial year
2014-15. The Secretarial Audit was carried out in compliance with
Section 204 of the Companies Act, 2013 and the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014.
The report of Statutory Auditor and/or Secretarial Auditor forming part
of this Annual report does not contain any qualification, reservation
or adverse remarks.
DISCLOSURES:
i. Particulars of Loans, guarantees and investments: Particulars of
Loans, guarantees and investments made by the Company required under
Section 186(4) of the Companies Act, 2013 are contained in Note no. 52
to the Standalone Financial Statements.
ii. Borrowings and Debt Servicing: During the year under review, your
Company has met all its obligations towards repayment of principal and
interest on loans availed.
iii. Transactions with Related Parties: None of the transactions with
related parties fall under the scope of Section 188(1) of the Act. All
Related Party Transactions entered during the year were in Ordinary
Course of the Business and on Arm's Length basis. No Material Related
Party Transactions, i.e. transactions exceeding ten percent of the
annual consolidated turnover as per the last audited financial
statements, were entered during the year by your Company. Accordingly,
the disclosure of Related Party Transactions as required under Section
134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.
iv. Deposits: Your Company has not accepted any public deposit under
Chapter V of the Companies Act, 2013.
v. Extract of Annual Return: The extract of Annual return in form MGT-9
as required under Section 92(3) of the Act read with Companies
(Management & Administration) Rules, 2014 is annexed to this report.
vi. Sexual Harassment: The Company has zero tolerance for Sexual
Harassment at workplace and has adopted a Policy on prevention of
Sexual Harassment in line with the provisions of Sexual Harassment of
Woman at Workplace (Prevention, Prohibition and Redresssal) Act, 2013
and the Rules made thereunder. There was no complaint on sexual
harassment during the year under review.
vii. Regulatory Orders: No significant or material orders were passed
by the regulators or courts or tribunals which impact the going concern
status and Company's operations in future.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Your Company is in the business of providing Direct- to- Home ('DTH')
services. Since the said activity does not involve any manufacturing
activity, most of the Information required to be provided under Section
134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts)
Rules, 2014, are not applicable.
However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy
consumption and every endeavor is made to ensure optimal use of energy,
avoid wastages and conserve energy as far as possible.
Technology Absorption:
In its endeavor to deliver the best to its viewers and business
partners, your Company is constantly active in harnessing and tapping
the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are
given in Note no. 30, 31 and 32 to the notes to the Accounts forming
part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Your Company has been successful in attracting best of the talent from
industry and academic institutions and has been successful in retaining
them. We hire for talent, passion and right attitude through latest
recruitment and selection practices. We have established our reputation
for being a vibrant learning organization driven by passion. We
provides conducive and healthy climate with values of openness,
enthusiasm, experimentation and collaboration. We deploy quality HR
services to attract, develop, motivate and retain a diverse workforce
with supportive work environment. The Company is committed to
nurturing, enhancing and retaining talent through superior learning &
Organization Development interventions.
Long term development of human capital and strategic deployment of
retention tools is at the core of your Company's strategy. Your Company
believes that committed employees are vital for the sustained growth of
the Company. The Company takes pride in the commitment, competence and
dedication shown by its employees in all areas of business. Your
company has established policies and procedures to discover and use the
employees' capabilities and potential to increase their commitment and
contribution to the overall organization.
The Company has a robust appraisal system based on MBO (Management by
Objectives) philosophy
following a top down approach and open performance discussions. We
encourage meritocracy and reward excellence in performance. The
employees display highest level of business integrity and ethics in
their business conduct.
PARTICULARS OF EMPLOYEES
As on March 31, 2015, the total numbers of employees on the records of
the Company were 1020. The information required under Section 197 of
the Companies Act, 2013 ('Act') read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, along with
statement showing names and other particulars of the employees drawing
remuneration in excess of the limits prescribed under the said rules is
annexed to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 134 of the Companies Act, 2013, as
amended from time to time, in relation to the Annual Financial
Statements for the Financial Year 2014-15, your Directors confirm the
following:
a) The Financial Statements of the Company comprising of the Balance
Sheet as at March 31, 2015 and the Statement of Profit & Loss for the
year ended on that date, have been prepared on a going concern basis
following applicable accounting standards and that no material
departures have been made from the same;
b) Accounting policies selected were applied consistently and the
judgments and estimates related to the financial statements have been
made on a prudent and reasonable basis, so as to give a true and fair
view of the state of affairs of the Company as at March 31, 2015, and,
of the profit of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Act, to safeguard the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) Requisite internal financial controls were laid down and that such
financial controls are adequate and operating effectively; and
e) Proper systems have been devised to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
RISK MANAGEMENT SYSTEM & INTERNAL CONTROL SYSTEMS
Your company has an effective internal control and risk mitigation
system, which is constantly assessed and strengthened with standard
operating procedures and which ensures that all the assets of the
Company are safeguarded and protected against any loss and that all the
transactions are properly authorized and recorded. The Company has laid
down procedures to inform audit committee and board about the risk
assessment and mitigation procedures, to ensure that the management
controls risk through means of a properly defined framework. The
internal control systems of your company ensures that all assets are
safeguarded and protected against loss from unauthorized use or
disposition and those transactions are authorized, recorded and
reported correctly.
Your Company has in place adequate internal financial controls with
reference to financial statements. Based on internal financial control
framework and compliance systems established in the Company, the work
performed by statutory, internal and secretarial auditors and reviews
performed by the management and/or relevant Audit and other Committees
of the Board, your Board is of the opinion that the Company's internal
financial controls were adequate and effective during the financial
year 2014-15. During the year, no reportable material weakness in the
design or operation was observed.
Properly documented policies, guidelines and procedures are laid down
for this purpose. The internal control system has been designed to
ensure that the financial and other records are reliable for preparing
financial and other statements and for maintaining accountability of
assets.
The Company also has an Audit Committee, presently comprising of 4
(four) Non-Executive professionally qualified Directors, who interact
with the Statutory Auditors, Internal Auditors, Cost Auditors and
Auditees in dealing with matters within its terms of reference. The
Committee inter alia deals with accounting matters, financial reporting
and internal controls which also periodically reviews the Risk
Management Process.
RATINGS
CRISIL, a Credit rating agency, has during the year under review
assigned 'CRISIL A- / Stable (Assigned)' rating to the New Banking
Facilities of the Company.
CARE (Credit Analysis and Research Limited), a Credit rating agency has
revised the rating of Long-
Term Bank Facilities of the Company from 'CARE BBB (Triple B)' to 'CARE
A- (Single A minus)'. The revision in standalone rating of the Company
factors in comfortable debt coverage metrics (Total Debt/GCA & Interest
coverage ratio), availability of large unencumbered deposits (cash) to
meet any contingencies and strong parentage.
INDUSTRIAL OPERATIONS
The Company maintained healthy, cordial and harmonious industrial
relations at all levels. The enthusiasm and unstinting efforts of the
employees have enabled the Company to remain at the leadership position
in the industry. It has taken various steps to improve productivity
across the organization.
CAUTIONARY STATEMENT
Statements in this Report, particularly those which relate to
Management Discussion and Analysis, describing the Company's
objectives, projections, estimates and expectations, may constitute
'forward looking statements' within the meaning of applicable laws and
regulations and actual results might differ.
ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has
ensured our success in the past and will do so in future. Your
Directors acknowledge with sincere gratitude the co-operation and
support extended by the Central and State Governments, the Ministry of
Information and Broadcasting ('MIB'), the Department of
Telecommunication ('DOT'), Ministry of Finance, the Telecom Regulatory
Authority of India ('TRAI'), the Stock Exchanges - and other
stakeholders including employees, subscribers, vendors, bankers,
investors, service providers as well as other regulatory and government
authorities.
Your Board also takes this opportunity to express its deep gratitude
for the continued co-operation and support received from its valued
stakeholders.
For and on behalf of the Board
Jawahar Lal Goel B D Narang
Managing Director Independent Director
DIN: 00076462 DIN: 00038052
Place: Noida
Date: 4 August 2015
Mar 31, 2014
To the Members,
The Directors are pleased to present the 26th (Twenty Sixth) Annual
Report and the Audited Financial Statements of the Company for the
Financial Year ended March 31, 2014.
FINANCIAL RESULTS
The Financial Performance of your Company for the Financial Year ended
March 31, 2014 is summarized below:
(Rs. / Thousand)
Particulars Year ended Year ended
March 31, 2014 March 31, 2013
Sales & Services 25,089,803 21,668,050
Other Income 660,249 511,952
Total Income 25,750,052 22,180,002
Total Expenses 26,128,424 23,431,940
profit/(Loss) before
Tax & Prior Period
Item (378,372) (1,251,938)
Prior Period Item (1,163,688) -
profit/(Loss)
before Tax (1,542,060) (1,251,938)
Provision for
Taxation (net) - -
profit/(Loss) after
Tax (1,542,060) (1,251,938)
Exceptional items - 594,442
profit/(Loss) for the
Year (1,542,060) (657,496)
Add: Balance
brought forward (18,180,416) (17,522,920)
Amount available
for appropriations (19,722,476) (18,180,416)
Appropriations :
Dividend NIL NIL
Tax on Dividend NIL NIL
General Reserve NIL NIL
Balance Carried
Forward (19,722,476) (18,180,416)
DIVIDEND
Your Directors have not recommended any dividend on the equity shares
of the Company for the year under review.
BUSINESS OVERVIEW
The Financial Year 2013 Â 14 was a globally challenging year with the
economy facing turbulent times and the dollar touching new heights. The
economic downturn brought challenges to your Company however your
Company, despite the economic slowdown, continued to grow in all
aspects. The year under review witnessed increase in all folds
including gross revenue, gross subscriber base, EBITDA and ARPU.
Dish TV has pioneered the Direct-to-Home (DTH) distribution space and
continues to hold the largest registered subscriber base till date. It
has become synonymous with quality digital entertainment in the
Country. Ever since inception dishtv has been a thought leader bringing
new and innovative products and services into the category and setting
benchmarks for others to follow. Dishtv has built and continues to
sustain abundant capacity, beaming from 2 (two) different satellites,
offering the largest bouquet of content with an unmatched 450 channels
and services. All this packaged at consumer friendly tiers that suit
diverse consumer needs for content across different genres and
languages.
During the year under review, your Company continued to engage
subscribers by providing wholesome entertainment experience through
relevant content, on demand services and the door step service &
support. The positive effect of Digitization already initiated in the
previous years continued to show in parts of 38 cities and your Company
created new service franchisees to cater to the increased requirements
of newly digitized homes in the said 38 cities. This provided an edge
over competition and the benefit of such service infrastructure will
yield benefit in coming years. The Digital Cable System continued to
aggressively engage into stiff competition however DTH continues to be
a favoured choice of the customer. Your Company continued to play the
role of the leader of the Industry with bringing new and innovative
products and services into the category and setting benchmarks for
others to follow.
Dishtv now offers consumer choice across a wide array of multi-brand
and multi product portfolio, to suit different consumer segments.
Continuing the lead the category with largest bouquet of 40 HD
channels, dishtruHD , India''s frst HD set top box with unlimited
recording, has built a hi-ARPU base of HD users that provide hi-ARPU
and better retention too. Dish , the standard defnition recorder that
allowed Indian consumers to taste the power of pause / play, recording
features at SD prices, has become a 30% contributor to gross additions
during the year and attracts quality subscribers into the fold.
During the year under review, your Company launched a new product under
the brand name  ZING. The new product is aimed at providing regional
driven content, covering small towns and rural markets which will
provide your Company an opportunity to strengthen its presence in these
areas.
The favorable demographic pattern and constant rise in the net
disposable income is also driving major change in the Media and
Entertainment Industry. The quality of contents is also improving with
the increased demand, desire and expectations of the consumers. The
rise in education level and increased expectations mainly because of
the access to international media, internet and social networking
platforms is also driving the Industry. The consumer of today is more
evolved, tech savvy, broadband oriented and is willing to go places to
satiate his demand for content.
In true spirit of a category leader, Dishtv has constantly pioneered
new products that have set new benchmarks, throughout its journey. This
year Dish TV forayed into the OTT (Over the Top) space with an online
TV streaming product christened dishonline. Stemming from high
penetration of smart phones and internet, the Indian consumer today, is
spending increasing time on alternate screens like the laptop, tablet
and smart phone, away from the conventional TV viewing. A large part of
this consumption on smaller screens is dominated by viewership of
content online. Understanding the new dynamics of evolving consumer
trends of multi-screen behavior, this product provides live TV, on
demand movies, catch up TV and video shows at the press of a button on
an app. Hence dishtv viewers can now access their favorite TV shows on
the go, on their mobile device and never miss a minute of their loved
program. This innovative and engaging product was introduced at a small
top up price of Rs. 60 a month, over and above the base subscription on
TV, has seen over 4 lac downloads in a short span of time. The
dishonline product has a great VAS opportunity to build ARPU.
The changing consumer attitudes of today''s discerning consumers and
increase in spending patterns, specially towards embracing new
technology products, presents an opportunity for adoption of new
formats such as recorders and hi-defnition. With the downturn in CRTV
market and the tide shifting to fat panel technology showcases the
consciousness of consumers with regard to quality of TV viewing. The
panorama for DTH is brighter than ever before. Clubbed with reduction
in prices of fat panel televisions, demand for quality television
provides a very fertile ground for the category. Therefore, the
Company sees an upsurge in demand for Hi-Defnition STB sales due to the
expanding HD universe by consumers actively seeking quality content.
Opportunities also lie in acquiring quality consumers who make a
positive difference to the bottom line not only contributing to ARPU
but also increase brand loyalty.
SUBSIDIARY OPERATIONS
Subsidiary in Sri Lanka
Your Company, upon the approval of Board of Directors, incorporated a
Joint Venture (''JV'') Company with Satnet (Private) Limited, a Company
incorporated under the Laws of Sri Lanka, in the name and style of
''Dish T V Lanka (Private) Limited'' on April 25, 2012 with a paid-up
share capital of 1 million Sri Lankan Rupees. Your Company holds 70%
of the paid-up share capital and Satnet (Private) Limited holds 30% of
the paid-up share capital, respectively, in the said JV Company. Dish T
V Lanka (Private) Limited shall provide DTH services upon receipt of
the License from the Government of Sri Lanka. The Company has received
the license from the Telecom Regulatory Commission of Sri Lanka and is
awaiting the license from Media Ministry of Sri Lanka, post which it
shall commence the commercial operations.
Subsidiary in India
Your Company, upon the approval of Board of Directors and the Members
of the Company, acquired the entire share capital of Xingmedia
Distribution Private Limited (''Xingmedia'') on March 24, 2014. The
principal business of Xingmedia is to provide support services for
satellite based communication services, management of hard assets like
Consumer Premises Equipment (CPE) and its installation, after sales
service, call center & back end support service, value added services
etc. With the strategy of the Company to focus on core business
activities, strengthen and expand its operations in this feld, the
investment in Xingmedia will help the Company to take necessary steps
in this direction expeditiously and effectively. Your Company holds the
entire share capital in Xingmedia. Xingmedia shall, post commencement
of commercial operations, shall also provide various services to Dish
TV including call center and back end support service.
Audited Accounts of Subsidiary Companies
In accordance with the General Circular No. 2 / 2011 dated February 8,
2011 read with General Circular No. 3 / 2011 dated February 21, 2011
issued by the Government of India, Ministry of Corporate Affairs, the
accounts of Subsidiary Companies are not attached to the Annual Audited
Accounts of the Company. The Board of Directors of the Company at their
meeting held on May 27, 2014 had opted for not attaching the Financial
Statements of the subsidiaries. The Company has prepared the Audited
Consolidated Financial Statements in compliance with applicable
Accounting Standards and the Listing Agreement that forms part of this
Annual Report. The Statement pursuant to Section 212 of Companies Act,
1956, highlighting the summary of the financial performance of our
subsidiaries is annexed to this Report. The Audited Financial
Statements and related information of the Subsidiaries will be made
available to any member, upon request, and shall also be open for
inspection at the Registered office of the Company.
As required under the Accounting Standard AS-21 Â ''Consolidated
Financial Statements'', issued by the Institute of Chartered Accountants
of India (''ICAI'') and applicable provisions of the Listing Agreement
with the Stock Exchange(s), the Audited Consolidated Financial
Statements of the Company refecting the Consolidation of the Accounts
of its subsidiaries to the extent of equity holding in these Companies
are included in this Annual Report.
LISTING
Your Company''s fully paid equity shares continue to be listed and
traded on BSE Limited (''BSE'') and the National Stock Exchange of India
Limited (''NSE''). Both these Stock Exchanges have nation-wide terminals
and hence facilitates the Shareholders / Investors of the Company in
trading the shares. The Company has paid the annual listing fee for the
Financial Year 2014-15 to the said Stock Exchanges.
The Global Depository Receipts (''GDR'') of the Company are listed on the
Luxembourg Stock Exchange. The Company has paid the annual listing fee
to the Luxembourg Stock Exchange.
DEPOSITORIES
Your Company has entered into an agreement with National Securities
Depository Limited (''NSDL) and Central Depository Services (India)
Limited (''CDSL''), the Depositories of the Company, for facilitating the
members to trade in the equity shares of the Company in Dematerialized
form. The Company has paid the annual custody fees for the Financial
Year 2014-15 to both the Depositories.
SHARE CAPITAL
During the year under review, your Company has issued and allotted
69,590 equity shares, upon exercise of Stock Option by the Employees /
Independent Directors of the Company, pursuant to the Employee Stock
Option Scheme - 2007 (''ESOP - 2007'') of the Company and these shares
were duly admitted for trading on both the stock exchanges viz NSE and
BSE.
During the Financial Year 2008-09, your Company had come up with Rights
Issue of 518,149,592 equity shares of Rs. 1 each, issued at Rs. 22 per
share (including premium of Rs. 21 per share), payable in three
installments. Upon receipt of valid frst and second call money from the
concerned shareholders, during the year under review, the Company
converted 170,612 equity shares from Rs. 0.50 each paid up to Rs. 0.75 each
paid up and 170,733 equity shares from Rs. 0.75 each paid up to Rs. 1 each
fully paid up.
Pursuant to the issue of further equity shares under ESOP scheme and
subsequent to conversion of partly paid equity shares, the paid up
capital of your Company during the year has increased from Rs.
1,064,779,289.5 (comprising of 1,064,662,247 fully paid up equity
shares of Rs. 1 each & 22,314 equity shares of Rs. 1 each paid up Rs. 0.75
per equity share & 200,614 equity shares of Rs. 1 each, paid up Rs. 0.50
per equity share) to Rs. 1,064,934,215.75 (comprising of 1,064,902,570
fully paid up equity shares of Rs. 1 each & 22,193 equity shares of Rs. 1
each, paid up Rs. 0.75 per equity share & 30,002 equity shares of Rs. 1
each, paid up Rs. 0.50 per equity share).
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs. 113,992.91 Lakhs, the Company
has received a sum of Rs. 113,986.33 Lakhs towards the share application
and call money as at March 31, 2014, the details of which has been
provided under the preceding heading.
The details of utilization of Rights Issue proceeds are placed before
the Audit Committee and the Board on a quarterly basis. Further, the
Company also provides the details of the utilization of Rights Issue
proceeds to IDBI Bank Limited, the Monitoring Agency of the Company, on
half yearly basis and furnishes the Monitoring Report to the Stock
Exchanges.
The Board at its meeting held on May 28, 2009 approved to make changes
in the manner of usage of right issue proceeds. The manner of
utilization of rights issue proceeds as on March 31, 2014, is as under:
Particulars Amount
(Rs. In Lacs)
Repayment of loans 28,421.44
Repayment of loans received after 24,300.00
launch of the Rights Issue
General Corporate Purpose/ 19,720.37
Acquisition of Consumer Premises 26,000.00
Equipment (CPE)
Right Issue Expenses 544.52
Total 98,986.33
The half yearly Monitoring Reports issued by IDBI Bank Limited, the
Monitoring Agency of the Company, containing deviation from the
original proposed expenditure plan and in accordance with the approved
revised plan was recorded by the Audit Committee and the Board at their
respective meetings and necessary compliance in this regard had been
carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (''GDR'') Offer of the Company for 117,035
GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000
fully paid equity shares of the Company were fully subscribed by Apollo
India Private Equity II (Mauritius) Limited. The underlying shares
against each of the GDRs were issued in the name of the Depository -
Deutsche Bank Trust Company Americas. As on March 31, 2014, 85,035 GDRs
have remained outstanding, the underlying shares of which forms part of
the existing paid up capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2014 is as
under:
Particulars Amount
(Rs. In Lacs)
Acquisition of FA including CPE 7,669.88
GDR Issue Expenses 344.63
Advance Against Share Application
Money given to erstwhile Subsidiary 56.14
Repayment of Bank Loans 755.22
Operation Expenses including interest
payment bank charges, exchange
fuctuation 21,819.05
Less: Interest earned-realized (439.94)
Balance with Non-Scheduled Bank 25,443.97
Total 55,648.95
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, as amended from time to time, your Board had authorized the
Nomination and Remuneration Committee (formerly ''Remuneration
Committee'') to administer and implement the Company''s Employees Stock
Option Scheme (ESOP Â 2007) including deciding and reviewing the
eligibility criteria for grant and /or issuance of stock options to the
eligible Employees / Independent Directors under the Scheme. Further,
your Board has also constituted an ESOP Allotment Committee to
consider, review and allot equity shares to the eligible Employees /
Independent Directors exercising the stock options under the Employee
Stock Option Scheme (ESOP Â 2007) of the Company.
During the period under review, the Nomination and Remuneration
Committee (formerly ''Remuneration Committee'') of the Board granted
380,650 stock options to the eligible Employees / Independent Directors
as per the ESOP Â 2007 of the Company. The ESOP Allotment Committee of
the Board, during the year, issued and allotted 69,590 fully paid
equity shares, upon exercise of the stock options by eligible Employees
/ Independent Directors under the ESOP Â 2007.
Applicable disclosures relating to Employees Stock Options as at March
31, 2014, pursuant to Clause 12 (Disclosure in the Directors'' Report)
of the SEBI (Employees'' Stock Option Scheme and Employees'' Stock
Purchase Scheme) Guidelines, 1999, as amemded from time to time, are
set out in the Annexure to this Report.
A certifcate to the effect that the ESOP Â 2007 Scheme of the Company
has been implemented in accordance with the SEBI Guidelines and as per
the resolution passed by the members of the Company authorizing
issuance of the said ESOPs, as prescribed under Clause 14 of the said
Guidelines, has been issued by the Statutory Auditors of the Company.
The said certifcate shall be available for inspection at the Annual
General Meeting of the Company and a copy of the same shall be
available for inspection at the Registered office of the Company.
PUBLIC DEPOSITS AND LOAN / ADVANCES
During the year under review, your Company has not accepted any
Deposits under Section 58A and Section 58AA of the Companies Act, 1956
read with Companies
(Acceptance of Deposits) Rules, 1975. Pursuant to Clause 32 of the
Listing Agreement, the particulars of loans / advances given to
Subsidiary Companies have been disclosed in the Financial Statements of
the Company.
CORPORATE GOVERNANCE
Corporate Governance is not just a destination but a journey to
constantly improve sustainable value creation. Your Company firmly
believes that maintaining the highest standards of Corporate Governance
is imperative in its pursuit of leadership in the Direct to Home
(''DTH'') business. Your Company continues to focus its resources,
strengths and strategies to achieve its vision of becoming true global
leader in DTH Industry. Your Company further believes that a sound,
transparent, ethical and responsible Corporate Governance framework
essentially emanates from the intrinsic will and passion for good
governance ingrained in the organization. This is ensured by taking
ethical business decisions and conducting the business with a firm
commitment to values, while meeting Shareholders'' expectation. Your
Company considers it an inherent responsibility to disclose timely and
accurate information and places high emphasis on best business
practices and standards of governance.
Your Company seeks to align and synergize the Corporate Governance
norms prescribed by various regulatory bodies with a view to adopt best
governance practices leading to sustained growth of your Company
embracing the inclusive growth and long term benefits for all its
Stakeholders and the economy as a whole. Your Company has been
constantly reassessing and benchmarking itself with well-established
Corporate Governance practices.
The Company is in compliance of all mandatory requirements regarding
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchange(s). For the fiscal year ending 2014,
the compliance report is provided in the Corporate Governance section
of the Annual Report. A certifcate issued by the Statutory Auditors of
the Company on compliance of the conditions of Corporate Governance
stipulated in Clause 49 of the Listing Agreement with the Stock
Exchange(s) forms part of the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review
as provided under Clause 49 of the Listing Agreement with the Stock
Exchanges is separately attached hereto and forms a part of this Annual
Report.
CORPORATE SOCIAL RESPONSIBILITY
As part of the Essel Group, your Company has at a unifed and
centralized level, put in place a Corporate Social Responsibility (CSR)
policy which is based on a belief that a business cannot succeed in a
society that fails and therefore it is imperative for business houses,
to invest in the future by taking part in social-building activities.
AWARDS AND ACHIEVEMENTS
During the year, your Company was voted as the ''Most Attractive DTH
Brand'' in the TRA''s (Trust Research Advisory) report of ''India''s Most
Attractive Brand 2013'' and also as the ''Most Trusted Brand'' by Trust
Research Advisory (TRA) in their report ''Brand Trust Report  2014''.
RATINGS
CRISIL, a Credit Rating Agency, has during the year under review
assigned ''CRISIL A- / Stable (Assigned)'' rating to the New Banking
Facilities of the Company.
CARE (Credit Analysis and Research Limited), a Credit Rating Agency has
revised the rating of Long- Term Bank Facilities of the Company from
''CARE BBB (Triple B)'' to ''CARE A- (Single A minus)''. The revision in
standalone rating of the Company factors in comfortable debt coverage
metrics (Total Debt / GCA & Interest coverage ratio), availability of
large unencumbered deposits (cash) to meet any contingencies and strong
parentage.
POSTAL BALLOT
During the year under review, your Company sought the approval of the
Shareholders on the following matters, vide Postal Ballot Notice dated
February 14, 2014.
- Special Resolution under Section 372A of the Companies Act, 1956 to
approve making loans / investments or giving guarantee or providing any
security, for an additional amount of Indian Rupees 30 Crores, the
aggregate amount of loans / investments / guarantees not exceeding
Indian Rupees 100 Crores, in Dish T V Lanka (Private) Limited over and
above the limits prescribed under the said Section.
- Special Resolution under Section 372A of the Companies Act, 1956 to
approve making an
initial investment of upto Indian Rupees 1 lakh for acquiring /
investing through purchase / transfer, the entire share capital of
Xingmedia Distribution Private Limited over and above the limits
prescribed under the said section.
The said Postal Ballot Notice along with Postal Ballot Form and
Business Reply Envelopes were duly sent to the Shareholders of your
Company and your Company also offered E-Voting facility as an alternate
option for voting by the Shareholders, which enabled them to cast their
votes electronically, instead of Physical Postal Ballot Form. The
result on the voting conducted through Postal Ballot process was
declared on March 24, 2014.
The procedure prescribed under Section 192A of the Companies Act, 1956
and notifed applicable provisions of Companies Act, 2013 read with the
Companies (Passing of the Resolution by Postal Ballot) Rules, 2011 was
adopted for conducting the Postal Ballot.
Further, details related to the Postal Ballot procedure adopted, voting
pattern and result thereof have been provided under the General Meeting
Section of ''Report on Corporate Governance''.
DIRECTORS
In terms of the Articles of Association of the Company and the
applicable provisions of the Companies Act, 1956, Mr. Mintoo Bhandari,
Non-Executive Nominee Director is liable to retire by rotation at the
ensuing Annual General Meeting. Your Board recommends the
re-appointment of Mr. Mintoo Bhandari, as a Director liable to retire
by rotation, in terms of the applicable provisions of the Companies
Act, 2013.
In terms of provisions of the Companies Act, 2013, the office of the
Independent Directors shall not be liable to retire by rotation.
Accordingly, Mr. B. D. Narang, Mr. Arun Duggal, Mr. Lakshmi Chand and
Mr. Eric Louis Zinterhofer, ''Non-Executive & Independent Directors'' of
the Company, whose office are liable to retire by rotation, under the
erstwhile provisions of the Companies Act, 1956 have been proposed to
be appointed as Independent Directors of the Company whose office would
not be liable to retire by rotation, in terms of the provisions of
Section 149, 150 and 152, Schedule IV of the Companies Act, 2013, for a
term of 3 (three) consecutive years with effect from the conclusion of
26th Annual General Meeting upto the conclusion of 29th Annual General
Meeting of the Company to be held in the calendar year 2017.
The Board has received declarations from all the ''Independent
Directors'' of the Company confirming that they meet with the criteria of
Independence, as prescribed under Section 149 of the Companies Act,
2013. Further, your Board has also evaluated and opined that the
''Independent Directors'' of the Company fulfl the conditions specified in
the Companies Act, 2013 and the rules made thereunder and are
Independent. Thus the Board recommends their appointment as
Independent Directors on the Board of the Company.
Details of the proposal for the appointment of above Directors is
mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of the Annual General Meeting. Brief
resume and details of Directors proposed to be appointed / re-
appointed at the ensuing Annual General Meeting are included in the
Corporate Governance Report.
AUDITORS
The Statutory Auditors B S R & Co. LLP, Chartered Accountants, Gurgaon,
having Registration No .101248W/ W-100022, have expressed their
unwillingness to be reappointed as the Statutory Auditor of the
Company. The Board, on recommendation of the Audit Committee, has
proposed to the members, the appointment of Walker Chandiok & Co LLP,
Chartered Accountants, New Delhi (Firm Registration No.
001076N/N-500013) as the Statutory Auditor of the Company for a period
of 3 years, i.e., from the conclusion of 26th Annual General Meeting
until the conclusion of 29th Annual General Meeting to be held in the
calendar year 2017 and also to fix their remuneration.
Your Company has received confirmation from Walker Chandiok & Co LLP,
Chartered Accountants, New Delhi, to the effect that their appointment,
if made, will be in accordance with the limits specified under the
Companies Act, 2013 and that they satisfy the criteria specified in
Section 141 of the Companies Act, 2013 read with Companies (Audit &
Auditors) Rules 2014.
AUDITOR''S REPORT
The response to the matter of Emphasis laid down by the Auditors in the
Audit Report and the Annexure thereto is as under:
The response to Serial No. 5 (a) of the Auditors report and Serial No.
(x) of the Anneuxre to the Audit Report - The Company holds a DTH
license from Government of India and the DTH business necessitates long
gestation period. Being frst mover, the Company has incurred huge cost
on establishment and awareness of the product, brand building on a pan
India basis. The Management is fully seized of the matter and is of the
view that going concern assumption holds true and that the Company will
be able to discharge its liabilities in the normal course of business
since the Company holds sanctioned loan facilities from banks and would
meet the debt obligations on due dates. The Company also has positive
operating cash flows and the loss is also reducing gradually.
The response to Serial No. 5(b) and 5(c) of the Auditors report is- The
Company has been recognizing the initial activation fee received from
the subscribers over a period ranging from 3 years to 5 years based on
the time period and nature of scheme under which the connection of the
subscriber was activated. However, the cost incurred in procurement,
installation and activation of the Consumer Premises Equipment (CPE) is
higher than the amount realized from the subscribers. To this extent,
there was a mismatch in the total cost incurred upto the time of
activation of the connection at the customers end and the initial
revenue realized by the Company. In order to give a fair representation
of the transaction & matching the cost leading upto installation, a
change in revenue recognition policy was adopted by the Management.
This will result in a true and fair view of the underlying business
transaction.
The response to Serial No.(ix)(a) of the Annexure to the Audit Report
is- The Company has to pay the Entertainment Tax in various states
individually and the Entertainment Tax regime is ever evolving with
each state making changes in the Entertainment Tax regime. The delays
were on account of procedural issues which have been taken care of and
the amounts have been subsequently paid to the authorities
The response to Serial No. (xvii) of the Annexure to the Audit Report
is - The Company needs to procure CPE for installation at the end of
subscriber. The same is treated as Fixed asset and depreciated over a
period of 5 years. The funds borrowed for this purpose is relatively of
shorter duration and hence prima facie, the short term funds are used
for long term purpose.
AUDIT COMMITTEE RECOMMENDATION
During the year there was no such recommendation of the Audit Committee
which was not accepted by the Board.
COST AUDIT
In compliance with the Companies (Cost Audit Report) Rules, 2011 and
Cost Accounting Records (Telecommunication Industry) Rules, 2011 issued
by the Central Government, your Company had appointed Chandra Wadhwa &
Co., Cost Accountants (Membership Number  6797), as the Cost Auditor
for the Financial Year 2013-14. The Cost Auditors'' Report for the
Financial Year 2013-14 will be forwarded to the Central Government on
or before September 30, 2014.
Pursuant to Companies (Cost Records and Audit) Rules, 2014 dated June
30, 2014 issued by the Ministry of Corporate Affairs, there is no
further requirement of appointment of Cost Auditors for Company
providing Broadcasting Services and accordingly your Company is from
now onwards exempt from appointing Cost Auditors.
RISK MANAGEMENT SYSTEM & INTERNAL CONTROL SYSTEMS
Your Company has an effective internal control and risk mitigation
system, which is constantly assessed and strengthened with new /
revised standard operating procedures and which ensures that all the
assets of the Company are safeguarded and protected against any loss
and that all the transactions are properly authorized and recorded. The
Company has laid down procedures to inform Audit Committee and Board
about the risk assessment and mitigation procedures, to ensure that the
management controls risk through means of a properly Defined framework.
This internal control systems of your Company ensures that all assets
are safeguarded and protected against loss from unauthorized use or
disposition and those transactions are authorized, recorded and
reported correctly.
An extensive program of internal audits and management reviews
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed to ensure that the financial
and other records are reliable for preparing financial and other
statements and for maintaining accountability of assets.
The Company also has an Audit Committee, presently comprising of
4(four) Non-Executive professionally qualifed Directors, who along with
Management team, interact with the Statutory Auditors, Internal
Auditors, Cost Auditors and Auditees in dealing with matters within its
terms of reference. The Committee inter alia deals with accounting
matters, Financial Reporting and Internal Controls which also
periodically reviews the Risk Management Process.
COMPANIES ACT, 2013
During the current Financial Year the Companies Act, 1956 has been
replaced by newly enacted Companies Act, 2013 and became applicable
from April 1, 2014.
The Ministry of Corporate Affairs, Government of India vide its
Circular 08/2014 dated April 4, 2014 notifed that the Financial
Statements (and documents attached thereto), Auditor''s Report and
Board''s Report in respect of the financial years that commenced earlier
than April 1, 2014 shall be governed by the relevant provisions /
schedules / rules of the Companies Act, 1956. Accordingly, the
Financial Statements and the Director''s Report has been prepared as per
the applicable provisions of the Companies Act, 1956.
Your Company has been regular in keeping pace with the fast changes
introduced by the Companies Act, 2013 and initiated necessary actions
accordingly. Some of the important initiatives taken by your Company
are as under:
a) Reconstitution of the Board and the Committees thereof;
b) Revision of the terms of reference of the Board Committees;
c) Designation of Key Managerial Personnels;
d) Setting up of Vigil Mechanism;
e) Constitution of Corporate Social Responsibility Committee;
f) Recommendation for the Appointment of the Independent Directors, not
liable to retire by rotation, who satisfy the criteria enumerated in
Companies Act, 2013;
g) Providing E-Voting facility to Members to vote on the resolutions of
General Meeting and Postal Ballot.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Your Company is in the business of providing Direct-to-Home (''DTH'')
services. Since the said activity does not involve any manufacturing
activity, most of the Information required to be provided under Section
217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988, are not applicable.
However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy
consumption and every endeavor is made to ensure optimal use of energy,
avoid wastages and conserve energy as far as possible.
Technology Absorption:
In its endeavor to deliver the best to its viewers and business
partners, your Company is constantly active in harnessing and tapping
the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are
given in Note no. 30, 31 and 32 to the notes to the Accounts forming
part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
The Company is committed to nurturing, enhancing and retaining talent
through superior learning & Organization Development interventions.
Long term development of human capital and strategic employment of
retention tools is at the core of your Company''s strategy. Your Company
believes that its Employees are the most valuable assets and vital for
the sustained growth of the Company. We at Dish TV, encourage
innovation, meritocracy and the pursuit of excellence by setting up
robust recruitment and human resource management policies. The Company
takes pride in the commitment, competence and dedication shown by its
employees in all areas of business.
The Company has a structured induction process at all locations and
management development programs to upgrade skills of mangers. Objective
appraisal systems based on Key Result Areas (KRAs) are in place for
employees of the Company.
The Management of your Company aims at developing such strategies that
not only promise attraction of best talent in your Company but also
ensures their retention by building trust and instilling devotion in
the employees at all levels. Your Company aims to incorporate the
planning and control of manpower resource into the corporate level
plans so that all resources are used together in the best possible
combination.
PARTICULARS OF EMPLOYEES
As on March 31, 2014, the total numbers of employees on the records of
the Company were 947. The information required under Section 217(2A)
of the Companies Act, 1956 (''Act'') read with the Companies (Particulars
of Employees) Rules, 1975, as amended from time to time, is required to
be set out in an annexure to this report. However, in terms of Section
219(1)(b) of the Act, the Annual Report is being sent to the
Shareholders excluding the aforesaid annexure. Any Shareholder
interested in obtaining copy of the same, may write to the Company
Secretary at the Corporate office of the Company. None of the employees,
except Mr. Jawahar Lal Goel, Managing Director, mentioned in the said
list are related to any Director of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 217(2AA) of the Companies Act,
1956, as amended from time to time, in relation to the Annual Financial
Statements for the Financial Year 2013-14, your Directors confirm the
following:
a) That in the preparation of the Financial Statements for the year
ended March 31, 2014, the applicable Accounting Standards have been
followed along with proper explanation relating to material departures;
b) That the Accounting Policies have been selected and applied
consistently and the judgments and estimates related to the Financial
Statements have been made on a prudent and reasonable basis, so as to
give a true and fair view of the state of affairs of the Company as at
March 31, 2014, and of the profit or loss of the Company for the year
ended on that date;
c) That proper and suffcient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) That the Annual Accounts for the year ended March 31, 2014 have been
prepared on a going concern basis.
INDUSTRIAL OPERATIONS
The Company maintained healthy, cordial and harmonious industrial
relations at all levels. The enthusiasm and unstinting efforts of the
employees have enabled the Company to remain at the leadership position
in the industry. It has taken various steps to improve productivity
across the organization.
CAUTIONARY STATEMENT
Statements in this Report, particularly those which relate to
Management Discussion and Analysis, describing the Company''s
objectives, projections, estimates and expectations, may constitute
''forward looking statements'' within the meaning of applicable laws and
regulations and actual results might differ.
ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has
ensured our success in the past and will do so in future. Your
Directors acknowledge with sincere gratitude the co-operation and
assistance extended by the Central and State Governments, the Ministry
of Information and Broadcasting (''MIB''), the Department of
Telecommunication (''DOT'') and Foreign Investment Promotion Board
(''FIPB''), Ministry of Finance, the Telecom Regulatory Authority of
India (''TRAI''), the Stock Exchanges - and other stakeholders including
viewers, vendors, bankers, investors, service providers as well as
other regulatory and government authorities.
Your Board also takes this opportunity to express its deep gratitude
for the continued co-operation and support received from its valued
stakeholders.
For and on behalf of the Board
Jawahar Lal Goel B D Narang
Managing Director Director
DIN: 00076462 DIN: 00038052
Place: Noida
Date : August 26, 2014
Mar 31, 2013
To the Members,
The Directors are pleased to present the Twenty Fifth (25th) Annual
Report together with the Audited Statement of Accounts of the Company
for the Financial Year ended March 31, 2013.
FINANCIAL RESULTS
The Financial Performance of your Company for the year ended March 31,
2013 is summarized below:
(Rs./Thousand)
Particulars Year ended Year ended
March 31, 2013 March 31, 2012
Sales & Services 21,668,050 19,578,236
Other Income 511,952 578,706
Total income 22,180,002 20,156,942
Total Expenses 23,431,940 21,745,440
Profit/(Loss) before Tax (1,251,938) (1,588,498)
Provision for Taxation (net) - -
Profit/(Loss) after Tax (1,251,938) (1,588,498)
Exceptional items 594,442 -
Profit/(Loss) for the Year (657,496) (1,588,498)
Add: Balance brought forward (17,522,920) (15,934,422)
Amount available for appropriations (18,180,416) (17,522,920)
Appropriations :
Dividend Nil Nil
Tax on Dividend Nil Nil
General Reserve Nil Nil
Balance Carried Forward (18,180,416) (17,522,920)
DIVIDEND
Your Directors have not recommended any dividend on the equity shares
of the Company for the year under review.
BUSINESS OVERVIEW
The year under review continued to bring strength to your Company with
constant acquisition of Subscribers and the Digitization yielding
expected results. The Broadcasting and Distribution Industry gained
momentum in the year under review with large number of HD Channels
becoming available to the consumers. Over the years, Dish TV has carved
a niche for itself on account of its adaptability to the state of the
art technology, variety of content, affordable offerings and quick
response to the consumers. Dish TV is aiming at growth in revenue and
subscriber base inter alia on account of provision of customer oriented
support service, highest number of Hi-Definition channels & services,
premium on demand services for niche content and latest international
movie channels.
The favorable demographic pattern and constant rise in the net
disposable income is also driving major change in the Media and
Entertainment Industry, more particularly, the ever growing pay TV
Industry. The quality and veracity of contents is also improving with
the increased demand, desire and expectations of the consumers. The
rise in education level and increased expectations mainly because of
the access to international media, internet and social networking
platforms is also driving the Industry. The consumer of today is more
evolved, tech savvy, broadband oriented and is willing to go places to
satiate his demand for content. Fortunately, Indian Broadcast Industry
has moved in tandem with such change in the consumer behavior.
The Government of India is participating actively in the overall
digitization process pushing the entire category towards achieving the
objective of complete digitization. The wide buzz and noise created by
the stakeholders of media Industry has helped the cause, however the
digitization process needs to grow faster to accomplish the desired
aim.
The year gone by has been the most opportunistic and challenging for
the Digital Broadcast Industry. The mandate of digitization set open a
gigantic market of analog users waiting to get digitized across top 42
cities. Aggressive play by digital cable systems was witnessed wherein
Direct-to-Home (''DTH'') clearly went on establishing itself as the most
preferred choice for digital viewing of pay television content.
Out of the approximately 60 Mn installed base of digital connections,
substantial number of connections have become part of the DTH category.
Dish TV strategy was encompassed keeping in mind these challenges as
well as maximizing the opportunity for DTH, presented by the Digital
Addressable Systems (''DAS'') mandate of the Government of India. To
spearhead the DTH advantage, Dish TV with a well crafted insight
re-positioned the brand in the space of passion for entertainment;
tapping into consumers who are passionate about their dose of
entertainment and establish Dish TV as an endpoint for all TV
entertainment needs.
With consumers seeking maximum value for their money, the Company
brought forth unparalleled offerings in form of lucrative entry offers,
schemes like 70 channels free for Lifetime, cash back offers to ensure
best competitive advantage. Carrying forward the spirit of innovation
and leadership, Dish TV unveiled its Standard Definition Box with
Recorder, thus redefining the recorder category.
The Company with focused enhancement in the pillars of Content, Service
and Technology continued to gain significant edge over the competition
prevailing in the DTH Industry. To ensure maximum coverage and
visibility around the digitization wave, incremental steps were made on
ground and in-shops. Dish TV carried expansion in service
infrastructure across India to cater to the massive demand and
providing quick service support to the customers.
With a robust sales and distribution network, Dish TV ensured strong
foothold in retail outlets combined with an All India Service Network.
In a service driven Industry, it is also pivotal for a Company to
enhance the existing subscriber experience by constantly designing and
offering services that match their dynamic needs. The strategy was to
position Dish TV as a service led brand with the objective of meeting
customer delight. With this endeavor, the Company introduced an
exclusive Dish delight program to recognize its valuable subscriber
base and benefit them with unique privileges such as Free relocation,
Free upgrade, Express queue etc.
The challenges to the DTH Industry includes successful implementation
of the Digitization process in phased manner, availability of satellite
capacity due to ever rising demand of the content, competitive
intensity, reasonable growth in Average Revenue Per User (''ARPU'') and
reasonable taxation structure.
SUBSIDIARY OPERATIONS SUBSIDIARY IN SINGAPORE
During the year under review, the name of Dish TV Singapore Pte.
Limited, which was your Company''s Wholly Owned Subsidiary (''WOS'') in
Singapore, was changed to Digital Network Distribution Pte. Limited on
March 12, 2013.
Further, upon approval of the Board, the shareholding of your Company
in Digital Network Distribution Pte. Ltd. (earlier known as Dish TV
Singapore Pte. Ltd.) was divested consequent to which Digital Network
Distribution Pte. Ltd. has ceased to be Subsidiary of your Company with
effect from April 1, 2013. The said divestment was carried out in
accordance with the provisions of Foreign Exchange Management (Transfer
or issue of any Foreign Security), Regulations, 2004 and other
applicable guidelines.
SUBSIDIARY IN SRI LANKA
During the year under review, your Company, upon the approval of Board
of Directors, incorporated a Joint Venture (''JV'') Company with Satnet
(Private) Limited, a DTH license holder in Sri Lanka, in the name and
style of Dish T V Lanka (Private) Limited on April 25, 2012 with a paid
up share capital of 1 million Sri Lankan Rupees. Your Company holds 70%
in the JV Company and Satnet (Private) Limited holds 30% in the said JV
Company. Your Company and Satnet (Private) Limited had entered into a
JV agreement on April 24, 2012.
The Ministry of Corporate Affairs, Government of India had allowed
general exemption to Companies from complying with Section 212 (8) of
the Companies Act, 1956, provided such companies publish the audited
Consolidated Financial Statements in the Annual Report. Your Board has
decided to avail the said general exemption from applicability of
provisions of Section 212 of the Companies Act, 1956, and accordingly,
the Annual Accounts of the Subsidiaries of the Company as on March 31,
2013 viz. Digital Network Distribution Pte. Ltd. and Dish TV Lanka
(Private) Limited are not being attached with the Annual Report of the
Company and the specified financial highlights of these Subsidiary
Companies are disclosed in the Annual Report, as part of the
Consolidated Financial Statements of the Company. The audited Annual
Accounts and related information of the Subsidiaries will be made
available, upon request and shall also be open for inspection at the
Registered Office of the Company, by any Shareholder.
As required under the Accounting Standard AS 21 - ''Consolidated
Financial Statements'', issued by the Institute of Chartered Accountants
of India (''ICAI'') and applicable provisions of the Listing Agreement
with the Stock Exchange(s), the Financial Statements of the Company
reflecting the Consolidation of the Accounts of its subsidiaries to the
extent of equity holding in these Companies are included in this Annual
Report.
HOLDING COMPANY
During the year under review, Direct Media Distribution Ventures
Private Limited ceased to be the Holding Company of your Company. As on
March 31, 2013, Direct Media Distribution Ventures Private Limited
holds 48,17,86,397 fully paid up equity shares (aggregating to 45.24%
of the share capital) of your Company.
LISTING
Your Company''s fully paid equity shares continue to be listed and
traded on BSE Limited (''BSE'') and the National Stock Exchange of India
Limited (''NSE''). Both these Stock Exchanges have nation-wide terminals
and hence facilitates the shareholders/investors of the Company in
trading the shares. The Global Depository Receipts (''GDR'') of the
Company are listed on the Luxembourg Stock Exchange. The Company has
paid annual listing fee for the Financial Year 2013-14 to the Stock
Exchanges and the annual custody fees to National Securities Depository
Limited (''NSDL'') and Central Depository Services (India) Limited
(''CDSL''), the Depositories of the Company.
SHARE CAPITAL
Upon the approval of the Shareholders, your Company increased its
Authorized Share Capital from Rs. 135,00,00,000/- (Rupees One Hundred
and Thirty Five Crores Only) divided into 135,00,00,000 Equity Shares
of Rs. 1/- each to Rs. 150,00,00,000/- (Rupees One Hundred and Fifty
Crores Only) divided into 150,00,00,000 Equity Shares of Rs. 1/- each
on November 26, 2012. Your Company has made necessary filings and
applications to the statutory authorities in this regard and requisite
approvals have been received.
During the year, your Company issued and allotted 461,300 equity shares
upon exercise of Stock Option by the Employees/Independent Directors of
the Company pursuant to Employee Stock Option Scheme - 2007 (''ESOP -
2007'') of the Company and these shares were duly admitted for trading
on NSE and BSE.
During the Financial Year 2008-09, your Company had come up with Rights
Issue of 518,149,592 equity shares of Rs. 1 each, issued at Rs. 22 per
share (including premium of Rs. 21 per share), payable in three
installments. Upon receipt of valid first and second call money, during
the year under review, the Company converted 459,308 equity shares from
0.50 paid up to 0.75 paid up and 2,499,507 equity shares from 0.75 paid
up to fully paid up.
Pursuant to the issue of further equity shares under ESOP and
subsequent to conversion of partly paid equity shares, the paid up
capital of your Company during the year has increased from Rs.
1,064,423,875 comprising of 1,061,701,440 equity shares of Rs. 1 each,
fully paid up, 2,062,513 equity shares of Rs. 1 each, paid up Rs. 0.75
per equity share and 659,922 equity shares of Rs. 1 each, paid up Rs.
0.50 per equity share to Rs. 1,064,779,289.5 comprising of
1,064,662,247 equity shares of Rs. 1 each, fully paid up, 22,314 equity
shares of Rs. 1 each, paid up Rs. 0.75 per equity share and 200,614
equity shares of Rs. 1 each, paid up Rs. 0.50 per equity share. As on
March 31, 2013, the Company has not received the valid Second call on
22,314 partly paid equity shares and first and second call on 200,614
partly paid equity shares.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs. 113,992.91 Lakhs, the Company
has received a sum of Rs. 113,959.03 Lakhs towards the Share
Application and Call Money as at March 31, 2013, the details of which
has been provided under the preceding heading.
The utilization of Rights Issue proceeds are placed before the Audit
Committee of the Board on Quarterly and Annual basis. Further, the
Company also provides the details of the utilization of Rights Issue
proceeds to the Monitoring Agency on half yearly basis and furnishes
the Monitoring Report to the Stock Exchanges.
The Board at its meeting held on May 28, 2009 approved to make changes
in the manner of usage of right issue proceeds. The manner of
utilization of rights issue proceeds as on March 31, 2013, is as under:
Particulars Amount
(Rs. in Lacs)
Repayment of loans 28,421.44
Repayment of loans received after
launch of the Rights Issue 24,300.00
General Corporate Purpose/
Operation Expenses 19,693.06
Acquisition of Consumer Premises 26,000.00
Equipment (CPE) including leased CPE
Issue Expenses 544.52
Total 98,959.03
The Eighth (8th) Monitoring Report for Half Year period, July 2012 -
December 2012 containing deviation from the original proposed
expenditure plan and in accordance with the revised plan was recorded
by the Audit Committee and the Board at their respective meetings and
necessary compliance in this regard had been carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (''GDR'') Offer of the Company for 117,035
GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000
fully paid equity shares of the Company were fully subscribed by Apollo
India Private Equity II (Mauritius) Limited. The underlying shares
against each of the GDRs were issued in the name of the Depository -
Deutsche Bank Trust Company Americas. As on March 31, 2013, 85,035 GDRs
have remained outstanding, the underlying shares of which forms part of
the existing paid up share capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2013, is as
under:
Particulars Amount
(Rs. in Lacs)
Assets purchases including CPE 7,669.88
Issue Expenses 344.63
Advance to Subsidiary 56.14
Repayment of Bank Loans 755.22
Operation Expenses 21,819.05
Less: Interest Earned (439.94)
Bank Balances 22,266.15
Total 52,471.13
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, as amended from time to time, your Board had authorized the
Remuneration Committee to administer and implement the Company''s
Employees Stock Option Scheme (ESOP - 2007) including deciding and
reviewing the eligibility criteria for grant and/or issuance of stock
options to the eligible Employees/Independent Directors under the
Scheme. Further, your Board also constituted an ESOP Allotment
Committee to consider, review and allot equity shares to the eligible
Employees/ Independent Directors exercising the stock options under the
Employee Stock Option Scheme (ESOP - 2007) of your Company.
During the period under review, the Remuneration Committee of the Board
granted 141,450 stock options at Rs. 68.10/- per stock option to the
eligible employee as per the ESOP - 2007.The ESOP Allotment Committee
of the Board, during the year, issued and allotted 461,300 fully paid
equity shares, upon exercise of the stock options by eligible
Employees/ Independent Directors under the ESOP - 2007.
Applicable disclosures relating to Employees Stock Options as at March
31, 2013, pursuant to Clause 12 (Disclosure in the Directors'' Report)
of the SEBI (Employees'' Stock Option Scheme and Employees'' Stock
Purchase Scheme) Guidelines, 1999 are given as ''Annexure A'' to this
Report.
A certificate to the effect that the ESOP - 2007 Scheme has been
implemented in accordance with the SEBI Guidelines and as per the
resolution passed by the members of the Company authorizing issuance of
the said ESOP, as prescribed under Clause 14 of the said Guidelines has
been issued by the Statutory Auditors of the Company. The said
certificate shall be available for inspection at the Annual General
Meeting of the Company and a copy of the same shall be available for
inspection at the Registered Office of the Company.
PUBLIC DEPOSITS AND LOANS / ADVANCES
During the year under review, your Company has not accepted any
Deposits under Section 58A and Section 58AA of the Companies Act, 1956
read with Companies (Acceptance of Deposits) Rules, 1975. Pursuant to
Clause 32 of the Listing Agreement, the particulars of loans/advances
given to Subsidiary Companies have been disclosed in the Annual
Accounts of the Company.
CORPORATE GOVERNANCE
Your Company continues to practice the principles of good Corporate
Governance over the years and lays strong emphasis on transparency,
accountability and integrity. Your Company believes that pursuing good
Corporate Governance practices is indispensable for sustaining any
business and generate long term value for all of its Stakeholders. The
Corporate Governance practice in place at your Company has a holistic
view with value based governance aiming at and committed towards
corporate social upliftment and social responsibility.
Your Company has documented internal governance policies and put in
place a formalized system of Corporate Governance which sets out the
structure, processes and practices of governance within the Company and
serves as a guide for day to day business and strategic decision making
in your Company.
Your Company is committed to benchmarking itself with global standards
for providing good Corporate Governance. It has put in place an
effective Corporate Governance System which ensures that the provisions
of Clause 49 of the Listing Agreement are duly complied with. The Board
has also evolved and adopted a Code of Conduct based on the principles
of Good Corporate Governance and best management practices being
followed globally.
Based on ''Corporate Governance Voluntary Guidelines 2009'' issued by the
Ministry of Corporate Affairs in December 2009, your Company has in
place a Nomination Committee to inter-alia evaluate the current process
of nominating / appointing Directors on the Board of the Company,
formulating guidelines for evaluation of candidature of individuals for
nominating and/or appointing as Director etc.
A separate detailed report on Corporate Governance pursuant to
requirement of Clause 49 of the Listing Agreement together with
Certificate issued by the Statutory Auditors of the Company on
compliance of the same forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review
as provided under Clause 49 of the Listing Agreement with the Stock
Exchanges in India is separately attached hereto and forms a part of
this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (''CSR'') is at the core of your
Company''s vision and mission which is achieved by focusing on the
interest of the employees, customers and shareholders of your Company
and the society at large. Your Company continues to strive for
sustainability in its operations by promoting integration of CSR into
the business strategy as well as its everyday functioning. Your Company
aims at managing its business processes in such a way so as to produce
an overall positive impact on the society.
As part of the Essel Group of Companies, your Company has at a unified
and centralized level, put in place a Corporate Social Responsibility
(CSR) policy which is based on a belief that a business cannot succeed
in a society that fails and therefore it is imperative for business
houses, to invest in the future by taking part in social-building
activities.
During the year under review, Essel Group continued to support cause of
Ekal Vidyalaya Foundation, an NGO that works to bring about basic
literacy and health awareness amongst the tribal and rural population
of India; Global Vipassana Foundation which helps propagate Vipassana,
the non-sectarian rational process of self-purification with the aim of
bringing about peace both within the individual and the society in
general; and Global Foundation for Civilizational Harmony, a body which
aims to create a peaceful and harmonious society.
POSTAL BALLOT
During the year under review, your Company sought the approval of the
Shareholders on the following matters, vide Postal Ballot Notice(s)
dated August 9, 2012 and October 18, 2012. The said notices along with
Postal Ballot Form and Business Reply Envelopes were duly sent to the
Shareholders of your Company and your Company also offered E-Voting
facility as an alternate option for voting by the Shareholders, which
enabled them to cast their votes electronically, instead of Physical
Postal Ballot Form. The results on the voting conducted through Postal
Ballot process were declared on October 17, 2012 and November 26, 2012
respectively.
I. Resolutions passed on October 17, 2012 vide Postal Ballot Notice
dated August 9, 2012
Resolution 1 - Alteration of the ''Other Objects'' clause of Memorandum
of Association of the Company.
Resolution 2 - Re-Appointment of Mr. Jawahar Lal Goel as the Managing
Director of the Company.
Resolution 3 - Consent under Section 314(1B) of the Companies Act, 1956
for revision in remuneration and terms of appointment of Mr. Gaurav
Goel.
Resolution 4 - Approval pursuant to Section 372A of the Companies Act,
1956.
II. Resolutions passed on November 26, 2012 vide Postal Ballot Notice
dated October 18, 2012
Resolution 1 - Increase of Authorised Share Capital of the Company and
consequent change in Clause V of the Memorandum of Association of the
Company relating to Share Capital.
Resolution 2 - Amendments to Articles of Association of the Company.
Resolution 3 - Increase In Foreign Investment Limits.
Resolution 4 - Raising of Funds through further Issue of Securities.
The procedure prescribed under Section 192A of the Companies Act, 1956,
read with the Companies (Passing of the Resolution by Postal Ballot)
Rules 2011, was adopted for both the Postal Ballots.
Further, details related to the Postal Ballot procedure adopted, voting
pattern and results thereof have been provided under the General
Meeting Section of Corporate Governance Report.
DIRECTORS
During the year under review, Dr. Pritam Singh, Independent
Non-Executive Director of your Company and Mr. Sanjay Hiralal Patel,
Alternate Director to Mr. Mintoo Bhandari (Non-Executive Nominee
Director) ceased to be the Directors of your Company due to their
resignation from the Board with effect from October 1, 2012 and October
18, 2012 respectively.
Also, Mr. Utsav Baijal was appointed as Alternate Director to Mr.
Mintoo Bhandari with effect from October 18, 2012.
In accordance with the provisions of Companies Act, 1956, Mr. Subhash
Chandra, Non-Executive Director and Mr. Eric Zinterhofer, Independent
Non-Executive Director, will retire by rotation at the ensuing Annual
General Meeting of your Company and being eligible, have offered
themselves for re-appointment. Your Board has recommended their
re-appointment in the overall interest of your Company.
A brief resume, nature of expertise, details of directorship in other
Indian Public Limited Companies, of the Directors proposing their
re-appointment, along with their shareholding in the Company as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges is included in the Report on Corporate Governance forming
part of this Annual Report.
AUDITORS
The Statutory Auditors M/s B S R & Co., Chartered Accountants, Gurgaon,
having Firm Registration No. 101248W, hold office until the conclusion
of the ensuing Annual General Meeting and are eligible for
re-appointment.
Your Company has received confirmation from the Auditors to the effect
that (i) their re-appointment, if made would be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956; (ii) that
they are not disqualified for re-appointment within the meaning of
Section 226 of the said Act and (iii) they have been provided a valid
certificate from the Peer Review Board of the Institute of Chartered
Accountants of India (ICAI).
AUDITORS'' REPORT
The report of the Statutory Auditor of the Company contains
qualification statement.
The response of the Management to the comment of the Statutory Auditor
mentioned at serial number 4 of the Audit Report is as follows - The
Lease rental is a financial transaction based on cost of fund, taxation
and cash flow consideration. Depreciation is not directly linked with
the lease period but it is more to do with life of the set top box,
repair, maintenance and other service related issues. However, your
Company has already put in place the process of charging depreciation
and amortisation of lease rentals on Consumer Premises Equipment
(''CPE'') in terms of the Accounting Standard - 19 from April 1, 2012.
The lease rental and depreciation period is synchronised without any
gap in recognition of both the items. Both of them are
amortized/depreciated over a period of five years.
COST AUDIT
In compliance with The Companies (Cost Audit Report) Rules, 2011 and
Cost Accounting Records (Telecommunication Industry) Rules, 2011 issued
by the Central Government, your Company has re-appointed M/s Chandra
Wadhwa & Co., Cost Accountants (Membership Number - 6797), as the Cost
Auditor of your Company for carrying out the audit of cost accounts,
cost records & cost statements and submission of Cost Audit Report &
Compliance Report for the Financial Year 2012-13. The due date for
submission of the Cost Audit Report and Compliance Report for the
financial year 2012-13 is September 30, 2013.
For the Financial Year 2011-12, The Ministry of Corporate Affairs,
Government of India vide its General Circular No. 2/2013 dated January
31, 2013 allowed the Companies to file their Cost Audit Report and
Compliance Report for the Financial Year 2011-12 in extensible Business
Reporting Language (''XBRL) mode, within 180 days from the close of the
Financial Year or by February 28, 2013, whichever is later. In
compliance with the same, your Company has duly submitted the Cost
Audit Report along with requisite Annexures and attachments in XBRL
mode with the Ministry of Corporate Affairs, Government of India on
January 29, 2013.
Your Board, upon recommendation of the members of the Audit Committee,
have approved the re- appointment of M/s Chandra Wadhwa & Co. as the
Cost Accountant for the Financial Year 2013-14. M/s Chandra Wadhwa &
Co. has furnished their consent, compliance certificate and
affirmations pursuant to Sections 224(1B), 233B, 226(3) and 226(4) of
the Companies Act, 1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Your Company is in the business of providing Direct- to- Home (''DTH'')
services. Since the said activity does not involve any manufacturing
activity, most of the Information required to be provided under Section
217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988, are not applicable.
However the information, as applicable, are given hereunder:
CONSERVATION OF ENERGY:
Your Company, being a service provider, requires minimal energy
consumption and every endeavor is made to ensure optimal use of energy,
avoid wastages and conserve energy as far as possible.
TECHNOLOGY ABSORPTION:
In its endeavor to deliver the best to its viewers and business
partners, your Company is constantly active in harnessing and tapping
the latest and best technology in the Industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
Particulars of foreign currency earnings and outgo during the year are
given in Note no. 30, 31 and 32 to the notes to the Accounts forming
part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Long term development of human capital and strategic employment of
retention tools is at the core of your Company''s strategy. Your Company
believes that its Employees are the most valuable assets and vital for
the sustained growth of the Company. We at Dish TV, encourage
innovation, meritocracy and the pursuit of excellence by setting up
robust recruitment and human resource management policies.
Your Company has young and vibrant team of highly qualified
professionals at all levels.To retain and develop these employees, your
Company has been working with an objective to enhance employee
competence through various initiatives and maximizing employee
contribution towards the organizational goals.
The Management of your Company aims at developing such strategies that
not only promise attraction of best talent in your Company but also
ensures their retention by building trust and instilling devotion in
the employees at all levels. Your Company aims to incorporate the
planning and control of manpower resource into the corporate level
plans so that all resources are used together in the best possible
combination. Pay revisions and other benefits are designed in such a
way to compensate for good performance of the employees of your
Company. Your Company has also put in place a feedback mechanism and
has taken steps towards employee growth and sustaining high level of
motivation amongst all.
PARTICULARS OF EMPLOYEES
Your Board wishes to extend its appreciation to all the employees of
the Company for their contribution in the business of the Company
during the year under review. The information required under Section
217(2A) of the Companies Act, 1956 (''Act'') read with the Companies
(Particulars of Employees) Rules, 1975, is required to be set out in an
annexure to this report. However, in terms of Section 219(1)(b) of the
Act, the Report and Accounts are being sent to the shareholders
excluding the aforesaid annexure. Any shareholder interested in
obtaining copy of the same may write to the Company Secretary at the
Corporate Office of the Company. None of the employees, except Mr.
Jawahar Lal Goel, mentioned in the said list are related to any
Director of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 217(2AA) of the Companies Act,
1956, as amended from time to time, in relation to the Annual Financial
Statements for the Financial Year 2012-13, your Directors confirm the
following:
a) The Financial Statements have been prepared on a ''going concern''
basis and in such preparation the applicable Accounting Standards had
been followed with proper explanation relating to material departures;
b) Accounting policies selected were applied consistently and the
judgments and estimates related to the Financial Statements have been
made on a prudent and reasonable basis, so as to give a true and fair
view of the state of affairs of the Company as at March 31, 2013, and
of the profit or loss of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities; and
d) Adequate internal systems and controls are in place to ensure
compliance of laws applicable to the Company.
INDUSTRIAL OPERATIONS
The Company maintained healthy, cordial and harmonious industrial
relations at all levels. The enthusiasm and unstinting efforts of the
employees have enabled your Company to remain at the leadership
position in the Industry. It has taken various steps to improve
productivity across the organization.
ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has
ensured our success in the past and will do so in future. Your
Directors acknowledge with sincere gratitude the co-operation and
assistance extended by the Central and State Governments, the Ministry
of Information and Broadcasting (MIB''), the Department of
Telecommunication (''DOT'') and Foreign Investment Promotion Board
(''FIPB''), Ministry of Finance, the Telecom Regulatory Authority of
India (''TRAI''), the Stock Exchanges - and other stakeholders including
viewers, vendors, bankers, investors, service providers as well as
other regulatory and government authorities.
Your Board also takes this opportunity to express its deep gratitude
for the continued co-operation and support received from its valued
stakeholders.
For and on behalf of the Board
Jawahar Lal Goel Arun Duggal
Managing Director Director
Place : Noida
Date : 23 May 2013
Mar 31, 2012
To the Members,
The Directors are pleased to present the Twenty Fourth (24th) Annual
Report together with the Audited Statement of Accounts of the Company
for the Financial Year ended March 31, 2012.
FINANCIAL RESULTS
The Financial Performance of your Company for the year ended March 31,
2012 is summarized below:
(Rs./Thousand)
Particulars Year ended Year ended
March 31, 2012 March 31,2011
Sales & Services 19,578,236 14,365,518
Other Income 385,904 880,295
Total Income 19,964,140 15,245,813
Total Expenses 21,552,638 17,142,719
Profit/(Loss) before (1,588,498) (1,896,906)
Tax
Provision for Taxation
(net)
Profit/(Loss) after (1,588,498) (1,896,906)
Tax
Profit/(Loss) for the (1,588,498) (1,896,906)
Year
Add: Balance brought (15,934,422) (14,037,516)
forward
Amount available for (17,522,920) (15,934,422)
appropriations
Appropriations:
Dividend Nil Nil
Tax on Dividend Nil Nil
General Reserve Nil Nil
Balance Carried (17,522,920) (15,934,422)
Forward
DIVIDEND
Your Directors have decided not to recommend any dividend for the
Financial Year ended March 31, 2012.
BUSINESS OVERVIEW
The Indian Broadcasting Industry is going through an evolutionary
phase. Limited number of channels and sub- standard picture quality has
become a thing of the past.
Entertainment through satellite dish though a common phenomenon in the
western world, was introduced in India by dishtv, which has brought
about a sea-change in the Indian television market. The brand has
changed consumer preferences and enhanced the standards of television
viewership by offering digital picture quality with stereophonic sound
and uninterrupted viewing of more than 400 channels and services. With
value added services like Movie on Demand, Books Active, Active Games
to name a few, owning a dishtv is more than just channel entertainment.
Dishtv has left no stone unturned in providing outstanding services
that has the viewers glued to their television screens.
The DTH industry consolidated its gain of last 5 years and continued
the upward march in terms of customer acquisition, launch of new
products, evolution of new technologies and wide variety of customer
propositions in terms of acquisition & retention schemes. The industry
added more than 10 Million subscribers during the period under review.
The industry was quite ahead of the numbers acquired by the digital
cable operators during this period.
Strong brand proposition, differentiated customer offerings, launch of
new High Definition (HD) Channels and increase in the number of channel
offering by the industry was the key highlights of the year gone by.
Despite intense competition, your Company was able to maintain its
leadership position by virtue of having the maximum number of
registered subscribers among all the DTH operators. Customer delight
was the main theme of the year under review facilitated by door step
services and wider reach.
In view of the growing appetite of the Indian consumers demanding more
channels, your Company proactively contracted for a new satellite
located in the vicinity of the existing satellite to augment the
facility of High Definition channels along with conventional Standard
Definition (SD) channels. During the year under review, your Company
acquired additional transponders on the Asiasat 5 satellite thus
increasing its total transmission bandwidth to 648 MHz from 432 MHz
previously. The increased transponder capacity enabled your Company to
increase its Standard Definition channel capacity to over 320 and High
Definition capacity to over 30 which is substantially higher than any
competing DTH operator in both HD as well as SD transmission. With the
availability of additional capacity, your Company is far ahead of the
competition in respect of satellite bandwidth for provision of
additional channels and services to the subscribers. This will continue
to be a differentiator and game changer in the months to come. During
the year, your Company launched Niche channels like Khana Khazana, Ten
Golf, MTune - HD etc. Your Company will continue to look for
opportunities of similar nature to be ahead of the competition and
create value for the Stakeholders.
The Digital Addressable Systems (DAS), a long awaited event for the
development and growth of the cable and satellite sector, which has now
been notified by the Government to become applicable in four phases
will push the industry towards a new paradigm benefiting all the
Stakeholders of the industry including the Broadcasters, Distributors,
DTH operators, the Government and above all - the Consumers.
The DTH industry is expected to grow faster and stronger in the areas
where DAS has been notified by the Government because of brand equity,
execution strength, understanding of the consumer behavior, well
established sales and distribution outlets, value proposition to the
consumer and above all - best quality service at the door steps of the
customers.
The year under review also saw the emergence of Advertisement sales as
a new and growing revenue stream. In this segment, your Company
established its presence, closing the financial year at a net revenue
of Rs. 15.68 crores (FY 11 - 12), against last year's revenue of Rs. 5.65
crores, an increase of 178%. The brand count of advertisers on Dish TV
increased by 279% with leading global brands / organizations such as
Microsoft, Pepsi, Coca-Cola, P&G, HUL advertising on our platform. In
fact, Dish TV was the only DTH platform in India where Microsoft
launched its global Windows 7 campaign. The metrics based on
advertisers and broadcasters requirements include CPT (cost per
thousand), digital ratings and multiple case studies - all showcasing
Dish TV as THE new medium to be present on.
Various innovations were experimented with, in this year the advertiser
sponsored Free to Subscriber MOD (which saw an increase of almost 300%
in orders in that period), the advertiser sponsored Open-to-all MOD
format (reaching almost 77% of our base), default boot up screen,
banners on the EPG, brand slugs on Buzz (the default landing channel),
Red bug innovations on Buzz & MOD channels, sponsorship of free to
subscriber and paid for by subscriber by leading advertisers, making
broadcasters the default landing channel leading to an increase in
digital ratings and many more, which have all been established as case
studies to be monetized with more brands this year.
Your Company continued its efforts to bring value and additional
features in its services. Your Company launched a High Definition Set
Top Box with Digital Video Recoding facility with the facility of
getting to record as much content as a subscriber wishes to. The launch
of HD - DVR was a big stride in the direction of acquiring the largest
HD subscriber base.
With deep market understanding and a well crafted consumer insight,
entertainment as an interest was immaculately matched to the emotion of
Passion. For every television lover, it is their endless passion for
entertainment which makes them demand more content, best technology and
superior experience. Some people go to any extent to catch their
favorite dose of entertainment and dishtv, as a brand wants to target
those thought leaders in the world of entertainment and uniquely
positioned the brand to stand for Passion for entertainment i.e. Dish
Sawaar Hai. With a first of its kind initiative in the industry, an all
exclusive dishtv anthem communicates the passion and zeal of dishtv to
its consumers across segments that are practically run by TV
entertainment today. The brand is built around their commitment to
provide the most technologically advanced products with the maximum
content and excellent services that reflects the eminence of not only
the market leader but a set of people behind dishtv who are thought
leaders in the world of entertainment.
The key challenges in the future will be harnessing the opportunities
created out of DAS regime, containing the cost of fund, steep taxation,
satiate the ever increasing appetite for new content.
SUBSIDIARY OPERATIONS
During the year under review, Essel Business Processes Limited (earlier
known as Integrated Subscriber Management Services Limited) ceased to
be a subsidiary of your Company. For the purpose of enabling your
Company to have enhanced focus on its core DTH operations so that it
can expand customer base, raise revenue contributions through product
innovations and provisions of various value added services, your
Company divested its entire shareholding in Essel Business Processes
Limited on June 1, 2011. Accordingly, Essel Business Processes Limited
ceased to be a subsidiary of your Company from the date of transfer.
Subsidiary in Singapore
Your Company, on the approval of the Board of Directors, has
incorporated a wholly owned subsidiary in Singapore under the name and
style of "Dish TV Singapore Pte. Ltd." The said Company is engaged in
providing DTH related service. The subsidiary company has been in
operation since November 2011.
The Ministry of Corporate Affairs, Government of India, has allowed
general exemption to Companies from complying with Section 212 (8) of
the Companies Act, 1956, provided such companies publish the audited
consolidated financial statements in the Annual Report. Your Board has
decided to avail the said general exemption from applicability of
provisions of Section 212 of the Companies Act, 1956, and accordingly,
the Annual Accounts of the Subsidiary of the Company viz. Dish TV
Singapore Pte. Ltd., for the financial year ended March 31, 2012 are
not being attached with the Annual Report of the Company and the
specified financial highlights of the said subsidiary company are
disclosed in the Annual Report, as part of the Consolidated financial
statements. The audited Annual Accounts and related information of the
subsidiary will be made available, upon request and also be open for
inspection at the Registered Office, by any Shareholder.
As required by the Accounting Standard AS - 21 issued by the Institute
of Chartered Accountants of India and Listing Agreement with the Stock
exchanged) the financial statements of the Company reflecting the
Consolidation of the Accounts of its subsidiaries to the extent of
equity holding of the Company in these Companies are included in this
Annual Report.
Subsidiary in Sri Lanka
Your Company, on the approval of the Board of Directors, formed a Joint
Venture Company with Satnet (Private) Limited, a DTH License holder in
Sri Lanka, in the name and style of Dish T V Lanka (Private) Limited in
Sri Lanka in April 2012. Your Company holds 70% of the share capital in
the said Subsidiary Company and the balance 30% is being held by Satnet
(Private) Limited. The Management is in the process of initiating the
commercial operations of the Subsidiary Company.
HOLDING COMPANY
Direct Media Distribution Ventures Private Limited (earlier known as
Dhaka Warriors Sports Private Limited), a Company incorporated in India
and being a part of
Promoter Group, held 515,916,648 fully paid up equity shares
(aggregating to 48.51 % of the paid up share capital) of your Company
and it acquired additional 28,975,000 fully paid up equity shares of
the Company on December 26, 2011. Consequent to such acquisition, its
aggregate shareholding in the Company increased to 544,891,648 fully
paid up equity shares i.e. 51.19% of the paid up share capital of the
Company and thus Direct Media Distribution Ventures Private Limited
became the Holding Company of your Company.
As on March 31, 2012, Direct Media Distribution Ventures Private
Limited holds 637,212,260 fully paid up equity shares constituting
59.86% of the paid up share capital of the Company.
SHARE CAPITAL
During the year, your Company issued and allotted 447,340 fully paid
equity shares upon exercise of Stock Options by the employees under the
'ESOP Scheme - 2007' of the Company.
During the Financial Year 2008-09, your Company had come up with Rights
Issue of 51,81,49,592 equity shares of 7 1 each, issued at 7 22 per
share (including premium of 7 21 per share), payable in three
installments. Upon receipt of valid first and second call money, during
the year under review, the Company converted 307,331 equity shares from
7 0.50 paid up to 7 0.75 paid up and 313,464 equity shares from 7 0.75
paid up to fully paid up.
Pursuant to the issue of further shares under ESOP and subsequent to
conversion of partly paid shares, the paid up capital of your Company
during the year has increased from 7 1062,975,747 comprising of
1060,940,636 equity shares of 7 1 each, fully paid up, 2,068,646 equity
shares of 7 1 each - paid up 7 0.75 per share and 967,253 equity shares
of 7 1 each - paid up 7 0.50 per share to 7 1064,423,875 comprising of
1061,701,440 equity shares of 7 1 each, fully paid up, 2,062,513 equity
shares of 7 1 each - paid up 7 0.75 per share and 659,922 equity shares
of 71 each - paid up 7 0.50 per share. As on March 31, 2012 the Company
has not received the valid Second call on 2,062,513 partly paid shares
and first and second call on 659,922 partly paid shares.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of 7 113,992.91 Lakhs, your Company
has received a sum of 7 113,722.32 Lakhs your Company has received a
sum of Rs. 113,722.32 Lakhs towards the Share application and call money
as at March 31, 2012, the details of which have been provided under the
preceding heading.
The utilization of Rights Issue proceeds are placed before the Audit
Committee on quarterly basis. The utilization is duly certified by the
Statutory Auditors on half yearly & annual basis. Further, the Company
also provides the details of the utilization of Rights Issue proceeds
to the Monitoring Agency on half yearly basis and furnishes the
Monitoring Report to the Stock Exchanges.
Your Board at its meeting held on May 28, 2009 approved to make change
in the manner of usage of right issue proceeds. The manner of
utilization of rights issue proceeds as on March 31, 2012, is as under:
Particulars Amount
(Rs. In Lacs)
Repayment of loans 28,421.44
Repayment of loans received after
launch of the 24,300.00
Rights Issue
General Corporate Purpose/Operational 19,407.28
Expenses
Acquisition of Consumer Premises
Equipment 26,000.00
(CPE) including leased CPE
Issue Expenses 544.52
Total 98,673.24
The Sixth Monitoring Report for half year period, July 2011
- December 2011 containing deviation from the original proposed
expenditure plan and in accordance with the revised plan was recorded
by the Audit Committee and the Board at their respective meetings and
necessary compliance in this regard had been carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (GDR) Offer of the Company for 117,035
GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000
fully paid equity shares of the Company were fully subscribed by Apollo
India Private Equity II (Mauritius) Limited. The underlying shares
against each of the GDRs were issued in the name of the Depository
- Deutsche Bank Trust Company Americas. As on March 31, 2012, 117,035
GDRs have remained outstanding, the underlying shares of which forms
part of the existing paid up capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2012, is as
under:
Particulars Amount
(Rs. In Lacs)
Assets purchases including CPE 7,669.88
Issue Expenses 344.63
Advance to subsidiary 56.14
Repayment of Bank Loans 755.22
Operational Expenses 21,064.86
Less: Interest Earned (439.94)
Margin Money
Bank Balances 20,633.77
Total 50084.55
EMPLOYEE STOCK OPTION SCHEME
In pursuance of the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, your Board had authorized the Remuneration Committee to
administer and implement the Company's Employee Stock Option Scheme
(ESOP - 2007) including deciding and reviewing the eligibility criteria
for grant and /or issuance of stock options to the eligible employees /
directors under the Scheme. Further, in view of the growing frequency
of allotment of equity shares pursuant to exercise of stock options by
eligible employees / directors, your Board constituted an ESOP
Allotment Committee to consider, review and allot equity shares to the
eligible Employees / Directors exercising the stock options under the
Employee Stock Option Scheme (ESOP - 2007) of the Company.
During the period under review, your Company allotted 447,340 fully
paid equity shares upon exercise of the stock options by eligible
employee under the ESOP - 2007. During the year, your Board approved
the grant of 125,000 shares to the eligible employees in pursuance to
the ESOP - 2007. Applicable disclosures relating to Employees Stock
Options as at March 31, 2012, pursuant to Clause 12 (Disclosure in the
Directors' Report) of the SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999, are given as
'AnnexureA to this Report.
A certificate, as prescribed under Clause 14 of the said Guidelines,
obtained from Statutory Auditors shall be available for inspection at
the Annual General Meeting and a copy of the same shall be available
for inspection at the registered office of the Company.
PUBLIC DEPOSITS AND LOANS / ADVANCES
During the year, your Company has not accepted any Deposits under
Section 58A and Section 58AA of the Act, read with Companies
(Acceptance of Deposits) Rules, 1975.
Pursuant to Clause 32 of the Listing Agreement, the particulars of
loans/advances given to subsidiary have been disclosed in the Annual
Accounts of the Company.
CORPORATE GOVERNANCE
Your Company has in place the best governance practice as laid down in
Clause 49 of the Listing Agreement with the Stock Exchanges. Your
Company has documented internal governance policies and put in place a
formalized system of Corporate Governance which sets outs the
structure, processes and practices of governance within the Company and
serves as a guide for day to day business and strategic decision making
in the Company.
Based on 'Corporate Governance Voluntary Guidelines 2009' issued by the
Ministry of Corporate Affairs in December 2009, your Board at its
meeting held on July 20, 2011 has constituted a Nomination Committee of
your Board to inter- alia evaluate the current process of nominating /
appointing Directors on the Board of your Company, formulating
guidelines for evaluation of candidature of individuals for nominating
and/or appointing as a Director etc.
Your Company is in compliance of all mandatory requirements regarding
Corporate Governance as stipulated under Clause 49 of the listing
agreement with the Stock Exchanged). For the Financial Year ending
2012, the Compliance Report is provided in the Corporate Governance
section of the Annual Report. A certificate issued by the Statutory
Auditors of the Company on compliance of the conditions of Corporate
Governance stipulated in Clause 49 of the listing agreement with the
Stock Exchanged) forms part of the Corporate Governance Report.
The report on Corporate Governance has been separately provided in this
Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review
as provided under Clause 49 of the Listing Agreement with the Stock
Exchanges in India is separately attached hereto and forms a part of
this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is the continuing commitment by
business to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families
as well as of the local community and society at large. Your Company
aims at managing its business processes in such a way so as to produce
an overall positive impact on the society. CSR is at the core of your
Company's vision and mission which is achieved by focusing on the
interest of the employees, customers and shareholders of the Company
and the society at large.
As part of the Essel Group of Companies, your Company has at a unified
and centralized level, put in place a Corporate Social Responsibility
(CSR) policy which is based on a belief that a Business cannot succeed
in a society that fails and therefore it is imperative for business
houses, to invest in the future by taking part in social-building
activities.
During the year under review, Essel Group continued to support cause of
Ekal Vidyalaya Foundation, an NGO that works to bring about basic
literacy and health awareness amongst the tribal and rural population
of India; Global Vipassana Foundation which helps propagate Vipassana,
the non-sectarian rational process of self-purification with the aim of
bringing about peace both within the individual and the society in
general; and Global Foundation for Civilizational Harmony, a body which
aims to create a peaceful and harmonious society.
POSTAL BALLOT
During the year, the Company did not pass any resolution through postal
ballot process prescribed under Section 192A of the Companies Act, 1956
read with Companies (Postal Ballot) Rules, 2011.
DIRECTORS
In accordance with the provisions of Companies Act, 1956, Mr. Arun
Duggal and Dr. Pritam Singh, Directors, retire by rotation at the
ensuing Annual General Meeting of the Company and being eligible, have
offered themselves for re-appointment. Your Board has recommended their
re- appointment in the overall interest of the Company.
Brief profile of the Directors proposed to be re-appointed, has been
included in the Report on Corporate Governance forming part of the
Annual Report.
AUDITORS
The Statutory Auditors M/s B S R & Co., Chartered Accountants, Gurgaon,
having Firm Registration No. 101248W, hold office until the conclusion
of the ensuing Annual General Meeting and are eligible for
re-appointment.
Your Company has received confirmation from the Auditors to the effect
that (i) their reappointment, if made would be within the limits
prescribed under Section 224(1 B) of the Companies Act, 1956; (ii) that
they are not disqualified for reappointment within the meaning of
Section 226 of the said Act and (iii) they have been provided a valid
certificate from the Peer Review Board of the Institute of Chartered
Accountants of India.
AUDITORS' REPORT
The report of the Statutory Auditor of the Company contains
qualification statements.
The response of the Management to the comment of the Statutory Auditor
mentioned at serial number 5 (f) of the Audit Report is as follows -
The Lease rental is a financial transaction based on cost of fund,
taxation and cash flow consideration. Depreciation is not directly
linked with the lease period but it is more to do with life of the set
top boxes, repair, maintenance and other service related issues.
However the Company has already put in place the process of charging
depreciation on Consumer Premises Equipment in terms of the Accounting
Standard 19 from April 01, 2012.
The response of the Management to the comment of the Statutory Auditor
mentioned at serial number 5 (g) of the Audit Report is as follows -
The Company had received a notice from Income Tax Department about the
short deduction of TDS on account of payment made to various content
providers. We are firmly of the opinion, on the basis of various
judicial pronouncements and legal advice received, that we are not
required to provide for such short deduction.
The response of the Management to the comment of the Statutory Auditor
mentioned in Serial (viii) of the Annexure to the Auditors' Report is
as follows - The relevant provisions were made applicable to the
Company in the current financial year and your Company immediately
initiated steps to develop and put in place infrastructure and process
for implementation of the same. The process of integration of the
records with SAP and the IT systems have been completed. Further,
though the Audit of Cost Records are not mandatorily applicable for the
Financial Year 2011-12, your Company has proactively appointed M/s
Chandra Wadhwa & Co., Cost Accountants as the Cost Auditor of the
Company for carrying out the said audit for the Financial Year 2011-12
and issuance of necessary report.
The response of the Management to the comment of the Statutory Auditor
mentioned in Serial (ix) (a) of the Annexure to the Auditors' Report is
as follows - The Entertainment Tax is a state subject and in the year
under review, some additional states have imposed entertainment tax on
the DTH services. The Company has been proactive in providing
information and depositing taxes / levy / fee to the Government
Authorities within the prescribed time. The delay in depositing the
Entertainment tax has been due to legal and procedural issues.
COST AUDIT
The Company has appointed M/s Chandra Wadhwa & Co., Cost Accountants,
as the Cost Auditor of the Company for carrying out the Cost Audit for
the Financial Year 2011 - 12 and issuance of necessary report. The due
date for submission of the Cost Audit Report for the financial year
2011 -12 is September 30, 2012.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Your Company is in the business of providing Direct to Home services.
Since the said activity does not involve any manufacturing activity,
most of the Information required to be provided under Section 217(1
)(e) of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988, are
not applicable.
However the information, as applicable, aregiven hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy
consumption and every endeavor is made to ensure optimal use of energy,
avoid wastages and conserve energy as far as possible.
Technology Absorption:
In its endeavor to deliver the best to its viewers and business
partners, your Company is constantly active in harnessing and tapping
the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are
given in Note No. 29, 30 and 31 to the notes to the Accounts forming
part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Human Resource Management continues to be the focus area arising out of
intense competition in the sector and adoption of new technologies,
contemporary practices and cutting edge customer delivery system. This
acts as one of the differentiator in our customer satisfaction matrix
vis-a- vis the peer group and rising expectation of the subscribers.
During the year, various programmes were initiated to upgrade the skill
of the human resource of the Company. The management of your Company
aims at developing such strategies that not only promise attraction of
best talent into the Company but also ensures their retention by
building trust and instilling devotion in them. Your Board believes
that employees are vital to the Company and hence your Company aims to
incorporate the planning & control of manpower resource into the
corporate level plans so that all resources are used together in the
best possible combination. Pay revisions and other benefits are
designed in such a way to compensate for good performance of the
employees of your Company.
The talent base of your Company has steadily increased and your Company
has created a favorable work environment which encourages innovation
and meritocracy.
The Company has also put in place a scalable recruitment and human
resource management process which ensures retention of competent
employees.
PARTICULARS OF EMPLOYEES
Your Board wishes to extend its appreciation to all the employees of
the Company for their exceptional contribution in the business of the
Company during the year under review. The information required under
Section 217(2A) of the Companies Act, 1956 ('Act') read with the
Companies (Particulars of Employees) Rules, 1975, is required to be set
out in an annexure to this report. However, in terms of Section
219(1)(b) of the Act, the Report and Accounts are being sent to the
shareholders excluding the aforesaid annexure. Any shareholder
interested in obtaining copy of the same may write to the Company
Secretary at the Corporate Office. None of the employees, except Mr.
Jawahar Lai Goel, listed in the said annexure are related to any
Director of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, in relation to the Annual Financial Statements for the
Financial Year 2011-12, your Directors confirm the following:
a) The Financial Statements have been prepared on a 'going concern'
basis and in such preparation the applicable accounting standards had
been followed with proper explanation relating to material departures;
b) Accounting policies selected were applied consistently and the
judgments and estimates related to the financial statements have been
made on a prudent and reasonable basis, so as to give a true and fair
view of the state of affairs of the Company as at March 31, 2012, and
of the profit or loss of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities; and
d) Adequate internal systems and controls are in place to ensure
compliance of laws applicable to the Company.
ACKNOWLEDGEMENT
Your Board takes this opportunity to place on record its appreciation
for the dedication and commitment of employees shown at all levels that
has lead to the success of your Company. Your Directors are obliged and
express gratitude to the continued support and assistance received from
the Central and State Governments, The Ministry of Corporate Affairs
(MCA), the Ministry of Information and Broadcasting (MIB), the
Department of Telecommunication and Foreign Investment Promotion Board
(FIPB), Ministry of Finance, the Telecom Regulatory Authority of India
(TRAI), the Stock Exchanges - and other Stakeholders including viewers,
vendors, bankers, investors, service providers as well as other
regulatory and Government Authorities.
For and on behalf of the Board
Jawahar Lal Goel B D Narang
Managing Director Director
Place: Noida
Date: 29 May 2012
Mar 31, 2011
To the Members,
The Directors are delighted to present the Twenty Third Annual Report
together with the Audited Statement of Accounts of the Company for the
financial year ended March 31, 2011.
FINANCIAL RESULTS
The Financial Performance of your Company for the year ended March 31,
2011 is summarized below:
(Rs. / Thousand)
Particulars Year ended Year ended
March 31, 2011 March 31, 2010
Sales & Services 14,365,518 10,847,945
Other Income 8,80,295 6,86,071
Total Income 15,245,813 11,534,016
Total Expenses 17,142,719 14,155,599
Profit/(Loss) before Tax (1,896,906) (2,621,583)
Provision for Taxation
(net) - (258)
Profit/(Loss) after Tax (1,896,906) (2,621,325)
Profit/(Loss) for the Year (1,896,906) (2,621,325)
Add: Balance brought
forward (14,037,516) (11,416,191)
Amount available for
appropriations (15,934,422) (14,037,516)
Appropriations :
Dividend Nil Nil
Tax on Dividend Nil Nil
General Reserve Nil Nil
Balance Carried
Forward (15,934,422) (14,037,516)
BUSINESS OVERVIEW
The penetration in Direct to Home (DTH) is happening at a much faster
rate than expected under continued investment by the DTH players and
increase in the affordability on account of rise in disposable income.
The industry added 13.5 Million subscribers in the period under review
as against 8.5 Million subscribers in the previous period. DTH
accounted for more than 70% of the incremental cable and satellite
homes during the year under review leaving only marginal share for the
Analog and Digital cable platform. This phenomenon is likely to
continue which would be further led by the digitalization push by the
Government, lower entry cost in the DTH service and wide variety of
choice being offered by the DTH operators.
During the year under review, your Company added almost double the
number of subscribers as compared to the previous year and was also
ahead of the competition on all aspects including incremental
subscriber acquisition and overall subscriber base. Your Company
continues to retain the leadership position in the DTH segment holding
31% of the total DTH subscriber base. The investment made by the
Company in brand building, creation of sales and distribution
infrastructure, expansion of service outlets, retaining and training
the talent have reaped rich fruits and are likely to be the key
differentiator in the days to come.
Our long term Agreements with the content providers, satellite service
providers and other vendors gave the key edge in terms of cost,
competitiveness and margin push. The rate of growth of revenue
continues to be much higher than rate of increase in cost.
Your Company understands that the next level of DTH revolution will be
on technology absorption and enhancement in revenue by proper mix of
content layered with new value added services. In view of the same,
your Company acquired additional bandwidth to augment the capacity in
order to be able to provide the maximum number of channels. Going
forward, this will also be a key differentiator among all the DTH
players. Your Company also became the leading HD service provider of
the country and the push towards acquiring the HD customers was
supported by various tie-ups including the tie-up with Samsung, a key
player in HD TV market.
The year gone by saw major sporting events like FIFA World Cup, ICC
World Cup, Common Wealth Games, Indian Premier League etc. being
conducted all across the globe which resulted in hightended activity
around the DTH industry, resulting into the phenomenal growth of the
industry, both in terms of acquisition as well as revenue. To further
strengthen the brand positioning and visibility, your Company also
associated with Kolkata Knight Riders for the IPL 3 season as an
Associate Brand Sponsor.
The key challenges in the future will be to manage subsidy being
offered to the subscribers on the DTH hardware, steep taxation, slow
growth in ARPU and unorganized cable sector.
COPORATE RESTRUCTURING & SUBSIDIARIES
Your Directors approved the Composite Scheme of Amalgamation and
Arrangement between the Company, Agrani Satellite Services Limited
(ASSL), Integrated Subscriber Management Services Limited (ISMSL), to
demerge the Non DTH business of the Company into ISMSL, followed by
merger of ASSL with ISMSL with effect from March 31, 2010, being the
Appointed Date. The Hon'ble High Court of Delhi, vide its order dated
March 03, 2011 and corrigendum dated March 31, 2011 was pleased to
approve the said Scheme and accordingly the Scheme has been given
effect to in the Annual Financial Statements from the Appointed date of
March 31, 2010.
Upon effectiveness of the said Scheme, ASSL stands amalgamated with
ISMSL from the Appointed Date of March 31, 2010. ISMSL divested its
entire holdings in Agrani Convergence Ltd during the Financial Year
2010-11 and consequently, Agrani Convergence Limited ceases to be a
Subsidiary of your Company. In order to further simplify the Corporate
Structure and to capitalize the growth prospects, the Board felt that
it is necessary for the Company to have enhanced focus on its core DTH
operations so that it can expand customer base, raise revenue
contributions through product innovations and provisions of various
value added services. To achieve the same, your Company has transferred
its entire shareholding in ISMSL, which is engaged in the business of
providing services pertaining to subscribers' management, collection
and maintenance of subscribers' information, and call centre
activities, on June 1, 2011. Accordingly, ISMSL ceased to be a
Subsidiary of your Company from the date of transfer.
The Ministry of Corporate Affairs, Government of India has allowed
general exemption to Companies from complying with Section 212 (8) of
the Companies Act, 1956, provided such companies publish the audited
consolidated financial statements in the Annual Report. Your Board has
decided to avail the said general exemption from applicability of
provisions of Section 212 of the Companies Act, 1956, and accordingly,
the Annual Accounts of the Subsidiary of the Company viz. ISMSL for the
financial year ended March 31, 2011 are not being attached with the
Annual Report of the Company and the specified financial highlights of
the said Subsidiary Company are disclosed in the Annual Report, as part
of the Consolidated Financial Statements. The audited Annual Accounts
and related information of the subsidiary will be made available, upon
request and also be open for inspection at the Registered Office, by
any Shareholder.
As required by the Accounting Standard AS Ã 21 issued by the Institute
of Chartered Accountants of India, the financial statement of the
Company reflecting the Consolidation of the Accounts of its
subsidiaries to the extent of equity holding of the Company in these
Companies are included in this Annual Report.
SHARE CAPITAL
During the year, your Company issued and allotted 557,060 fully paid
equity shares upon exercise of Stock Options by the employees under the
'ESOP Scheme à 2007' of the Company.
During the Financial Year 2008-09, your Company had come up with Rights
Issue of 518,149,592 equity shares of Rs. 1 each, issued at Rs. 22 per
share (including premium of Rs. 21 per share), payable in three
installments. Upon receipt of valid first and second call money, during
the year under review, the Company converted 16,151 equity shares from
0.50 paid up to 0.75 paid up and 1,376,629 equity shares from 0.75 paid
up to fully paid up.
Pursuant to the issue of further shares under ESOP and subsequent to
conversion of partly paid shares, the paid up capital of your Company
during the year has increased from Rs. 1,062,070,492 comprising of
1,059,006,947 equity shares of Rs. 1 each, fully paid up, 3,429,124
equity shares of Rs. 1 each - paid up Rs. 0.75 per share and 983,404 equity
shares of Rs. 1 each - paid up Rs. 0.50 per share to Rs. 1,062,975,747
comprising of 1,060,940,636 equity shares of Rs. 1 each, fully paid up,
2,068,646 equity shares of Rs. 1 each - paid up Rs. 0.75 per share and
967,253 equity shares of Rs. 1 each - paid up Rs. 0.50 per share. As on
March 31, 2011 the Company has not received the valid Second call on
2,068,646 partly paid shares and first and second call on 967,253
partly paid shares.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs. 113,992.91 Lakhs, the Company
has received a sum of Rs. 113,672.66 Lakhs towards the Share application
and call money as at March 31, 2011, the details of which has been
provided under the preceding heading.
The utilization of Rights Issue proceeds are placed before the Audit
Committee on quarterly basis. Further, the Company also provides the
details of the utilization of Rights Issue proceeds to the Monitoring
Agency on half yearly basis and furnishes the Monitoring Report to
Stock Exchanges.
The Board at its meeting held on May 28, 2009 approved to make change
in the manner of usage of rights issue proceeds as hereunder:
Particulars Amount
(Rs. in Lacs)
Acquisition of Consumer Premises 26,000.00
Equipment (CPE) including Leased CPE
Repayment of loans 28,421.44
Repayment of loans received after 24,300.00
launch of the Rights Issue
General Corporate Purpose/ 34,696.46
Operational Expenses
Issue Expenses 575.01
Total 113,992.91
The manner of utilization of rights issue proceeds as on March 31,
2011, is as under:
Particulars Amount
(Rs. in Lacs)
Repayment of loans 28,421.44
Repayment of loans received after 24,300.00
launch of the Rights Issue
General Corporate Purpose/ 14,405.94
Operational Expenses
Acquisition of Consumer Premises 26,000.00
Equipment (CPE) including leased CPE
Issue Expenses 544.52
Total 93,671.90
The Fourth and Fifth Monitoring Report for half year periods, July 2010
- December 2010 and January 2011 Ã June 2011 respectively, containing
deviation from the original proposed expenditure plan and in accordance
with the revised plan was recorded by the Audit Committee and the Board
at their respective meetings and necessary compliance in this regard
has been carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (GDR) Offer of the Company for 117,035
GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000
fully paid equity shares of the Company was fully subscribed by Apollo
India Private Equity II (Mauritius) Limited.
The manner of utilisation of GDR proceeds as on March 31, 2011, is as
under:
Particulars Amount
(Rs. in Lacs)
Assets purchases including CPE 7,353.31
Issue Expenses 344.63
Advance to subsidiary 56.14
Repayment of Bank Loans 755.22
Operational Expenses 20,678.70
Less: Interest Earned -423.37
Margin Money 500.00
Bank Balances 17,319.85
Total 46,584.48
EMPLOYEE STOCK OPTION SCHEME
In pursuance of the Securities and Exchange Board of India (Employees'
Stock Option Scheme and Employees' Stock Purchase Scheme) Guidelines,
1999, your Board had authorized the Remuneration Committee to
administer and implement the Company's Employees' Stock Option Scheme
(ESOP Ã 2007) including deciding and reviewing the eligibility criteria
for grant and/or issuance of stock options to the eligible employees/
directors under the Scheme. Further, in view of the growing frequency
of allotment of equity shares pursuant to exercise of stock options by
eligible employees/ directors, your Board constituted an ESOP Allotment
Committee to consider, review and allot equity shares to the eligible
Employees/Directors exercising the stock options under the Employees'
Stock Option Scheme (ESOP Ã 2007) of the Company.
During the period under review, your Company allotted 5,57,060 fully
paid equity shares upon exercise of the stock options by eligible
employee under th ESOP Ã 2007. During the year, your Board approved the
grant of 10,38,300 shares to the eligible employees under ESOP Ã 2007.
Applicable disclosures relating to Employee Stock Options as at March
31, 2011, pursuant to Clause 12 (Disclosure in the Directors' Report)
of the SEBI (Employees' Stock Option Scheme and Employees'
Stock Purchase Scheme) Guidelines, 1999 are given as 'Annexure A' to
this Report.
A certificate, as prescribed under Clause 14 of the said Guidelines,
obtained from Statutory Auditors shall be available for inspection at
the Annual General Meeting and a copy of the same shall be available
for inspection at the registered office of the Company.
GROUP
Based on the intimation received by the Company from the Promoters, the
names of Promoters and entities comprising 'group' for the purpose of
Clause 3(1)(e) of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, are disclosed in the Annual Report as
'Annexure B'.
PUBLIC DEPOSITS
During the year, your Company has not accepted any Deposits under
Section 58A and Section 58AA of the Act, read with Companies
(Acceptance of Deposits) Rules, 1975.
CORPORATE GOVERNANCE
It is your Company's constant endeavor to adopt best governance
practices as laid down in Clause 49 of the Listing Agreement with the
Stock Exchanges. In pursuance of this objective, your Board has
approved and implemented a Corporate Governance Manual which serves as
a guide to day to day business and strategic decision making in the
Company.
A comprehensive report on Corporate Governance pursuant to the
requirement of Clause 49 of the Listing Agreement with the Stock
Exchanges together with Auditors' Certificate confirming compliance is
attached to this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India is separately attached hereto and forms a part of
this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is the deliberate inclusion of
public interest into corporate decision- making. CSR is at the core of
your Company's vision and mission which is achieved by focusing on the
interest of the employees, customers and shareholders of the Company
and the society at large.
Your Company as part of the Essel Group of Companies, has at a unified
and centralized level, put in place Corporate Social Responsibility
policy. The CSR Policy is based on a belief that a Business cannot
succeed in a society that fails and therefore it is imperative for
business houses, to invest in the future by taking part in social
building activities.
DIRECTORS
Mr. Sanjay H. Patel was appointed as an Alternate Director to Mr.
Mintoo Bhandari effective October 27, 2010 pursuant to Section 313 of
the Companies Act, 1956. Mr. Mintoo Bhandari held his office as an
Additional Nominee Director up to the date of previous Annual General
Meeting i.e. December 16, 2010 and being eligible was appointed as a
Nominee Director from the same date. Pursuant to provisions of Section
313 of the Companies Act, 1956, Mr. Patel automatically ceased to hold
office as an Alternate Director with effect from the date of Annual
General Meeting at which the term of Additional Director expired.
Thereafter Mr. Sanjay H Patel was appointed as Alternate Director to
Mr. Bhandari by the Board at its meeting held on March 25, 2011.
In accordance with the provisions of Companies Act, 1956, Mr. Ashok
Mathai Kurien and Mr. Bhagwan Dass Narang, Directors, retire by
rotation at the ensuing Annual General Meeting of the Company and being
eligible, have offered themselves for re-appointment. Your Board has
recommended their re-appointment in the overall interest of the
Company.
Brief profile of the Directors proposed to be re-appointed has been
included in the Report on the Corporate Governance forming part of the
Annual Report.
AUDITOR
The Statutory Auditors M/s. B S R & Co., Chartered Accountants,
Gurgaon, having Firm Registration No 101248W, hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment.
Your Company has received confirmation from the Auditors to the effect
that their reappointment, if made would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for re-appointment within the meaning of Section 226 of
the said Act.
AUDITORS' REPORT
The report of the Statutory Auditor of the Company contains
qualification statements.
The response of the Board to the qualification of the Statutory Auditor
mentioned at serial number 4 (f) of the Audit Report is as follows Ã
The Lease rental is a financial transaction based on cost of fund,
taxation and cash flow consideration. Depreciation is not directly
linked with the lease period but it is more to do with life of the set
top box, repair, maintenance and other service related issues. However
the Company will streamline the process of charging depreciation on
Consumer Premises Equipment
The response of the Board to the qualification of the Statutory Auditor
mentioned at serial number 4 (g) of the Audit Report is as follows à In
order to simplify the group structure and have focused attention, the
Board of Directors approved the Scheme of Amalgamation and Arrangement,
wherein the non-DTH related business of the Company is transferred to
ISMSL followed by the merger of ASSL with ISMSL. The appointed date of
the Scheme is March 31, 2010. The Scheme has been approved by the
Hon'ble High Court of Judicature at Delhi vide its order dated March 3,
2011 and corrigendum dated March 31, 2011.
As per the Scheme, the Company reduced the book value of the assets and
liabilities alongwith relatable provisions, demerged pursuant to the
Scheme, with a corresponding debit/credit to the Business Restructuring
Reserve account. The balance in the Business Restructuring Reserve
account has been adjusted against the balance in General Reserve
account of the Company in terms of the Scheme.
The response of the Board to the qualification of the Statutory Auditor
mentioned at serial number 4 (h) of the Audit Report is as follows Ã
The Company has received a notice from Income Tax Department about the
short deduction of TDS on account of payment made to various content
providers. We are firmly of the opinion, on the basis of various
judicial pronouncements and legal advice received, that we are not
required to provide for such short deduction.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Your Company is in the business of providing Direct to Home service.
Since the said activity does not involve any manufacturing activity,
most of the Information required to be provided under Section 217(1)(e)
of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988, are
not applicable.
However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy
consumption and every endeavor is made to ensure optimal use of energy,
avoid wastages and conserve energy as far as possible.
Technology Absorption:
In its endeavor to deliver the best to its viewers and business
partners, your Company is constantly active in harnessing and tapping
the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are
given in Note no.7, 8 and 9 to the notes to the Accounts forming part
of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Your Company aims at adopting the best practices for achieving
competitive advantage through people and 'building profits by putting
people first'. It endeavors to devise strategies to attract the best
talent and to ensure their retention by building trust and instilling
loyalty in them. Your Board believes that to build a sound and growing
business in a difficult and complex industry, employees are vital to
the Company. Pay revisions and other benefits are designed in such a
way to compensate for good performance of the employees of your
Company. In addition to the basic salary which is based on the
industry standards, your Company provides a number of benefits to its
employees such as employee stock options, awards and training etc.
The talent base of your Company has steadily increased and your Company
has created a favourable work environment which encourages innovation
and meritocracy. The Company has also set up a scalable recruitment and
human resource management process which enables us to attract and
retain high caliber employees.
PARTICULARS OF EMPLOYEES
Your Board wishes to express their appreciation to all the employees of
the Company for their outstanding contribution to the Operations of the
Company during the year under review. The information required under
Section 217(2A) of the Companies Act, 1956 ('Act') read with the
Companies (Particulars of Employees) Rules, 1975 is required to be set
out in an annexure to this report. However, in terms of Section
219(1)(b) of the Act, the Report and Accounts are being sent to the
shareholders excluding the aforesaid annexure. Any shareholder
interested in obtaining copy of the same may write to the Company
Secretary at the Corporate Office. None of the employees, except Mr.
Jawahar Lal Goel, listed in the said annexure are related to any
Director of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, in relation to the Annual Financial Statements for the
Financial Year 2010-11, your Directors confirm the following:
a) The Financial Statements have been prepared on a 'going concern'
basis and in such preparation the applicable accounting standards had
been followed with proper explanation relating to material departures;
b) Accounting policies selected were applied consistently and the
judgments and estimates related to the financial statements have been
made on a prudent and reasonable basis, so as to give a true and fair
view of the state of affairs of the Company as at March 31, 2011, and
of the profit or loss of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities; and
d) Adequate internal systems and controls are in place to ensure
compliance of laws applicable to the Company.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
dedication and commitment of employees at all levels that have
contributed to the success of your Company. Your Directors thank and
express their gratitude for the continued support and co-operation
received from the Central and State Governments, the Ministry of
Information and Broadcasting (MIB), the Department of Telecommunication
and Foreign Investment Promotion Board (FIPB), Ministry of Finance, the
Telecom Regulatory Authority of India (TRAI), the Stock Exchanges - and
other stakeholders including viewers, vendors, bankers, investors,
service providers as well as other regulatory and governmental
authorities.
For and on behalf of the Board
Jawahar Lal Goel B D Narang
Managing Director Director
Place : Noida
Date : July 20, 2011
Mar 31, 2010
The Directors are delighted to present the Twenty Second Annual Report
together with the Audited Statement of Accounts of the Company for the
financial year ended March 31, 2010.
FINANCIAL RESULTS
The Financial Performance of your Company for the year ended March 31,
2010 is summarized below:
(Rs./Thousand)
Particulars Year ended Year ended
march 31, 2010 march 31, 2009
Sales & Services 10,847,945 7,376,945
Other Income 53,128 12,721
Total income 10,901,073 7,389,666
Total Expenses 13,522,579 12,145,168
Profit/(Loss) before Tax (2,621,506) (4,755,502)
Provision for Taxation (net) (181) 7,272
Profit/(Loss) after Tax (2,621,325) (4,762,774)
Profit/(Loss) for the Year (2,621,325) (4,762,774)
Add: Balance brought (11,416,191) (6,650,861)
forward
Amount available for (14,037,516) (11,416,191)
appropriations
Appropriations :
Dividend Nil Nil
Tax on Dividend Nil Nil
General Reserve Nil Nil
Balance Carried Forward (14,037,516) (11,416,191)
BUSINESS OVERVIEW
The year gone by witnessed stiff competition and aggressive marketing
initiatives from 6 players in the market. Despite that dishtv continues
to be sitting strong in the No 1 position. This has been possible
because of the brand-s foresight in maintaining a leadership stance
through a series of initiatives involving technology, customer service
and acquisition drive. Our main focus has been on the expansion of
sales and distribution outlets to Tier II and Tier III cities for
better penetration and reach of our products, this called for the
service network to be widened beyond the boundaries of top cities. The
service franchisee / service outlets and service partners were
strengthened, not only in numbers but also in terms of infrastructure
to be at the customers beck and call. The DTH category grew by more
than 20% on year-on-year basis and the numbers came from across the
country. To facilitate recharge payments various new modes of payment
were introduced, the latest being the ÃHome Pick- service where the
subscriber just needs to send a sms and dishtv collects the recharge
payment from the subscribers doorstep. The response to this service has
been quite encouraging and our continuous effort would be to simplify
subscribers- ÃDish TV- experience by delighting them through new
methods of payment.
The Company launched a major repositioning campaign to move into the
emotional space. The rationale of dishtv being a reason for the family
to bond together was beautifully captured in the new positioning "Ghar
Aayi Zindagi". The campaign was aimed at making the existing
subscribers the goodwill ambassadors. The new energized space of the
brand was complemented with a new and progressive logo.
Various recharge schemes incentivising the long term payment by the
subscribers was introduced and the result was encouraging. This has
given rise to decrease in churn and intermediate deactivation. Some of
the successful schemes were ZR - ZR, Pay Term Offer and Extra Khushi
Offer.
The content offering has been designed keeping the customers needs in
mind. They are made flexible for customers to pick their own channels
as per their likings and choices. This has provided a competitive edge
to dishtv in terms of price, number of channels and composition of
packaging tiers which is a huge advantage to subscribers spread all
across the country. Some game changing acquisition offers were
launched which included ÃDiwali Bonanza- and ÃBox Free offer- which
resulted in high customer acquisition because it stood out, leading to
greater acceptability of the product in the market.
During the year under review, dishtv added another feather in its cap
when it was presented with the "Special Award" for its Interactive
Service awarded at the AFDESI International iTV Awards ceremony in
Cannes, France held during MIPCOM. Four of our interactive services
(ICICI Active, Monster Jobs Active, Shaadi Active &Travel Active) were
nominated for the International iTV Award. Dishtv was the only Indian
Company to win this special award for the first time for its coveted
role in the interactive television industry. This award recognizes our
technological prowess and elevates the value of our services to stand
out as a differentiated brand. The brand power of dishtv kept on
increasing and was awarded the Power Brand status.
With the entry of ÃHi-definition-, Dishtv stood ahead of the curve and
launched DISH TRU HD. The launch of Dish TRU HD was done in partnership
with Zee (leader in GEC) for the HD content of Zee Cinema and ESPN for
the FIFA World Cup 2010 in HD format which was the first time Indian
subscribers were privy to. Customers watched and enjoyed a wide array
of genres with crystal clear picture quality and stereophonic sound.
This heralded a new paradigm in the DTH industry and dishtv
successfully managed to provide high quality entertainment to it-s
subscribers.
During the fourth quarter dishtv achieved EBIDTA positive for the first
time and the same is being continued thereafter. The revenue grew by
more than 40% in line with the expectation.
However, the desired impact of the increased revenue did not reflect in
ARPU due to higher number of activations and offering of free /
subsidized content for the initial period of 3-6 months.
The Focus of the Company continued towards reduction of operational
expenses, establishment of robust service network, strengthening brand
equity, revamping existing packages, creating unique packages,
maintaining market leadership, strengthen it-s financials and providing
consumer delight.
Dish TV was granted the Head-end-in-the-Sky (HITS) License. The
commercial launch of HITS services was done in the early part of 2009.
However, in view of the prevailing regulatory position, the HITS
License has been surrendered and the HITS operations have been
discontinued.
SUBSIDIARY OPERATIONS
Your Company has three subsidiaries viz. Integrated Subscriber
Management Services Limited (ISMSL), Agrani Satellite Services Limited
(ASSL) and Agrani Convergence Limited (ACL).
Your Company has been granted exemption by the Ministry of Corporate
Affairs, Government of India, vide its letter No. 47/116/2010-CL-III
dated March 18, 2010, from the requirement of attaching Annual Reports
of the Subsidiary Companies to the Annual Report of the Company for the
financial year ended March 31, 2010. Accordingly, as provided in the
said approval, the annual accounts of the subsidiaries of the Company
for year ended March 31, 2010 are not being attached with the Annual
Report of the Company and certain financial highlights of these
subsidiaries are disclosed in the Annual Report. Statement pursuant to
Section 212 of the Companies Act 1956 relating to the subsidiaries of
the Company is attached to this report. The annual accounts of the
subsidiary companies and related detailed information will be available
for inspection by any Member of the Company or that of the subsidiary
companies. The Consolidated Financial Statements presented by the
Company include financial results of its subsidiary companies.
As required by the Accounting Standard AS - 21 issued by the Institute
of Chartered Accountants of India, the financial statement of the
Company reflecting the Consolidation of the Accounts of its
subsidiaries to the extent of equity holding of the Company in these
Companies are included in this Annual Report.
COPORATE RESTRUCTURING
In terms of the Composite Scheme of Amalgamation and Arrangement
between the Company, Agrani Satellite Services Limited (ASSL) (wholly
owned subsidiary of the Company), Integrated Subscriber Management
Services Limited (ISMSL) (wholly owned subsidiary of the Company), it
is proposed to demerge the Non DTH business of the Company into ISMSL,
followed by merger of ASSL with ISMSL with effect from March 31, 2010
being the appointed date. The said scheme was approved by your
Directors in order to simplify the group structure and improve cost
efficiency.
The Company has filed an application with the Hon-ble High Court of
Delhi. The application was duly admitted by the Hon-ble High Court of
Delhi vide its order dated October 08, 2010. The final approval of the
scheme is awaited and hence the Scheme is not been made effective.
In view of the above stated impending Scheme of Amalgamation and
Arrangement, your Company had applied for and obtained the approval
from the Ministry of Corporate Affairs, Office of the Registrar of
Companies vide letter dated July 30, 2010 for holding the Annual
General Meeting of the Company for the Financial Year 2009 - 10 by
December 31, 2010.
SHARE CAPITAL
During the year, your Company issued and allotted 12,080 fully paid
equity shares upon exercise of Stock Options under ESOP Scheme - 2007
of the Company on December 10, 2009.
During the year, your Company issued and allotted 117,035,000 fully
paid equity shares of Re.1 each underlying Global Depository Receipts
("GDRs") on November 30, 2009.
Your Company had come up with Rights Issue of 51,81,49,592 equity
shares of Re. 1/- each, issued at Rs. 22/- per share (including premium
of Rs. 21/- per share), payable in three installments i.e. Rs. 6/-
(including Re. 0.50/- towards capital) on application, Rs. 8/-
(including Re. 0.25/- towards capital) on first call and balance Rs.
8/- (including Re. 0.25/- towards capital) on second call. The issue
opened on December 12, 2008 and closed on January 9, 2009. The partly
paid shares were allotted on January 19, 2009. The Company made the
first call on June 18, 2009 and Second call on January 22, 2010. Upon
receipt of valid first and second call money, the respective shares are
converted from Rs.0.50 paid up to Rs.0.75 paid up and from Rs. 0.75
paid up to Rs. 1 paid up respectively.
Pursuant to the issue of further shares under ESOP and GDR offering and
subsequent to conversion of partly paid shares, the paid up capital of
your Company during the year has increased from Rs. 687,297,599
comprising of 428,222,803 equity shares of Re. 1 each, fully paid up
and 518,149,592 equity shares of Re. 1 each, paid up Re.0.50 per share
to Rs. 1062,070,492 comprising of 1059,006,947 equity shares of Re. 1
each, fully paid up, 3,429,124 equity shares of Re. 1 each, paid up
Re.0.75 per share and 983,404 equity shares of Re. 1 each, paid up
Re.0.50 per share.
The fully paid up equity shares issued pursuant to ESOP against
underlying GDRs and upon conversion from partly to fully paid up equity
shares pursuant to Rights issue, are listed at the National Stock
Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited
(BSE).
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs. 113,992.91 Lakhs, the Company
has received a sum of Rs. 113,561.23 Lakhs towards the Share
application and call money from the aforesaid Issue of Shares on Rights
basis.
As per the disclosure requirements, the utilization of Rights Issue
proceeds are placed before the Audit Committee on quarterly basis.
Further, the Company also provides the details of the utilization of
Rights Issue proceeds to the Monitoring Agency and inform Stock
Exchanges, in case of any deviation from the stated purpose.
The manner of utilization of Rights Issue proceeds as per the letter of
offer dated November 26, 2008 was as follows:
Particular Amount
(Rs. in Lacs)
Acquisition of consumer premises 79,012.00
equipments
Repayment of loans 30,000.00
General corporate purposes 4,109.91
Issue expenses 871.00
Total 113,992.91
In view of the DTH market becoming very competitive and the business
dynamics being required to be revisited and made market friendly to
achieve the desired level of market share, improved service quality and
customer loyalty, the Board at its meeting held on May 28, 2009
approved to make change in the manner of usage of right issue proceeds
as hereunder:
Particulars Amount
(Rs. in Lacs)
Acquisition of Consumer Premises Equipment 26,000.00
(CPE) including Leased CPE
Repayment of loans 28,421.44
Repayment of loans received after launch of 24,300.00
the Rights Issue
General Corporate Purpose/Operational 34,696.46
Expenses
Issue Expenses 575.01
Total 113,992.91
On Mar 25, 2010 the Board took the note of utilization of funds upto
December 31, 2009 raised through Rights issue as under:
Particular Amount
(Rs. in Lacs)
Acquisition of Consumer Premises Equipment 15,592.50
(CPE) including leased CPE
Repayment of Loans 28,421.44
Repayment of Loans received after launch of 24,300.00
Rights Issue
General Corporate Purpose/Operational 3,592.18
Expenses
Issue Expenses 544.52
Total 72,450.64
The manner of utilisation of rights issue proceeds as on March 31,
2010, is as under:
Particulars Amount
(Rs. in Lacs)
Repayment of loans 28,421.44
Repayment of loans received after launch of 24,300.00
the Rights Issue
General Corporate Purpose/Operation 8,798.84
Expenses
Acquisition of Consumer Premises Equipment 18,396.44
(CPE) including leased CPE
Issue Expenses 544.52
Total 80,461.24
The Monitoring Report for periods July - December 2009 and January -
June 2010, containing the deviation from the original proposed
expenditure plan and in accordance with the revised plan was recorded
by the Audit Committee and the Board at their meetings and necessary
compliance in this regard have been carried out.
DELiSTING OF EQUITY SHARES FROM CALCUTTA STOCK EXChANGE
The Equity shares of your Company are currently listed on the Bombay
Stock Exchange Limited (BSE) and National Stock Exchange of India
Limited (NSE). During the year under review, the equity shares of your
Company were also listed on the Calcutta Stock Exchange Association
Limited (CSE). Since the trading volume of Company-s share on CSE was
insignificant and the Company-s securities are available for trading at
BSE & NSE, who have extensive network of nation wide trading terminals,
your Board had proposed for delisting of Company-s Equity Shares from
the Calcutta Stock Exchange Association Limited. The delisting of
equity shares was also approved by the members at the previous Annual
General Meeting held on August 28, 2009.
Upon the approval of the Board and the members of the Company for
delisting of equity shares of the Company from CSE, an application
towards the same was made to CSE and the approval for delisting of
equity shares of the Company from CSE was obtained from CSE with effect
from November 14, 2009 vide CSE letter dated December 7, 2009.
GLOBAL DEPOSITORY RECEIPT
Pursuant to the requisite approvals and in accordance with applicable
regulations including the Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipts Mechanism) Scheme, 1993,
as amended, the Global Depository Receipt (GDR) Offer of the Company
for 117,035 GDRs opened for subscription on November 23, 2009 at a
price of US $ 854.50 per GDR, each GDR representing 1000 fully paid
equity shares of the Company.
The pricing of the GDR as per the pricing formula prescribed under
Clause 5 (4) (D) of the Foreign Currency Convertible Bonds and Ordinary
Shares (Through Depository Mechanism) Scheme, 1993, as amended, was Rs.
39.80 per equity share and the relevant date for this purpose was
November 23, 2009.
Upon opening, the GDR issue was fully subscribed by Apollo India
Private Equity II (Mauritius) Limited and the Company received USD
100,006,407.50 towards the subscription money. Upon receipt of the
subscription money, the Issue Committee of the Board, at its meeting
held on November 30, 2009, issued and allotted 117,035,000 fully paid
equity shares @ Rs. 39.80 per share to Deutsche Bank Trust Company
Americas (being the depository) to be held by ICICI Bank Limited as the
domestic custodian to the order of Deutsche Bank Trust Company
Americas, underlying the Global Depository Receipt issued to Apollo
India Private Equity II (Mauritius) Limited. The GDR-s are listed at
the Luxembourg Stock Exchange.
The manner of utilisation of GDR proceeds as on March 31, 2010, is as
under:
Particulars Amount in Rs.
Acquisition of Fixed Assets includes 365,388,429
Customer Premises Equipments
GDR Issue Expenses 34,462,652
Advance Against Share Application Money 5,613,736
given to Subsidiaries
Repayment of Bank Loan 75,522,000
Operational Expenses including interest
payments, Bank Charges and Exchange 1,692,321,248
Fluctuations
Total (A) 2,173,308,065
Unutilized amount lying with:
Increase in FDR and Margin Money 70,017,000
Particularsamount in Rs.
Investment in Mutual Fund 250,000,000
Balance with Non-Scheduled Banks* 2,165,121,835
Total unutilized balance as on 31 march 2,485,138,835
2010 (B)
Total (A+B) 4,658,446,900
*After adjustment for unrealized exchange loss of Rs. 69,369,904
EMPLOYEE STOCK OPTION SCHEME
During the year under review, your Company allotted 12,080 equity
shares upon exercise of the stock options by eligible employee under
the Employee Stock Option Scheme (ESOP - 2007). Applicable disclosures
relating to Employees Stock Options as at March 31, 2010, pursuant to
Clause 12 (Disclosure in the Directors- Report) of the SEBI (Employees-
Stock Option Scheme and Employees- Stock Purchase Scheme) Guidelines,
1999 are given are Annexure A to this Report.
A certificate, as prescribed under Clause 14 of the said Guidelines,
obtained from Statutory Auditors with respect to implementation of the
Company-s Employee Stock Option Scheme shall be available for
inspection at the Annual General Meeting and a copy of the same shall
be available for inspection at the registered office of the Company.
GROUP
Pursuant to the communication received by the Company from the
Promoters, the names of Promoters and entities comprising Ãgroup- for
the purpose of Clause 3(1)(e) of the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997, are disclosed in the Annual
Report as Annexure B-.
PUBLIC DEPOSITS
During the year, your Company has not accepted any Deposits under
Section 58A and Section 58AA of the Act, read with Companies
(Acceptance of Deposits) Rules, 1975.
CORPORATE GOVERNANCE
Your Company is committed towards achieving the highest standard of
Corporate Governance. The Directors and the Management of your Company
ensure compliance of the Corporate Governance requirements set out
under the Listing Agreement with the Stock Exchanges.
A detailed report on Corporate Governance pursuant to the requirement
of Clause 49 of the Listing Agreement with the Stock Exchanges together
with Auditors- Certificate confirming compliance is attached to this
Annual Report as also a Management Discussion and Analysis statement.
CORPORATE SOCiAL RESPONSIBILITY
Your Company as part of the Essel Group of Companies, has at a unified
and centralized level, put in place Corporate Social Responsibility
policy. The CSR Policy is based on a belief that a Business cannot
succeed in a society that fails and therefore it is imperative for
business houses, to invest in the future by taking part in social
building activities.
DIRECTORS
Your Company had appointed Mr. Lakshmi Chand as an Additional Director
in the category of Independent Director with effect from May 8, 2010.
Further, in terms of the Articles of Association of the Company, the
Board at its meeting held on October 26, 2010, has appointed Mr. Mintoo
Bhandari as a Nominee Director of Apollo India Private Equity II
(Mauritius) Limited with effect from October 27, 2010. Mr. Lakshmi
Chand and Mr. Mintoo Bhandari shall vacate the office of Director at
the ensuing Annual General Meeting and have filed requisite consent to
act as a Director of the Company. Notice has been received from Members
of the Company under Section 257 of the Companies Act, 1956 for the
appointment of Mr. Lakshmi Chand and Mr. Mintoo Bhandari as Directors
of the Company. Appropriate resolution seeking your approval to the
appointment of Mr. Lakshmi Chand and Mr. Mintoo Bhandari is appearing
in the Notice convening the 22nd Annual General Meeting of the Company.
Mr. Subhash Chandra and Mr. Eric Louis Zinterhofer, Directors, retire
by rotation at the ensuing Annual General Meeting of your Company and
being eligible, have offered themselves for the re-appointment. Your
Board has recommended their re- appointment.
Brief profile of the Director proposed to be appointed / re- appointed
has been include in the Report on the Corporate Governance forming part
of the Annual Report.
AUDITORS
The Statutory Auditors M/s MGB & Co., Chartered Accountants, Delhi,
hold office until the conclusion of the ensuing Annual General Meeting.
M/s MGB & Co. Chartered Accountants, Delhi, has expressed unwillingness
to continue to hold the office of Statutory Auditor after the
conclusion of the ensuing Annual General Meeting. The Directors place
on record deep appreciation for the assistance and guidance extended by
M/s MGB & Co., Chartered Accountants, Delhi, during their tenure as
Statutory Auditors of the Company.
On recommendation of the Audit Committee, the Board at its meeting held
on November 15, 2010 proposed the name of BSR & Co., Chartered
Accountants, Delhi for appointment as the Statutory Auditor of the
Company at the ensuing Annual General Meeting. The Company has received
the confirmation from BSR & Co., Chartered Accountants, Delhi to the
effect that appointment, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956. You are requested to
consider their appointment.
AUDITOR-S REPORT
The report of the Statutory Auditor of the Company contain
qualification statements.
The response of the Management to the qualification of the Statutory
Auditor mentioned at serial number 4 of the Audit Report is as follows
- In order to simplify the group structure and improve cost efficiency;
the board of directors had approved the Scheme of Arrangement, wherein
the non-DTH related business of the Company is transferred to ISMSL
followed by the merger of ASSL with ISMSL. The appointed date of the
scheme is March 31, 2010. The Scheme is pending approval of the High
Court of Judicature at Delhi.
As per the Scheme, the Company will reduce the book value of the assets
and liabilities alongwith relatable provisions, demerged pursuant to
the Scheme, with a corresponding debit / credit to the Business
Restructuring Reserve account. The balance in the Business
Restructuring Reserve account will than be adjusted against the balance
in General Reserve account of the Company in terms of the approval of
the shareholders and creditors and the Scheme of Amalgamation and
Arrangement being sanctioned by the High Court of Judicature at Delhi.
The response of the Management to the qualification of the Statutory
Auditor mentioned at serial number (xvi) of Annexure to the Audit
Report is as follows - The Company is funding losses through a mix of
debt and equity funds. We need to continuously acquire subscribers in
order to remain competitive and ahead of others. This amount was used
for operational losses as the consumer premises equipment were
purchased from equity fund and debt from other bank
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
Information required to be provided under section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 in relation to
Conservation of Energy and Technology Absorption are currently not
applicable to the Company and therefore particulars in connection
therewith are as under:
- Conservation of Energy- Nil
- Technology Absorption- Nil
Particulars of foreign currency earnings and outgo during the year are
given in Note 39.3 to the notes to the Accounts forming part of the
Annual Report.
PARTICULARS OF EMPLOYEES
The Board of Directors wishes to express their appreciation to all the
employees of the Company for their outstanding contribution to the
Operations of the Company during the year under review. The information
required under Section 217(2A) of the Companies Act, 1956 (Act-) read
with the Companies (Particulars of Employees) Rules, 1975 is required
to be set out in an annexure to this report. However, in terms of
Section 219(1)(b) of the Act, the Report and Accounts are being sent to
the shareholders excluding the aforesaid annexure. Any shareholder
interested in obtaining copy of the same may write to the Company
Secretary at the Corporate Office. None of the employees, except Mr.
Jawahar Lal Goel, listed in the said annexure are related to any
Director of the Company.
CREDIT RATING
Your Company has obtained credit rating of AA (SO) for its long term
Banking facilities on the basis of Company-s performance from Credit
Analysis and Research Ltd (CARE). CARE rating, AA (SO)- indicates
adequate safety for timely servicing of debt obligations.
HUMAN RESOURCE MANAGEMENT
Your Board believes that to build a sound and growing business in a
difficult and complex industry, Employees are vital to the Company. The
talent base of your Company has steadily increased and your Company has
created a favourable work environment which encourages innovation and
meritocracy. The Company has also set up a scalable recruitment and
human resource management process which enables us to attract and
retain high caliber employees.
RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 217(2AA) of the Companies Act,
1956, in relation to the Annual Statement of Accounts for financial
year 2009-2010, your Directors state and confirm that:
a) the Accounts had been prepared on a Ãgoing concern- basis and in
such preparation the applicable accounting standards had been followed
with proper explanation relating to material departures;
b) your Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year, and of the profit or
loss of the Company for that year;
c) your Directors had taken proper and sufficient care for maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 as amended, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
d) your Company has adequate internal systems and controls in place to
ensure compliance of laws applicable to the Company
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation of the
dedication and commitment of employees at all levels that have
contributed to the success of your Company. Your Directors thank and
express their gratitude for the continued support and co-operation
received from the Central and State Governments, the Ministry of
Information and Broadcasting (MIB), the Department of Telecommunication
and Foreign Investment Promotion Board (FIPB), Ministry of Finance, the
Telecom Regulatory Authority of India (TRAI), the Stock Exchanges - and
other stakeholders including viewers, vendors, bankers, investors,
service providers as well as other regulatory and governmental
authorities.
For and on behalf of the Board
Jawahar Lal Goel B D narang
Managing Director Director
Place : Noida
Date : November 15, 2010
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