Mar 31, 2022
The Board of Directors are pleased to present the Company''s 62nd Annual Report and the Company''s audited financial statement for the financial year ended March 31, 2022.
1. FINANCIAL RESULTS
The Company''s financial performance (Standalone and Consolidated) for the year ended March 31, 2022 is summarized below: -
('' in crores) |
||||
STANDALONE |
CONSOLIDATED |
|||
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
Revenue from Operations |
621.94 |
615.56 |
1793.02 |
1731.77 |
Other Income |
50.81 |
134.30 |
77.42 |
142.45 |
Profit/(Loss) before Tax |
70.04 |
143.60 |
156.13 |
278.61 |
Less: Current Tax |
- |
- |
0.01 |
0.81 |
Deferred Tax |
22.88 |
32.45 |
25.77 |
24.55 |
Profit/(Loss) for the year |
47.16 |
111.15 |
.........................130.35..... |
253.25 |
Add: Other Comprehensive Income ("OCI") |
(0.09) |
0.23 |
.............................(1.45)..... |
0.62 |
Total Comprehensive Income for the year |
47.07 |
111.38 |
128.90 |
253.87 |
Add: Opening Balance in Retained Earnings and OCI (Adjusted) |
(649.71) |
(761.09) |
(1081.98) |
(1335.86) |
Less: Appropriation |
- |
- |
- |
- |
- General Reserve |
- |
- |
- |
- |
Closing Balance of Retained Earnings and OCI |
(602.63) |
(649.71) |
...................(953.30)..... |
(1081.98) |
2. TRANSFER TO RESERVES
The Board of Directors of the Company have not transferred any amount to the Reserves for the year under review.
3. RESULTS OF OPERATIONS AND STATE OF COMPANYâS AFFAIRS
During the year under review, the total revenue from operations was '' 621.94 crores on standalone basis and '' 1,793.02 crores on consolidated basis as compared to the last year''s revenue of '' 615.56 crores on standalone basis and '' 1,731.77 crores on consolidated basis respectively. The post-tax profit of your Company was '' 47.16 crores on standalone basis and '' 130.35 crores on consolidated basis as compared to the last year''s post-tax profit of '' 111.15 crores on standalone basis and '' 253.25 crores on consolidated basis respectively.
4. DETAILS OF MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR TILL THE DATE OF THIS REPORT
No Material Changes have taken place from the end of the financial year till the date of this report.
5. DIVIDEND
The Board of Directors of the Company have not recommended any dividend on Equity Shares for the year under review. The Dividend Distribution Policy of the Company is put on the Company''s website and can be accessed at https://www.hathwav.com/assets/pdf/ Policies/Dividend%20Distribution%20Policv.pdf.
6. BUSINESS OPERATIONS/PERFORMANCE OF THE COMPANY AND ITS MAJOR SUBSIDIARIES
The developments in business operations/performance of the Company and its major subsidiaries consolidated with the Company are as below:
A. Broadband Business
India has around 24 Mn wireline broadband subscribers as of December 31, 2021.
Subscribers increasingly prefer wireline broadband as it allows online media consumption and seamless accessibility of data to multiple devices while at home. Due to the increasing trend of COVID-led work from home ("WFH"), the broadband industry
saw a huge increase in demand in many tier 2 and 3 towns as many professionals shifted base to their home towns. Online education also became a key growth driver for broadband in smaller cities.
The Company''s focus on increasing Fiber to the Home ("FTTH")-led technology edge and improving subscriber experience through enhanced digitisation and automation helped in increasing the FTTH subscriber base by more than 30%. To enable subscribers to handle multiple digital engagements from office video calls to online school and OTT consumption needs, FTTH subscribers enjoying unlimited data, national average of 234 GB/month/ subscriber data usage. This shows the level of engagement of subscribers with the Company network. With high-speed unlimited plans, while Company focused to provide uninterrupted service, it also started giving subscribers double band routers which allowed them to get consistent speed on multiple devices.
Company focused on re-engineering its Subscriber front-ending processes to make them technology-enabled, so as to drive operational efficiencies and strategic thrust on continuous innovation in which lies a strong ambition to empower subscribers. The key innovation Initiatives taken during the year were as below:
⢠First ISP Company to provide VOiceBOT, an Artificial Intelligence ("AI") and Machine Learning ("ML") applications & tools, for handling interactive Voice Services;
⢠Chatbot, enabling quick and hassle-free First Time Resolution ("FTR") to Subscriber queries through Web/ App/ WhatsApp interface;
⢠Smart IVR system at out call centres, which further strengthened FTR;
⢠DIY ("Do It Yourself") videos, to improve awareness and helping Subscriber in speedy resolution of their complaints.
During the year under review, the Broadband business revenue stood at '' 621.94 crores and the subscribers stood at 1.11 Mn (Previous Years'' Broadband business revenue stood at '' 615.56 crores and subscribers stood at 1.07 Mn).
Hathway Digital Limited ("Hathway Digital") - its wholly owned subsidiary provides Cable Television Services on Pan India basis. Implementation of New Tariff Order ("NTO") in March 2019, helped customers the freedom to watch channels of their choice with best-in-class technology.
To strengthen our systems and technical capabilities
to ensure uninterrupted service to esteemed
customers, several new initiatives were undertaken
during the year:
⢠Next generation HEVC HD box and OTT hybrid box were launched during the year to give Cable Television Customers enhanced viewing experience;
⢠Introduced digital prepaid offering for
transactional convenience of Customers;
⢠Online renewal facility to empower customers by giving them the freedom to renew their packages at the click of a button through MyJio App, at their own convenient time and place;
⢠I nstant customer activation to enrich customer experience with no time lag;
⢠Leveraging platforms like WhatsApp for continuous customer engagement;
⢠New digital eCAF process including IVR-based authentication in addition to OTP process;
⢠Piloted initiative of providing OTT apps through already seeded new generation HD boxes, designed to give OTT access to millions of our Cable Television customers without the need to buy an additional OTT device;
⢠Rolled out a new product/GTM strategy to make Hathway infrastructure-ready to seize the benefit of the more conducive prevailing market. We are in the process of rolling out new plans;
⢠Efforts to create an extensive incremental infrastructure, with focus on southern and eastern states, enabling us to expand our market share. The Company connected more than 140 new locations with IP links and added 3,000 kms of fiber network;
⢠Piloted TV Plug, a revolutionary new product to provide highly reliable last-mile Cable Television connectivity from a mobile tower network.
During the year, the Company had repaid its entire credit facilities and accordingly, as there was no need for credit rating, at the request of the Company, India Ratings and Research Private Limited ("Ind-Ra") - (Credit Rating Agency) has withdrawn its rating assigned to the credit facilities of the Company.
8. CONSOLIDATED FINANCIAL STATEMENT
In accordance with the provisions of the Companies Act, 2013 ("the Act") and Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulation 2015, ("SEBI(LODR)") read with Ind AS-110 (Consolidated Financial Statement), Ind AS-28 (Investments in Associates and Joint Ventures), the consolidated audited financial statement forms part of the Annual Report.
9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
During the year under review and till the date of this report, Companies listed in Annexure I to this Report have become or ceased to be Subsidiaries of the Company.
A statement providing details of performance and salient features of the financial statements of Subsidiary/ Associate/ Joint Venture Companies, as per Section 129(3) of the Act is annexed herewith and marked as Annexure II to this report.
The audited financial statement including the consolidated financial statement of the Company and all other documents required to be attached thereto is put up on the Company''s website and can be accessed at https:// www.hathwav.com/About/QuarterlvFinancialResults#.
The financial statements of the subsidiaries, as required, are put up on the Company''s website and can be accessed at https://www.hathway.com/About/Subsidiaries.
The Company has formulated a policy for determining Material Subsidiaries and the same is put up on the Company''s website and can be accessed at https:// www.hathwav.com/assets/pdf/Policies/Policv%20on%20 material%20subsidiaries 2014-15 11.02.2015.pdf
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly complied with by the Company.
11. DIRECTORSâ RESPONSIBILITY STATEMENT
The Board of Directors state that:
a) in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2022 and of the profit of the Company for the financial year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a ''going concern'' basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (âSEBIâ).
The detailed Corporate Governance Report of the Company in pursuance of the SEBI ("LODR") forms part of the Annual Report of the Company. The requisite Certificate from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the SEBI ("LODR") is enclosed to the Corporate Governance Report.
13. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arm''s length basis.
During the year, the Company had not entered into any contract/ arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions or which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.
The Policy on Materiality of Related Party Transactions i and dealing with Related Party Transactions as approved i by the Board is put up on the Company''s website and i can be accessed at https://www.hathwav.com/assets/ i pdf/Policies/Related%20Party%20Transactions%20 i Policy 16.01.2020.pdf l
Members may refer Note 4.13 to the Standalone Financial | Statement which sets out related party disclosures i pursuant to Ind AS.
14. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (âCSRâ) Committee''s i prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the objectives set out in the i ''Corporate Social Responsibility Policy'' (âCSR Policyâ). The CSR Policy of the Company, inter alia, covers CSR i vision and objective and also provides for governance, i implementation, monitoring and reporting framework.
The CSR Policy is put up on the Company''s website and i can be accessed at https://www.hathway.com/assets/pdf/ i Policies/CSR%20Policy.pdf. i
In terms of the CSR Policy the focus areas of engagement | shall be eradicating hunger, poverty, preventative health | care, education, rural areas development, gender equality, i empowerment of women, environmental sustainability i and protection of national heritage, art and culture and i other need based initiatives.
During the year under review, the Company has spent | '' 1,66,00,000 i.e. 2% of the average net profit of last three | financial years on CSR activities.
The Annual Report on CSR activities as stipulated j under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith and marked as j Annexure III to this Report.
The Board of Directors of the Company have designed Risk Management Policy and framework to avoid events, situations or circumstances which may lead to negative impact on the Company''s businesses as a whole and have defined a structured approach to manage uncertainty and outcomes. Key business risks and their j mitigation are considered as a part of the annual/strategic j business plans and is reviewed by the Risk Management Committee on frequent basis.
The Company shall continue to have periodic review mechanism for monitoring of risk events and functional activities basis residual risk rating.
Further details on Risk Management activities are covered in Management Discussion and Analysis section as well as in Corporate Governance Report, which forms part of the Annual Report.
16. INTERNAL FINANCIAL CONTROLS
The Company''s internal as well as operational controls are commensurate with its size and the nature of its operations. The Company has put in place a defined risk management framework to identify, assess, monitor and mitigate risks at Enterprise level. Organisation adopts a systematic approach to mitigate risks associated with accomplishment of objectives, operations, performance and regulations. The Company believes that such steps would help to achieve stated objectives of the organisations.
The Audit Committee quarterly reviews adequacy and effectiveness of Company''s Internal Controls and monitors the implementation of audit recommendations, if any.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Akshay Raheja (DIN: 00288397) and Mr. Viren Raheja (DIN: 00037592), Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. The Board of Directors on the recommendation of the Nomination and Remuneration Committee (âNRCâ) have recommended their re-appointment.
Mr. Rajan Gupta (DIN: 07603128) whose tenure as Managing Director, expired on November 24, 2021, was re-appointed for a further period of 3 (three) years commencing from November 25, 2021 till November 24, 2024.
Save and except aforementioned, there were no other changes in the Board of Directors and Key Managerial Personnel of the Company.
The Company has received declarations from all Independent Directors of the Company confirming that they meet the criteria of independence prescribed under the Act and SEBI ("LODR").
During the year under review, NRC specified the manner for effective evaluation of performance of the Board, its committees and individual directors in accordance with the provisions of Section 178 of the Act and performance evaluation was carried out in accordance therewith.
The Board evaluated its own performance and performance of individual Directors. Each Committee self-evaluated its own performance and submitted its report of self-evaluation to the NRC. The NRC further evaluated based on self-evaluation reports submitted by various Committees and submitted its consolidated report on Committees evaluation to Board of Directors.
19. AUDITORS AND AUDITORSâ REPORT Statutory Auditors
M/s. Nayan Parikh & Co. Chartered Accountants (Firm Registration No.107023W) were appointed as Statutory Auditors of the Company for a term of 5 (five) consecutive years, at the Annual General Meeting held on September 15, 2017 and accordingly their first tenure shall end at the conclusion of the Sixty Second Annual General Meeting. The Board of Directors propose to re-appoint M/s. Nayan Parikh & Co. Chartered Accountants as Statutory Auditors of the Company for second term of 5 consecutive years beginning from the conclusion of the Sixty Second Annual General Meeting till the conclusion of Sixty Seventh Annual General Meeting. They have confirmed their eligibility and qualifications required under the Act for holding office as Statutory Auditors of the Company.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation, adverse remark or disclaimer.
The Board of Directors of the Company had appointed M/s. Rathi & Associates to conduct Secretarial Audit for the financial year 2021-22 The Secretarial Audit Report for the financial year ended March 31, 2022 is annexed herewith and marked as Annexure IV to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
The Board of Directors of the Company had appointed M/s. Ashok Agarwal & Co., Cost Accountants, as Cost Auditors of the Company for conducting the audit of the cost records relating to Broadband Operations of the Company for the financial year 2021-22 under Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014.
In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained cost accounts and records.
During the financial year ended March 31, 2022, 4 (four) Board Meetings were held. Further, details of the meetings of the Board and its Committees are given in the Corporate Governance Report, which forms part of the Annual Report.
The Audit Committee of the Company comprises Mr. Shridhar Gorthi (Chairman), Mr. Sasha Mirchandani, Mr. Viren Raheja and Ms. Ameeta Parpia as Members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.
Corporate Social Responsibility ("CSR") Committee
The CSR Committee comprises Mr. Viren Raheja (Chairman), Mr. Shridhar Gorthi and Mr. Rajan Gupta as Members.
Nomination and Remuneration Committee ("NRC")
During the financial year, Mr. Akshay Raheja resigned as a member from NRC and accordingly the NRC comprises Mr. Sasha Mirchandani (Chairman), Mr. Sridhar Gorthi and Mr. Viren Raheja as Members.
During the year under review, the Board has approved and adopted Policies namely Policy for Selection of Directors and Determining Directors'' Independence, Remuneration Policy for Directors, Key Managerial Personnel and Senior Management and Policy on Board Diversity, in place of existing Nomination and Remuneration Policy, which are put up on the Company''s website and can be accessed at: https://www. hathwav. com/assets/pdf/Policies/Policv%20 for%20Selection%20of%20Directors.pdf
https://www.hathway.com/assets/pdf/Policies/
Remuneration%20Policy%20for%20Directors.pdf
https://www.hathway.com/assets/pdf/Policies/Policy%20 on%20Board%20Diversity. pdf
The aforesaid Policies set out the guiding principles for the NRC for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent directors of the Company; recommending to the Board the remuneration of the directors, Key Managerial Personnel and Senior Management of the Company and the approach to diversity of the Board of the Company.
Stakeholders Relationship Committee ("SRC")
The SRC comprises Ms. Ameeta Parpia (Chairperson), Mr. Viren Raheja and Mr. Rajan Gupta as Members.
Risk Management Committee ("RMC")
The RMC comprises Ms. Ameeta Parpia (Chairperson), i Mr. Rajan Gupta and Mr. Ajay Singh as Members.
Business Responsibility Committee ("BRC")
The BRC comprises Mr. Rajan Gupta (Chairman) and i Mr. Viren Raheja as Member.
As required under Regulation 34(2)(f) of SEBI ("LODR"), i your Company has published the Business Responsibility | Report on its website which can be accessed at i https://www.hathwav.com/assets/pdf/Annual Report/ | Business Responsibility Report 2021-22.pdf. |
The details of the dates of the meetings, attendance and | terms of reference of the Committees are disclosed in the Corporate Governance Report, which forms part of i the Annual Report.
The Company promotes ethical behaviour in all its business activities. Towards this, the Company has adopted a Policy on Vigil Mechanism and Whistle Blower i Policy. Protected disclosures can be made by a whistle | blower through an e-mail or a letter to the Compliance Officer or to the Chairman of the Audit Committee. The Audit Committee also reviews compliants/issues (if any) raised through Vigil Mechanism or by any Whistle i blower on a quarterly basis.
During the year under review, the Board has updated the i Vigil Mechanism and Whistle Blower Policy which is put | up on the Company''s website and can be accessed at: https://www.hathway.com/assets/pdf/Policies/Vigil%20 i Mechanism%20and%20Whistle-Blower%20Policy.pdf. |
During the year under review, the Company has received i one complaint which was duly investigated and addressed | by the Audit Committee.
22. PARTICULARS OF LOANS GIVEN, | INVESTMENTS MADE, GUARANTEES GIVEN | AND SECURITIES PROVIDED
The Company, being a Company providing Infrastructural facilities, is exempted from the provisions of Section j 186 of the Act relating to loan and guarantee given, and i security provided by the Company.
During the year under review, the Company acquired i remaining stake of 3.64% i.e. 5,488 equity shares @ '' 10 | per Share aggregating to '' 54,880/- from the Joint Venture i partner in its Subsidiary Company - Hathway Kokan i Crystal Cable Network Limited. Post this acquisition, i Hathway Kokan Crystal Cable Network Limited has i become wholly owned subsidiary of the Company.
The Company has made further investment of '' 2,58,40,000/- through Rights issue in Hathway Sonali Om Crystal Cable Private Limited, Subsidiary Company.
23. PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
In accordance with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (âPOSH Actâ) and Rules made thereunder, the Company has formed Internal Complaint Committee for various work places to address complaints pertaining to sexual harassment in accordance with the POSH Act. The Company has a policy for prevention of Sexual Harassment, which ensures a free and fair enquiry process with clear timelines for resolution. There were no cases/complaints filed during the year under POSH Act.
24. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, is annexed herewith and marked as Annexure V to this Report.
25. ANNUAL RETURN
As required under Section 134(3)(a) of the Act, the Annual Return is put on the Company''s website and can be accessed at https://www.hathway.com/ assets/pdf/Annual%20Report/Annual%20Return%20 AGM 2022.pdf.
26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.
Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this Report.
Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such information may write to the Company on email id [email protected].
The Board of Directors state that no disclosure or reporting
is required in respect of the following matters as there
were no transactions or applicability pertaining to these
matters during the year under review:
i) Details relating to deposits covered under Chapter V of the Act.
ii) Issue of equity shares with differential rights as to dividend, voting or otherwise.
iii) Issue of shares (including sweat equity shares and Employees'' Stock Options Schemes) to employees of the Company under any scheme.
iv) Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
v) Fraud reported by the Auditors to the Audit Committee or the Board of Directors of the Company.
vi) Scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
vii) Payment of remuneration or commission from any of its holding or subsidiary companies to the Managing Director of the Company.
viii) Change in the nature of business of the Company.
ix) Instances of transferring the funds to the Investor Education and Protection Fund.
x) Issue of debentures/bonds/warrants/any other convertible securities.
xi) Details of any application filed for Corporate Insolvency under Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016.
xii) Instance of one-time settlement with any Bank or Financial Institution.
xiii) Statement of deviation or variation in connection with preferential issue.
The Board of Directors would like to express their sincere appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. The Board of Directors also wish to place on record their deep sense of appreciation for the committed services by the Company''s Executives, Staff and Employees.
Mar 31, 2018
DIRECTORS'' REPORT
Dear Members,
The Directors have pleasure in presenting the 58th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2018.
1. FINANCIAL AND OPERATION OVERVIEW:
a. financial Highlights:
Your Company''s performance during the year ended 31st March, 2018 as compared to the previous financial year, is summarized as below:
(Rs, in Crores)
standalone |
Consolidated |
|||
particulars |
2017-18 |
2016-17 |
2017-18 |
2016-17 |
Operating & Other Income |
556.51 |
1330.50 |
1544.36 |
1368.23 |
Earnings before interest, depreciation, amortization, exceptional item, share of profit of associates and JVs & taxes |
236.98 |
259.93 |
345.37 |
220.56 |
Finance Cost |
78.34 |
110.30 |
152.76 |
110.75 |
Depreciation & Amortization |
97.19 |
300.76 |
334.70 |
305.75 |
Exceptional Items |
(16.21) |
3.49 |
5.34 |
0.74 |
Share of profit / (loss) of an associate and joint ventures |
- |
- |
39.13 |
2.89 |
Provision for Taxation - Current Tax & Deferred Tax |
- |
- |
0.44 |
0.34 |
Net Profit/(Loss) |
77.66 |
(154.62) |
(107.86) |
(193.45) |
Other Comprehensive Income/(Loss) |
1.26 |
0.31 |
2.65 |
0.26 |
total comprehensive Income/(loss) |
78.92 |
(154.31) |
(105.21) |
(193.19) |
During the year under review, the total income of your Company was Rs, 556.51 Crores on a standalone basis and Rs, 1544.36 Crores on a consolidated basis as compared to the previous financial year''s total income of Rs, 1330.50 Crores on a standalone basis and Rs, 1368.23 Crores on a consolidated basis. For the financial year under review, the Company has earned net profit of Rs, 78.92 crores on a standalone basis reflecting a significant growth of 151.00% as against net loss of Rs, 154.31 crores in the previous financial year. During the year under review, the net loss of the Company was Rs, 105.21 crores compared to Rs, 193.19 crores in the previous financial year on a consolidated basis.
As of closing hours of 31st March 2017, the Company had transferred its Cable Television business through slump sale to its wholly owned subsidiary, Hath way Digital Private Limited. Hence the standalone numbers for the current financial year are not comparable with the standalone numbers of previous financial year.
b. Operational Highlights:
During the year under review, the broadband business has performed exceptionally well. The new upgraded technology DOCSIS 3.1, advent of GPON Fiber to the home, delighting customers with enhanced data limits and efficient customer services have helped your Company reach 5th position in cable wire line broadband. (Source TRAI - The Indian Telecom Services Performance Indicators - Jan - Mar, 2018)
Your Company has carved out its Cable Television business and transferred it to its wholly owned subsidiary - Hath way Digital Private Limited (f.k.a Hath way Datacom Central Private Limited), through slump sale as of closing hours of March 31, 2017. Hath way Digital Private Limited (HDPL) is now, one of the largest MSO with 7.2 Mn digital subscribers which are spread across pan India. HDPL has made concentrated efforts to accelerate monetization across all the phases.
Y during the year, the focus has been on monetization of Phase III and IV in Cable Television Business and to increase Broadband foot prints through, network expansion in Chennai, Indore and Kolkata.
YTPL Hath way Limited, one of the Joint ventures of your Company, has been successfully listed on BSE Limited and National Stock Exchange of India Limited on 4th July, 2017. Your Company had offered sale of 7.2 Mn shares in the Initial Public Offer (IPO) and money received from such sale of shares has been used for repayment of debt. Post the IPO, the Company now holds 37.32% in GTPL Hath way Limited.
broadband business:
Yue to constant focus on network expansion, your Company has added 0.8 Mn Home Pass during the year, reaching 5.2 Mn Home Pass at the end of the year under review.
India has around 17.96 Mn wire line broadband subscribers as on 31st March, 2018 (As per revised definition i.e. a Broadband customer is a customer having minimum speed of 512 kbps). Comparing the trend on year on year basis, the wire line broadband number has declined by 0.28 Mn subscribers (March 2017 18.24 Mn) [Source -TRAI report December 2017]. However, your Company has added 0.16 Mn customers during the year. Customers increasingly prefer wire line broadband as it allows online media consumption and seamless accessibility of data to multiple devices while at home.
As of 31st March, 2018, your Company has 0.80 Mn broadband subscribers with ARPU of '' 710/. With high quality and high capacity Hybrid Fiber Coaxial (HFC) Network, your Company is well placed to garner a larger share of high speed broadband market.
Your Company is providing services in all 4 metros and all major mini metros with latest addition of ultra-high speed ''GpON FTTH'' technology in South and West regions. Your Company is the first MSO to provide GPON FTTH service to retail customers. GPON FTTH facilitates data speed up to 1 Gbps and the equipment and network is designed to provide data speed up to 1 Gbps without any incremental investment. Your Company currently offers data speed up to 200 Mbps - 500Mbps to premium customers and provides data limit up to 1 Terabytes per customer per month (PCPM).
Y he average download PCPM has now increased to 103 GB / PCPM which clearly shows the consumption pattern shift from the small screen to larger screen.
We continue to upgrade our Docsis 3.0 customers to 3.1 and at the same time GPON FTTH parallel network is being deployed in high potential Docsis home passes. This increases the opportunities to increase market share by offering 200-500 Mbps speed to premium customers.
The customer consumption habits have changed and their experience of watching content has been enhanced in last 3 years due to abundant availability of regional content and content provided by Over The Top (OTT) players such as Netflix, Hotstar, Voot, Zee5, Sun Nxt, Yupp TV etc. This allows your customers to watch media content on the larger screen without compromising on the speed.
Your Company is equipped with technical upgrades that can provide speed up to 1 Gbps with nearly unlimited data access (up to 1024 GB/PCPM) at any point of time without any further investment or increase in cost.
Your National brand ambassador is versatile and popular actor R. Madhavan, he has added star power to drive the broadband business. He is a well-known actor and has been among the early movers in digital phenomenon and we are extremely proud to have him as the face of our brand.
cable television business:
Your company''s footprints through its 100% wholly owned subsidiary i.e. HDPL in DAS III and IV market has now started getting monetized. During the year, in the Phase III and IV market the ARPUs have significantly increased to Rs, 70/- from Rs, 50/- last year and subsequently the Phase IV ARPUs have now reached Rs, 55/- which has resulted in healthy growth in subscription revenue.
Y he Company''s online portal âHath way Connectâ has been implemented in 2/3rd of our customer base and 55% of payment by LCOs and primary subscribers are now paid online. This creates stability in business and increase in collection efficiency to 98%.
New regulation
With reference to the new regulations i.e. Telecommunication (Broad casting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (The Regulations), the Telecommunications
(Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 (The Tariff Order) and The Telecommunication (Broadcasting and Cable) Services Standards of Quality of Service and Consumer Protection (Addressable Systems) Regulations, 2017 (QOS) brought in by the Sector Regulator-Telecom Regulatory Authority of India and notified on 3rd March, 2017, which were stayed, have now, post the Order by majority pronounced by the Hon''ble High Court of Madras on 2nd March, 2018 and 23rd May, 2018 have been vacated, where it was pending for hearing.
Y he Madras High Court after hearing all parties to the Writ Petition vide its majority view, has rejected the plea of Star India Private Limited and Vijay Television Private Limited and held that the challenge to the Regulation and Tariff Order by the above Broadcasters should fail.
These regulations envisage sweeping changes in the existing model and is expected to benefit all the stakeholders in the value chain (viz) Broadcaster, MSO, LCO and Customer. The proposed regulation is the outcome of several issues arising out of flaws and imbalances in the erstwhile regulatory regime which was skewed in favour of the broadcaster and LCO.
IT & Other initiatives
You serve our growing customer base and taking the lead for future your Company has taken various initiatives on backend IT support.
The Company has tied up with Tata Consultancy Service (TCS) as Implementation Partners to automate various functions/processes and to improve the Quality of services.
To support âDigital Indiaâ Flag ship campaign and for customer convenience, your company has promoted the âGo Cashlessâ options by encouraging online payment options including a tie up with digital wallet platforms to encourage LCOs and the Subscribers to pay online. Due to these initiatives we now receive 70% of our Broadband collections online and 55% of our Cable television business collections online.
The Company is focusing constantly on utilization of technology to automate its processes across functions to achieve cost optimization.
c) consolidated Accounts:
The consolidated financial statements of your Company for the financial year 2017-2018 are prepared in compliance with applicable provisions of
the Companies Act, 2013, Indian Accounting Standards (âInd ASâ) notified u/s 133 of the Companies Act, 2013 and relevant rules issued there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR)) as prescribed by the Securities and Exchange Board of India.
d) Report on performance of subsidiary companies, associate companies and joint ventures:
A statement containing the performance and financial position of each of the subsidiaries, associates and joint ventures for the financial year ended 31st March, 2018 is given pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 (including any subsequent amendment thereof) in AOC-1 in Annexure
- I to this report.
Details of Companies/entities which have become or ceased as subsidiary company, associates and joint ventures, during the year under review, are as under:
Name of the Company |
Relationship with the Company |
Details of changes |
Date of change |
*GTPL Hath way Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Anjali Cable Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Solanki Cable Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Zigma Vision Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL SK Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Video Badshah Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Broadband Private Limited (f.k.a GTPL Kutch Network Private Limited) |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL City Channel Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL SMC Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Surat Telelink Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Vidarbha Telelink Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Space City Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Vision Services Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Narmada Cyberzone Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Shivshakti Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Link Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL VVC Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Blue Bell Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Parshwa Cable Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Insight Channel Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Kolkata Cable & Broadband Pariseva Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
Name of the Company |
Relationship with the Company |
Details of changes |
Date of change |
GTPL Dahod Television Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Jay Santoshima Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Sorath Telelink Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
Gujarat Telelink East Africa Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Shiv Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL DCPL Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Bansidhar Telelink Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Sharda Cable Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Ahmedabad Cable Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
DL GTPL Cabnet Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL V & S Cable Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Video Vision Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
Vaji Communication Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL KCBPL Broad band Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Junagadh Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Deesha Cable net Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Kaizen Infonet Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Meghana Distributors Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Abhilash Communication Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Chelikam Networks (India) Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
Vizianagar Citi Communications Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL Jay Mataji Network Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
GTPL TV Tiger Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
DL GTPL Broadband Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
04.07.2017 |
Hath way Patiala Cable Private Limited (f.k.a. Hath way Sukhamrit Cable and Datacom Private Limited) |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
31.03.2018 |
*GTPL Hath way Limited is now an Associate Company.
** During the financial year 2017-18, the investment in equity shares of Hath way Patiala Cable Private Limited (f.k.a. Hath way Sukhamrit Cable and Datacom Private Limited) was classified as investment in Joint Venture. However, the management no longer intends to exercise its influence in operations of Hath way Patiala Cable Private Limited. Accordingly, such interest in Hath way Patiala Cable Private Limited has been reclassified and measured as financial assets in terms of IndAS 109 and hence ceases to be a subsidiary company.
A he financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company.
e) Management Discussion and Analysis:
The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry structure and development, business overview, financial performance review in broadband business, key growth drivers, opportunities and threats, risks and concerns, internal control systems and its adequacy.
f) Dividend:
A considering the losses incurred during the year under review, your directors have not recommended any dividend for the financial year under review. However, as per Regulation 43A of SEBI (LODR), the Company has formulated Dividend Distribution Policy, which can be accessed through web link http://www. Hath way.com/About/Policies
g) Transfer to reserves:
I n view of losses incurred during the year under review, your Directors have not recommended transfer of any amount to reserves during the financial year under review.
h) Revision of financial statement:
There was no revision of the financial statements for the year under review.
i) Deposits:
A our Company has not accepted any public deposits during the year under review within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.
j) Disclosure of Internal Financial Controls:
Your Company''s internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. Your Company has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. Your Company uses an enterprise resource planning (ERP) system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. Your Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, process and operating level standard operating procedures. It has continued its efforts to align all its processes and controls with global best practices.
The entity level policies include code of conduct, whistle blower policy and other polices (like organization structure, insider trading policy, HR policy, Electronic Communication policy and Forex policy). The Company has also prepared Risk Control Matrix (RCM) for each of its pocesses like procure to pay, order to cash, treasury, fixed assets, inventory etc.
The Management Audit Team (MAT) had conducted a review and evaluated the design, adequacy and operating effectiveness of the Internal Financial Controls of the Company. Management testing has been conducted on a sample basis for Revenue ISP, Expenses and payables, Fixed Assets, Inventory, Procure to pay processes, Borrowings, Investments, Leases, Forex Exposure and Hedging, Compliances, Related Party, Consolidation, Retirement Benefit, Finalization, Loans & Advances, Contingent Liability and remedial action has been taken or agreed upon with a finite closure date where control weaknesses were identified. A summary of operating controls covered during the year are as follows:
Sr. No. |
Particulars |
No. |
1 |
Total controls |
1158 |
2 |
Controls verified |
1103 |
3 |
% of coverage |
96 |
During the year, no reportable material weakness in design and effectiveness was observed.
Based on the above, the Management believes that adequate Internal Financial Controls exist in relation to its Financial Statements.
k) Particulars of loans, guarantees, investments and securities:
As per Section 186 (11)(a) read with Schedule VI of the Companies Act, 2013, since the Company qualifies to be the Company providing infrastructural facilities, it is exempted from the applicability of Section 186 except for sub-section (1) of section 186 of the Companies Act, 2013. Accordingly, disclosure of details with respect to investment made, loan given, guarantee given and security made during the financial year 2017-18 in terms of Section 186(4) of the Companies Act, 2013 is not applicable.
2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of Section 152 of the Companies Act, 2013, Mr. Vinayak Aggarwal (DIN: 00007280), shall retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Your Directors recommend the same for your approval.
A n accordance with the provisions of the Companies Act, 2013, none of the Independent Directors are liable to retire by rotation.
A r. Vineet Garg resigned as Chief Financial Officer (Key Managerial Personnel) of the Company w.e.f May 15, 2018.
b. DECLARATION BY INDEPENDENT DIRECTORS:
our Company has received declarations from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.
3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
a. BOARD MEETINGS:
The Board of Directors of the Company met 7 (seven) times during the financial year ended 31st March, 2018 in accordance with the provisions of the Companies Act, 2013 and rules made there under.
A he dates on which the Board of Directors of the Company met during the financial year under review are as under:
Sr. No. |
Date of Meeting |
1. |
30th May, 2017 |
2. |
21st July, 2017 |
3. |
10th August, 2017 |
4. |
15th September, 2017 |
5. |
2nd November, 2017 |
6. |
22nd December, 2017 |
7. |
12th February, 2018 |
b. DIRECTOR''S RESPONSIBILITY STATEMENT:
An terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31st March, 2018, the Board of Directors of the Company hereby confirm that:
a. i n the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and the directors 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 as at 31st March, 2018 and of the profit of the Company for that year;
c. a roper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. t he annual accounts of the Company have been prepared on a going concern basis;
e. Internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. t roper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
c. NOMINATION AND REMUNERATION COMMITTEE:
B he Board of Directors have in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining credentials, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management Personnel. Annexure-II to this report provides Nomination and Remuneration Policy.
d. AUDIT COMMITTEE:
the scope and terms of reference of the Audit Committee is in accordance with section 177 of the Companies Act, 2013, Audit Charter adopted by the Board of Directors in their meeting held on 11th February, 2015 and the applicable provisions of SEBI (LODR).
The Audit Committee as on the date of this report comprises of:
Sr. No. |
Name of the Member |
Designation |
1 |
Mr. Sridhar Gorthi |
Chairman |
2 |
Mr. Viren Raheja |
Member |
3 |
Mr. Sasha Mirchandani |
Member |
4 |
Mr. Devendra Shrotri |
Member |
5 |
Ms. Ameeta Parpia |
Member |
During the year under review, the Board of Directors of the Company accepted all the recommendations of the Committee.
e. STAKEHOLDERS'' RELATIONSHIP COMMITTEE:
Pursuant to Section 178 of the Companies Act, 2013, the Company has Stakeholders'' Relationship Committee of Board of Directors comprising of the following as on the date of this report:
Sr. No. |
Name of the Member |
Designation |
1 |
Mr. Vinayak Aggarwal |
Chairman |
2 |
Mr. Viren Raheja |
Member |
3 |
Mr. Rajan Gupta |
Member |
B he Company Secretary acts as the Secretary of the Stakeholders'' Relationship Committee.
f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
B he Board of Directors of the Company have pursuant to the provisions of Section 178(9) read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 of the Companies Act, 2013, framed âVigil Mechanism Policyâ for directors and employees of the Company. The said policy provides a mechanism which ensures adequate safeguard to employees and directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.
B he employees of the Company have the right/option to report their concern/ grievance to the Chairman of the Audit Committee.
Your Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.
g. RISK MANAGEMENT POLICY:
the Board of Directors of the Company have designed Risk Management Policy and guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company''s businesses and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews.
h. CORPORATE SOCIAL RESPONSIBILITY POLICY:
As per the provisions of Section 135 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 of the Companies Act, 2013 and any subsequent amendment thereof, the Board of Directors have constituted Corporate Social Responsibility (CSR) Committee. However, since the Company has no profits in the immediately preceding
3 (three) financial years, no amount was required to be spent for corporate social responsibility activities. However, the Company voluntarily spends on various social causes. The CSR Policy of the Company is available on the Company''s website and can be accessed in the link provided herein below: http://www.Hath way.com/assets/InvFile/HCDL CSR Policy.pdf
i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:
B he performance of the Board of Directors and its Committees, Individual Directors and Chairman was evaluated and the same was recorded as satisfactory. The manner of performance evaluation was carried as set out in Nomination and Remuneration Policy.
j. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION AMENDMENT RULES, 2016:
B he ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review and Statement containing the particulars of employees in accordance with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 is given in
Annexure - III.
k. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
B he Board of Directors of the Company have complied with the applicable secretarial standards issued by the Institute of Company Secretaries of India and approved by the Central Government under section 118(10) of the Companies Act, 2013.
4. AUDITORS AND REPORTS
B he matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2018:
The report of Statutory Auditors on accounts for the year ended 31st March, 2018 forms part of the financial statement. The observations made by the Statutory Auditors in their report for the financial year ended 31st March, 2018 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board of Directors under Section 134(3) of the Companies Act, 2013.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31st MARCH 2018:
Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. Rathi and Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the financial year 2017-18.
secretarial Audit Report issued by M/s. Rathi and Associates, Company Secretaries in Form MR-3 for the financial year 2017-18 forms part to this report and the same is attached as Annexure - IV. The said report does not contain any qualification, reservation or adverse remark and therefore do not call for any further explanation or comments from the Board of Directors under Section 134(3) of the Companies Act, 2013.
c. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/ Circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at their meeting held on 28th May, 2018, appointed M/s. Ashok Agarwal & Co, Cost Accountants, as the Cost Auditors of the Company for the financial year 201819. The remuneration proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM would not be exceeding '' 5,75,000/-(Rupees Five Lakh Seventy Five Thousand only) plus reimbursement of out of pocket expenses plus applicable taxes, if any. The Cost Audit Report will be filed within the stipulated period of 180 days from the closure of the financial year.
5. OTHER DISCLOSURES
A) OTHER DISCLOSURES AS PER PROVISIONS OF SECTION 134 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ACCOUNTS) RULES, 2014 ARE FURNISHED AS UNDER:
a. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)
(a) of the Companies Act, 2013, extract of the Annual Return for the financial year ended 31st March, 2018 made under the provisions of Section 92(3) of the Companies Act, 2013 is attached as Annexure -V which forms part of this Report.
b. A ONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
B he particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure - VI which forms part of this Report.
c. RELATED PARTY TRANSACTIONS:
During the financial year 2017-18, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014 and any amendment thereof, which were in the ordinary course of business and on arms'' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under and Regulation 34(3) and 53(f) and Schedule V of SEBI (LODR). During the financial year 2017-18, there were no transactions with related parties which qualify as material transactions under the applicable provisions of Companies Act, 2013 and SEBI (LODR).
* Includes provident fund of Rs, 665,520/-
d. A ORPORATE GOVERNANCE: (Applicable to Companies giving remuneration as per Section II of Schedule V):
Particulars |
Rajan Gupta |
All elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc. of all the directors (Applicable only in case of Managing Director) |
Rs, 21,916,092* |
Details of fixed component and performance linked incentives along with the performance |
Fixed: Rs, 19,853,092* |
criteria |
Variable: Rs, 2,063,000 |
Service contracts, notice period, severance fees |
- |
Stock option details, if any and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable |
- |
B) BUSINESS RESPONSIBILITY REPORT
As stated under Regulation 34(2)(f) of SEBI (LODR), since the Company falls under top 500 listed entities based on market capitalisation, as on 31st March, 2018, your Company is required to prepare the Business Responsibility Report covering key principles on areas like environment, social, governance, stakeholders'' relationships etc. and should form part of the Annual Report. As per SEBI''s Press Release No. 283/2015, the Business Responsibility Report can be given on the website of the Company, as a green initiative and a website link for the same can be given in Annual Report.
I n accordance with the aforesaid, your Company has published the Business Responsibility Report on its website which can be accessed through web link http://www.Hath way.com/About/AnnualReport
6. GENERAL:
Aour Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014.
3. Issue of sweat equity shares to employees of the Company as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014.
4. Issue of equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.
5. Instances of exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.
6. Payment of remuneration or commission from any of its holding or subsidiary companies to the Managing Director of the Company.
7. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
8. A assess filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
9. B here were no frauds reported by the auditor of the Company pursuant to sub-section 12 of section 143 of the Companies Act, 2013.
7. ACKNOWLEDGEMENTS AND APPRECIATION:
Aour Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/ associates, financial institutions, Regulatory bodies and Central and State Governments for their consistent support and encouragement to the Company.
For and on behalf of the Board
Rajan Gupta Vinayak Aggarwal
Place : Mumbai Managing Director Director
Date : 28th May, 2018 DIN 07603128 DIN 00007280
Registered Office
Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road,
Santacruz West, Mumbai 400054
CIN: L64204MH1959PLC011421
Tel No. 022-26001306 Fax No. 022-26001307
Mail: info@Hath way.net
website: www.Hath way.com
Mar 31, 2017
Dear Members,
The Directors have pleasure in presenting the 57th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2017.
1. FINANCIAL & OPERATION OVERVIEW:
a. Financial Highlights:
Your Companyâs performance during the year ended 31st March, 2017 as compared to the previous financial year, is summarized as below:
(Rs. in Crores)
Particulars |
Standalone |
Consolidated* |
||
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
Operating & Other Income |
1,330.50 |
1,120.86 |
1,368.23 |
1,155.03 |
Earnings before interest, depreciation, amortization, exceptional item, share of profit of associates and JVs & taxes |
260.45 |
191.99 |
221.07 |
139.11 |
Finance Cost |
110.30 |
89.49 |
110.75 |
89.84 |
Depreciation & Amortization |
300.76 |
254.49 |
305.75 |
258.86 |
Exceptional Items |
3.49 |
36.35 |
0.74 |
17.37 |
Share of profit / (loss) of an associate and joint ventures |
- |
- |
2.89 |
(11.01) |
Provision for Taxation - MAT Credit, Current Tax, Deferred Tax & (Excess)/Short provision for taxation in earlier years |
- |
- |
0.34 |
0.29 |
Net Profit/(Loss) |
(154.11) |
(188.33) |
(192.94) |
(237.69) |
Other Comprehensive Income/(Loss) |
0.31 |
(2.75) |
0.26 |
(2.83) |
Total Comprehensive Income/(Loss) |
(153.80) |
(191.08) |
(192.68) |
(240.51) |
* Financials for FY 2017 and FY 2016 have been prepared in compliance with applicable provisions of Indian Accounting Standards (âIND ASâ) notified u/s 133 of the Companies Act, 2013 read with relevant rules issued thereunder. Please refer Notes to Consolidated Financial Statements - 4.23 (Note 12 : Subsidiaries consolidated under previous GAAP classified as Joint Venture under IND AS).
During the year under review, the total income of your Company was Rs.1,330.50 Crores on a standalone basis and Rs.1,368.23 Crores on a consolidated basis as compared to the previous financial yearâs total income of Rs.1,120.86 Crores on a standalone basis and Rs.1,155.03 Crores on a consolidated basis. The net loss for the year under review, after taxation and exceptional items, stood at Rs.153.80 Crores on a standalone basis and Rs.192.68 Crores on a consolidated basis.
b. Operational Highlights:
Being in the leadership position amongst the MSO space, your Company has made tremendous efforts to complete digitization of its universe and expand into new territories. Currently, the Company has digitised 94% of its cable TV universe and target to achieve complete digitization by the next fiscal.
During the year under review, the broadband business has continued to perform exceptionally well. With the upgradation of technology from DOCSIS 3.0 to DOCSIS 3.1 and advent of GPON Fiber to the home, the broadband business will constantly spearhead innovation thereby delighting the customers with enhanced data limits and efficient customer service.
Your Companyâs presence in cable TV services has expanded to over 525 cities and towns, whereas broadband services are available in 29 locations across India, with Chennai, Indore and Kolkata being the latest additions this year. During the fiscal year under review, your Company decided to carve out the cable TV business and transfer it to a wholly owned subsidiary - Hathway Digital Private Limited (f.k.a Hathway Datacom Central Private Limited), through slump sale. The rationale behind such a path breaking move is to ensure focused attention to each division of the Company along with creation of independent investment structures for future fund raising.
(i) CABLE TV BUSINESS:
DAS III and IV
During the year, the Company has significantly expanded its presence in DAS III and IV markets by growing its active base predominantly in Karnataka, West Bengal and Odisha. The mandated sunset date for analogue signals in DAS III market was 31st January, 2017 and in DAS IV was 31st March, 2017. Subsequent to analogue switch off date, the Company has begun a gradual implementation of âHathway Connectâ in Phase III and Phase IV markets.
New regulation
During the year, the regulator TRAI notified a new set of regulations to govern the industry. However, pursant to the challenge to these regulations by Star India Private Limited and Vijay Telivision Private Limited, the same are currently stayed. The proposed regulation envisages sweeping changes in the existing model and is expected to benefit all the stakeholders in the value chain (viz) Broadcaster, MSO, LCO and Customer. The proposed regulation is the outcome of several issues arising out of flaws and imbalances in the erstwhile regulatory regime which was skewed in favour of the broadcaster and LCO.
Value Added Services
The Company in its pursuit of enhancing customer delight, launched a slew of 8 unique advertisement-free services spanning across several niche genres of content, branded as âHathway Specialâ. It was a first of its kind initiative in Cable and elevated the positioning of your Company on par with leading DTH service providers in the country.
Your Company also launched a dedicated barker channel called âMy Hathwayâ to promote various offering - HD, PVR, tiered packaging, VAS, inhouse channels.
Your Company launched 4 new in-house channels and also undertook a brand refresh of all the inhouse channels by changing the logo and packaging elements to bring them on par with satellite channels.
IT & Other initiatives
The Company encouraged its customers to âGo Cashlessâ by introducing several online payment options including tie up with digital wallet platforms in line with the PMâs flagship âDigital Indiaâ campaign
The Company also commenced digital sign off of Interconnect agreements with LCOs through âHathway Connectâ.
The Company is focusing constantly on utilization of technology to automate Companyâs process to achieve cost optimization.
(ii) BROADBAND BUSINESS:
Constant focus on network expansion, your Company has added 1.2 Mn Home Pass during the year, resulting in 5.4 Mn Home Pass at the end of the year under review. This makes us the largest MSO providing such services in the country.
India has around 18.24 Mn wireline broadband subscribers as on 31st March, 2017 (As per revised definition i.e. a customer having minimum speed of 512 kbps). Comparing the trend on year on year basis, the wireline broadband number has increased by 1.26 Mn subscribers (FY16: 16.98 Mn) [Source -TRAI report March 2017]. Your Company has added 0.27 Mn customers during the year. Consumers increasingly prefer wireline broadband as it allows online media consumption and seemless accessibility of data to multiple devices while at home.
As of 31st March, 2017, your Company has over 0.89 Mn broadband subscribers with the ARPU of Rs.654/-, which makes us the largest MSO in the country having highest number of broadband subscribers. With a high quality and high capacity Hybrid Fiber Coaxial (HFC) Network, your Company is well placed to garner a larger share of the growing broadband market.
During the last year, your Company has added new markets such as Kolkata, Indore and latest being Chennai. Now your Company is providing services in all 4 metro and all major mini metros. Your Company has introduced ultra-high speed âGPON FTTHâ technology at Chennai. Your Company is the first MSO to provide GPON FTTH service to retail consumers.
GPON FTTH facilitates data speed up to 1 Gbps. Your Company has deployed equipment and network is designed to provide data speed upto 1 Gbps without any incremental investment. In Chennai, your Company offers data speed up to 200 Mbps and data limit upto 1 TB per consumer per month (PCPM). This clearly shows the Company is ready with technical upgrades to give the services up to 1 Gbps speed with nearly unlimited data access (upto 1024 GB PCPM) at any point of time without any further investment and increase in cost.
During the last 3 year expansion of availability of online media in vernacular language at reasonable cost and reduction in cost of devices, there has been a shift in the consumersâ data consumption pattern. Youth of the country have started consuming more and more media online and this has fueled the demand for high speed access of data. There has been a rapid increase in consumption of data. In last 12 months it has more than doubled from 30 GB PCPM to 70 GB PCPM. Your Company is focusing on increasing reach of its GPON FTTH technology to existing markets first. This will help your Company to meet the change in data consumption habits thereby enhancing customer delight and offering better value for money.
Your Company has roped in versatile and popular actor R. Madhavan as the national brand ambassador, adding star power to drive the broadband business. It is a well-known fact that actor R. Madhavan has been among the early movers in tapping into the digital phenomenon and we are extremely proud to have him as the face of the brand. His huge popularity, pan-India acceptance, and charismatic personality as the youth icon, will help us increase our customer footprint across India. Your Company proudly welcomes the actor into the Hathway family.
c) Consolidated Accounts:
The consolidated financial statements of your Company for the financial year 2016-2017 are prepared in compliance with applicable provisions of the Companies Act, 2013, Indian Accounting Standards (âInd ASâ) notified u/s 133 of the Companies Act, 2013 and relevant rules issued thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI(LODR)) as prescribed by the Securities and Exchange Board of India.
d) Report on performance of subsidiaries, associates and joint venture Companies:
A statement containing the performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended 31st March, 2017 is given pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 and 8 of the Companies (Accounts) Rules, 2014 in AOC-1 in Annexure - I to this report.
Name of the Company |
Relationship with the Company |
Details of changes |
Date of change |
Hathway Universal Cabletel and Datacom Private Limited |
Wholly Owned Subsidiary Company |
Ceased to be Wholly Owned Subsidiary Company of the Company |
17.03.2017 |
Hathway Rajesh Multi Channel Private Limited |
Subsidiary Company |
Ceased to be Subsidiary Company of the Company |
16.03.2017 |
Hathway Universal VCN Cable Network LLP |
Limited Liability Partnership |
Hathway Universal Cabletel and Datacom Private Limited, a wholly owned subsidiary of the Company ceases to be a designated partner in Hathway Universal VCN Cable Network LLP |
Note 1 |
Note 1 - Hathway Universal Cabletel and Datacom Private Limited ceased to be a designated partner vide MOU dated 21st October 2016, while the retirement deed was executed on 4th January 2017.
The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company.
e) Management Discussion and Analysis:
The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry structure and development, business overview, financial performance review in cable television business and broadband business, key growth drivers, opportunities and threats, risks and concerns, internal control systems and its adequacy.
f) Dividend:
Considering the losses incurred during the year under review, your directors have not recommended any dividend for the financial year under review. However, as per Regulation 43A of SEBI (LODR), since the Company falls under top five hundred listed entities as on March 31, 2017, the Company has formulated Dividend Distribution Policy, which can be assessed through web link http://www. hathway.com/About/Policies.
g) Transfer to reserves:
In view of losses incurred during the year under review, your Directors have not recommended transfer of any amount to reserves during the financial year under review.
h) Revision of financial statement:
There was no revision of the financial statements for the year under review.
i) Deposits:
Your Company has not accepted any public deposits during the year under review within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.
j) Disclosures under section 134(3)(l) of the Companies Act, 2013:
The Company transferred its cable TV business via Slump sale to Hathway Digital Private Limited (f.k.a Hathway Datacom Central Private Limited), a wholly owned subsidiary company of the Company effective close of business hours as of 31st March 2017.
k) Disclosure of Internal Financial Controls:
Your Companyâs internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. Your Company has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. Your Company uses an enterprise resource planning (ERP) system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, process and operating level standard operating procedures. It has continued its efforts to align all its processes and controls with global best practices.
The entity level policies include code of conduct, whistle blower policy and other polices (like organization structure, insider trading policy, HR policy, Electronic Communication policy and Forex policy). The Company has also prepared Risk Control Matrix (RCM) for each of its processes like procure to pay, order to cash, treasury, fixed assets, inventory etc.
The Management Audit Team (MAT) had conducted a review and evaluated the design, adequacy and operating effectiveness of the Internal Financial Controls of the Company. Management testing has been conducted on a sample basis for Revenue ISP, Revenue Cable TV, Expenses & payables, Fixed Assets, Inventory, Procure to pay processes, Borrowings, Investments, Leases, Forex Exposure and Hedging, Compliances, Related Party, Consolidation, Retirement Benefit, Finalisation, Loans & Advances, Contingent Liability and remedial action has been taken or agreed upon with a finite closure date where control weaknesses were identified. A summary of operating controls covered during the year are as follows:
Sr. No. |
Particulars |
No. |
1 |
Total controls |
1066 |
2 |
Controls verified |
1006 |
3 |
% of coverage |
94% |
During the year, no reportable material weakness in design and effectiveness was observed.
Based on the above, the Management believes that adequate Internal Financial Controls exist in relation to its Financial Statements.
j) Particulars of loans, guarantees, investments and securities:
As per Section 186 (11)(a) read with Schedule VI of the Companies Act, 2013, since the Company qualifies to be the Company providing infrastructural facilities, it is exempted from the applicability of Section 186 except for sub-section (1) of section 186 of the Companies Act, 2013. Accordingly, disclosure of details with respect to investment made, loan given, guarantee given and security made during the financial year 2016-17 in terms of Section 186(4) of the Companies Act, 2013 is not applicable.
2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Mr. Biswajit Subramanian (DIN:00905348), Director of the Company resigned from the Board w.e.f March 2, 2017.
In accordance with the provisions of the Companies Act, 2013, none of the Independent Directors are liable to retire by rotation.
As per the provisions of Section 152 of the Companies Act, 2013, Mr. Akshay Raheja (DIN: 00288397) and Mr. Viren Raheja (DIN: 00037592), shall retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment. Your Directors recommend the same for your approval.
Mr. Rajan Gupta was appointed as an Additional Director and also Managing Director of the Company w.e.f. 25th November, 2016. As per Section 161 of the Companies Act, 2013, an Additional Director holds office upto the date of next AGM. Accordingly, the Company has received notice u/s 160 of the Companies Act, 2013 along with the requisite deposit from a shareholder proposing the candidature of Mr. Rajan Gupta, for the office of Director of the Company. His appointment and remuneration payable to him were approved by the shareholders through postal ballot on 13th January 2017.
b. DECLARATION BY INDEPENDENT DIRECTORS:
Your Company has received declarations from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.
3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
a. BOARD MEETINGS:
The Board of Directors met 7 times during the financial year ended 31st March, 2017 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder.
The dates on which the Board of Directors met during the financial year under review are as under:
Sr. No. |
Date of Meeting |
1. |
26th May, 2016 |
2. |
17th August, 2016 |
3. |
31st August, 2016 |
4. |
25th November, 2016 |
5. |
12th January, 2017 |
6. |
8th February, 2017 |
7. |
24th March, 2017 |
b. DIRECTORâS RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31st March, 2017, the Board of Directors hereby confirm that:
a. i n the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and the directors 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 as at 31st March, 2017 and of the loss of the Company for that year;
c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
c. NOMINATION AND REMUNERATION COMMITTEE:
The Board of Directors have in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining credentials, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management Personnel. Annexure-II to this report provides Nomination and Remuneration Policy.
d. AUDIT COMMITTEE:
The scope and terms of reference of the Audit Committee are in accordance with section 177 of the Companies Act, 2013, Audit Charter adopted by the Board of Directors in their meeting held on 11th February, 2015 and the applicable provisions of SEBI (LODR).
During the year under review, the Board of Directors of the Company accepted all the recommendations of the Committee.
e. STAKEHOLDERSâ RELATIONSHIP COMMITTEE:
Pursuant to Section 178 of the Companies Act, 2013, the Company has Stakeholdersâ Relationship Committee of Board of Directors. Owing to resignation of Mr. Jagdishkumar G. Pillai as Managing Director and Chief Executive Officer from the Board of Directors of the Company, the Committee was reconstituted as below:
Sr. No. |
Name of the Member |
Designation |
1 |
Mr. Vinayak Aggarwal |
Chairman |
2 |
Mr. Viren Raheja |
Member |
3 |
Mr. Rajan Gupta |
Member |
The Company Secretary acts as the Secretary of the Stakeholdersâ Relationship Committee.
f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
The Board of Directors of Company have pursuant to the provisions of Section 178(9) read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 of the Companies Act, 2013, framed âVigil Mechanism Policyâ for directors and employees of the Company. The said policy provides a mechanism which ensures adequate safeguard to employees and directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.
The employees of the Company have the right/ option to report their concern/ grievance to the Chairman of the Audit Committee.
Your Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.
g. RISK MANAGEMENT POLICY:
The Board of Directors of the Company have designed Risk Management Policy and guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Companyâs businesses and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews.
h. CORPORATE SOCIAL RESPONSIBILITY POLICY:
As per the provisions of Section 135 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 of the Companies Act, 2013 and any subsequent amendment thereof, the Board of Directors have constituted Corporate Social Responsibility (CSR) Committee. However, since the Company has no profits in the preceding 3 financial years, no amount was required to be spent for corporate social responsibility activities. Hence, the Company has not undertaken any CSR initiatives during the year under review. The CSR Policy of the Company is available on the Companyâs website and can be accessed in the link provided herein below: http://www.hathway.com/assets/InvFile/HCDL_CSR_Policy.pdf
i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:
The performance of the Board of Directors and its Committees, Individual Directors and Chairman was evaluated and the same was recorded as satisfactory. The manner of performance evaluation was carried as set out in Nomination and Remuneration Policy.
j. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) AMENDMENT RULES, 2016:
The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review and Statement containing the particulars of employees in accordance with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 is given in Annexure - III.
4. AUDITORS AND REPORTS
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2017:
The report of Statutory Auditors on accounts for the year ended 31st March, 2017 forms part of the financial statement. The observations made by the Statutory Auditors in their report for the financial year ended 31st March, 2017 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board of Directors under Section 134(3) of the Companies Act, 2013.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2017:
Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. Rathi and Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the financial year 2016-17.
Secretarial Audit Report issued by M/s. Rathi and Associates, Company Secretaries in Form MR-3 for the financial year 2016-17 forms part to this report and the same is attached as Annexure - IV. The said report does not contain any qualification, reservation or adverse remark and therefore do not call for any further explanation or comments from the Board of Directors under Section 134(3) of the Companies Act, 2013.
c. APPOINTMENT OF AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. G. M. Kapadia & Co, Chartered Accountants, Mumbai have completed their tenure of 3 years as Statutory Auditors of the Company. Hence, the Board of Directors at their Meeting held on 30th May, 2017 proposed appointment of M/s. Nayan Parikh & Co, Chartered Accountants, as the Statutory Auditors of the Company for a term of 5 years. However, their appointment as Statutory Auditors of the Company shall be required to be approved by the members at the ensuing AGM. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.
Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of AGM for seeking approval of members.
d. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/ Circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at their meeting held on 30th May, 2017, appointed M/s. Ashok Agarwal & Co, Cost Accountants, as the Cost Auditors of the Company for the financial year 2017-2018. The remuneration proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM would not be exceeding Rs.5,75,000/- (Rupees Five Lakh Seventy Five Thousand only) plus reimbursement of out of pocket expenses, plus applicable taxes if any. The Cost Audit Report will be filed within the stipulated period of 180 days from the closure of the financial year.
5. OTHER DISCLOSURES
A) OTHER DISCLOSURES AS PER PROVISIONS OF SECTION 134 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ACCOUNTS) RULES, 2014 ARE FURNISHED AS UNDER:
a. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, extract of the Annual Return for the financial year ended 31st March, 2017 made under the provisions of Section 92(3) of the Act is attached as Annexure -V which forms part of this Report.
b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure - VI which forms part of this Report.
c. RELATED PARTY TRANSACTIONS:
During the financial year 2016-17, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014 and any amendment thereof, which were in the ordinary course of business and on armsâ length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Regulation 34(3) and 53(f) and Schedule V of SEBI (LODR). During the financial year 2016-17, there were no transactions with related parties which qualify as material transactions under the applicable provisions of the Companies Act, 2013 and SEBI (LODR).
d. CORPORATE GOVERNANCE: (Applicable to Companies giving remuneration as per Section II of Schedule V):
Particulars |
Rajan Gupta* (from 25.11.2016 to 31.03.2017) |
Jagdishkumar G. Pillai** (from 01.04.2016 to 25.11.2016) |
All elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors (Applicable only in case of Managing Director) |
7,289,449 |
16,120,094 |
Details of fixed component and performance linked incentives along with the performance criteria |
Fixed: 7,289,449 Variable: NIL |
Fixed:14,120,094 Variable: 2,000,000 |
Service contracts, notice period, severance fees |
- |
- |
Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable |
*Appointed as Managing Director of the Company w.e.f 25th November, 2016.
**Resigned as Managing Director and CEO w.e.f 25th November, 2016
B) BUSINESS RESPONSIBILITY REPORT
As stated under Regulation 34(2)(f) of SEBI (LODR), since the Company falls under top 500 listed entities based on market capitalization as on 31st March, 2017, Business Responsibility Report needs to be prepared covering key principles on areas like environment, social, governance, stakeholdersâ relationships etc. and should form part of the Annual Report. However, SEBI vide its Press Release No. 283/2015 declared that as a green initiative, the Business Responsibility Report can be given on the website of the Company providing website link for the same in Annual Report.
In accordance with the aforesaid, the Company has published the Business Responsibility Report on its website and can be accessed through web link http://www.hathway.com/About/AnnualReport
6. GENERAL:
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014.
3. Issue of sweat equity shares to employees of the Company as per provisions of Section 54(1 )(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014.
4. Issue of equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014
5. Instances of exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.
6. Payment of remuneration or commission from any of its Holding or subsidiary Companies to the Managing Director or the Whole-time Directors of the Company.
7. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
8. Cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
9. There were no frauds reported by the auditor of the Company pursuant to sub-section 12 of section 143 of the Companies Act, 2013.
7. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions, Regulatory bodies and Central and State Governments for their consistent support and encouragement to the Company.
For and on behalf of the Board
Rajan Gupta Vinayak Aggarwal
Managing Director Director
DIN 07603128 DIN 00007280
Place: Mumbai
Date: 30th May, 2017
Registered Office
Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road,
Santacruz West, Mumbai - 400054
CIN: L64204MH1959PLC011421
Tel No. 022-26001306 Fax No. 022-26001307
Mail: [email protected] website: www.hathway.com
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting the 56th Annual Report of
the Company together with the Audited Statement of Accounts for the
year ended 31st March, 2016.
1. FINANCIAL & OPERATION OVERVIEW:
a. Financial Highlights:
Your Company''s performance during the year ended 31st March, 2016 as
compared to the previous financial year, is summarized as below:
(Rs. In Crores)
Consolidated Standalone
Particulars 2015-16 2014-15 Growth
(%) 2015-16 2014-15 Growth
(%)
Operating &
Other Income 2,105.13 1,858.74 13.26 1,193.30 1,038.10 14.95
Earnings before
interest, 412.19 287.07 43.59 210.95 153.95 37.03
depreciation,
amortization
& taxes
Finance Cost 137.49 153.50 (10.43) 90.76 105.76 (14.18)
Depreciation &
Amortization 373.20 323.83 15.25 248.07 222.88 11.30
Impairment of
Tangible /
Intangible 6.42 4.10 56.59 6.42 4.09 56.97
Assets
Goodwill on
consolidation
written off - 3.77 (100.00) - - -
Prior Period
Expenses (Net) 1.70 (0.92)(284.78) 0.69 0.27 155.56
Exceptional
Items 3.75 (50.65)(107.40) 36.35 (3.84)(1046.61)
Amount
transferred
on change in
stake 18.40 7.62 141.47 - - -
in Subsidiaries/
Joint Ventures
Minority
Interest (29.84) (13.94) 114.06 - - -
Profit/(Loss)
Share of
Associates 1.12 0.40 180.00 - - -
Excess/Short
provision for
taxation (1.99) 0.93 2.92 - - -
in earlier
years
Provision for
Taxation - MAT 42.43 27.04 56.92 - - -
Credit,
Current Tax,
Deferred Tax &
(Excess)/Short
provision for
taxation in
earlier years
Net Profit/(Loss) (163.13) (180.45) 9.60 (171.34) (175.22) 2.21
During the year under review, the total income of your Company was Rs.
1,193.30 Crores on a standalone basis and Rs. 2,105.13 Crores on a
consolidated basis as compared to the previous financial year''s total
income of Rs. 1,038.10 Crores on a standalone basis and Rs. 1,858.74
Crores on a consolidated basis. The net loss for the year under review,
after taxation and exceptional items, stood at Rs. 171.34 Crores on a
standalone basis and Rs. 163.13 Crores on a consolidated basis.
b. Operational Highlights:
Your Company has now reached over 10.6 million digital subscribers out
of which 2.2 million subscribers digitized during current financial
year. As a result, 87% of universe is digitalized and now the Company
is one of the leading Multi System Operator (MSO) with highest digital
subscribers in India.
Your Company offers cable television services across 200 cities and
towns servicing through 23 digital headend. To promote advertisements
aired on cable channels, your Company introduced 4 new cable channels
namely DJAY, Lamhe, Home Theatre & Marathi Talkies. Your Company also
has more than 20 local cable channels including Music channel, Hathway
CCC, Hathway Shoppe, H-tube, Hathway Life, Hathway Movies and Hathway
Entertainment etc.
Your Company holds a pan India Internet Service Provider (ISP) license
and is the first cable television service provider to offer broadband
internet services. It has its presence in 22 cities across India with
around 3.3 million two-way broadband enabled homes passed and 0.627
million broadband customers as on 31st March, 2016. This makes your
company India''s largest & leading cable broadband services provider.
Your Company has won several awards in the past year including "Most
Outstanding National MSO for implementation of DAS" award by the BCS
Ratna Awards 2016.
(i) CABLE TV BUSINESS: DAS III
The Company has digitized 2.2 million customers in DAS III area in
current financial year and now your company has 4 million digital
subscribers in DAS III markets. During the year, Company has expanded
the foot print in Sikkim, West Bengal, Karnataka, Madhya Pradesh and
Maharashtra.
ROBUST BACKEND, BILLING & IT SYSTEM
During the year, your Company has launched robust Billing & IT System,
which enabled to launch prepaid payment method for Company''s direct
subscribers. Your Company has also launched self-care portal on web,
android and IOS platform. These initiatives have enhanced customer''s
experience and have provided them liberty to manage their connection
efficiently. This also yielded a significant improvement in efficiency
including higher collections per subscriber and has enhanced manpower
productivity, this freed up significant manpower to be re-deployed in
revenue enhancement initiatives.
Your Company has recently implemented an online portal for the Local
Cable Operator (LCOs); christened "Hathway Connect", which provide
complete transparency to LCO about his customers and would facilitate
managing its business efficiently and independently. This LCO portal is
an extension of Hathway''s backend system which supports LCO to service
customer in real time, comply with Quality of Service guidelines,
generate bills, receipts and reports etc.
LCO portal support automated pre-defined messages to customer to remind
for payments, offers, schemes, greetings and also support dunning. This
LCO portal supports packed wise share to be paid. LCO portal has also
enabled making online payment through net banking, credit cards, debit
cards, cash card and mobile wallets.
NEW PACKAGING
Your Company has introduced simplified package structure whereby
customer can customize pack by choosing from the 6 Genre Add ons and 7
Regional Language Add ons packs with base FTA pack. The packaging is a
first of its kind initiative for Cable Customers. To simplify selection
of package, there are only 2 pre-customized packs for the customers.
New packaging will not only help consumers to opt channel of their
choice, but it will also help company to enhance its revenues. Your
company has also increased High Definition (HD) channels to
approximately 50 Channels in the all major cities.
(ii) BROADBAND BUSINESS:
The broadband reach of your Company is about 3.3 million homes where it
can offer our services. This makes us the largest MSO providing such
services in the country. Your Company is a Category-A ISP and it covers
both retail and corporate segments. Apart from continuous expansion in
Delhi, Bangalore and Hyderabad, your company has also expanded
footprint in Indore and Kolkata for offering high speed broadband
services.
India has around 19.98 million wireline broadband subscribers as on
31st December, 2016 (As per revised definition i.e. a customer having
minimum speed of 512 kbps). Cable provides big potential for growth of
broadband penetration in the country considering the cable universe of
106 million CATV homes.
As of 31st March, 2016, your Company has over 0.63 million broadband
subscribers with the ARPU of Rs. 670/-, which makes us the largest MSO
in the country having highest number of broadband subscribers with an
all India rank of being the 5th largest ISP Company in the country.
With a high quality and high capacity HFC Network, your Company is well
placed to garner a larger share of the growing broadband market. Your
Company successfully implemented DOCSIS 3.0 high speed broadband
service in many cities for broadband business and has received a good
response to the same across Mumbai, Bangalore, Pune, Hyderabad and
Delhi. At present, we are providing 50 Mbps speed to our DOCSIS 3.0
customers and we are further augmenting our network to provide 100 MBPS
speed in future.
Your Company has also launched GPON Fibre to home services in Kolkata
with ZTE as technology partner. Using this latest technology, your
Company has built capability for providing up to 1 GBPS speed on mass
scale. We will be gradually implementing this technology for premium
consumers in other markets also.
Your company has also upgraded subscriber management system to QPS.
This is latest and one of the best available global technology from
CISCO. This also makes your Company''s business model more sustainable
and gives all of you healthy return of income. Your company has also
renewed association with international Lawn Tennis player Ms. Sania
Mirza as brand ambassador to ensure that there is further improvement
of customer perception about our services.
c) Consolidated Accounts:
The consolidated financial statements of your Company for the financial
year 2015-2016 are prepared in compliance with applicable provisions of
the Companies Act, 2013, Accounting Standards and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as
prescribed by the Securities and Exchange Board of India (SEBI).
d) Report on performance of subsidiaries, associates and joint venture
Companies:
A statement containing the performance and financial position of each
of the subsidiaries, associates and joint venture companies for the
year ended 31st March, 2016 is given pursuant to Section 129(3) of the
Companies Act, 2013 read with Rule 5 and 8 of the Companies (Accounts)
Rules, 2014 in AOC-1 in Annexure-I to this report.
Details of Companies/entities which have become or ceased as subsidiary
company, associates and joint ventures, during the year under review,
are as under:
Name of the
Company Relationship
with the Company Details of changes Date of change
GTPL KCBPL
Broad Band Subsidiary
Company Became subsidiary
of GTPL 14.03.2015
Pvt. Ltd. Hathway Private
Limited
GTPL Junagadh
Network Subsidiary
Company Became subsidiary
of GTPL 15.03.2016
Pvt Ltd Hathway Private
Limited
GTPL Deesha
Cable Net Subsidiary
Company Became subsidiary
of GTPL 17.09.2015
Pvt Ltd Hathway Private
Limited
GTPL Kaizen
Infonet Pvt. Wholly Owned
Subsidiary Acquired 100% shares 01.04.2015
Ltd Company
GTPL Meghana
Distributors Wholly Owned
Subsidiary Acquired 100% shares 17.11.2015
Pvt. Ltd. Company
GTPL Abhilash Subsidiary
Company Became subsidiary
of GTPL 15.06.2015
Communication
Pvt. Ltd. Hathway Private
Limited
GTPL Chelikam
Networks Subsidiary
Company Became subsidiary
of GTPL 23.05.2015
(India)
Pvt. Ltd. Hathway Private
Limited
Vizianagar
Citi Subsidiary
Company Became subsidiary
of GTPL 01.11.2015
Communications
P. Ltd. Hathway Private
Limited
The financial statements of the subsidiary companies and related
information are available for inspection by the members at the
Registered Office of your Company during business hours on all days
except Saturdays, Sundays and public holidays up to the date of the
Annual General Meeting as required under Section 136 of the Companies
Act, 2013. Any member desirous of obtaining a copy of the said
financial statements may write to the Company Secretary at the
Registered Office of your Company.
e) Management Discussion and Analysis:
The Management Discussion and Analysis forms an integral part of this
Report and gives detail of the overall industry overview, business
overview, performance review in Cable television business and broadband
business, key growth drivers, Opportunities and threats, risks and
concerns, internal control systems and its adequacy and Human Resource.
f) Dividend:
Considering the losses incurred during the year under review, your
Directors have not recommended any dividend for the financial year
under review.
g) Transfer to reserves:
In view of losses incurred during the year under review, your Directors
have not recommended transfer of any amount to reserves during the
financial year under review.
h) Revision of financial statement:
There was no revision of the financial statements for the year under
review.
i) Deposits:
Your Company has not accepted any public deposits during the year under
review within the meaning of Sections 73 and 74 of the Companies Act,
2013 read together with the Companies (Acceptance of Deposits) Rules,
2014.
h) Disclosures under section 134(3)(l) of the Companies Act, 2013:
Except as disclosed elsewhere in this report, no material changes and
commitments which could affect the Company''s financial position have
occurred between the end of the financial year of the Company and date
of this report.
i) Disclosure of Internal Financial controls:
The Company''s internal controls are commensurate with its size and the
nature of its operations. These have been designed to provide
reasonable assurance with regard to recording and providing reliable
financial and operational information, complying with applicable
statutes, safeguarding assets from unauthorised use, executing
transactions with proper authorisation and ensuring compliance of
corporate policies. The Company has a well-defined delegation of power
with authority limits for approving revenue as well as expenditure. It
uses a state-of-the-art enterprise resource planning (ERP) system to
record data for accounting and management information purposes and
connects to different locations for efficient exchange of information.
It has continued its efforts to align all its processes and controls
with global best practices.
In continuation of Company''s plan for implementation of internal
financial control during Phase II, the management had appointed an
external consultant and formed an Internal Team to document and
evaluate the design, adequacy and operating effectiveness of the
Internal Financial Controls of the Company. Entity Level Control
framework document has been documented. The documentation of process
maps and key controls has been completed for all material operating
processes. Further, during financial year 2015- 16, management testing
has been conducted on a sample basis for all key processes and remedial
action has been taken or agreed upon with a finite closure date where
control weaknesses were identified. The Management Audit Team (MAT) has
also conducted a review of the Internal Financial Controls and remedial
action has been taken or agreed upon with a finite closure date where
in control weaknesses were identified.
There is no material financial controls related observations
outstanding as at March 31, 2016.
Based on the above, the management believes that adequate Internal
Financial Controls exist in relation to its Financial Statements.
j) Particulars of loans, guarantees, investments and securities:
The Company being engaged in the business of providing infrastructure
facilities, the provisions of Section 186 of the Companies Act, 2013
are not applicable and accordingly, disclosure of details with respect
to investment made, loan given, guarantee given and security made
during the Financial Year 2015-16 in terms of Section 186(4) of the Act
is not applicable.
2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Mr. Brahmal Vasudevan (DIN 00242016), Independent Director of the
Company resigned from the Board w.e.f January 13, 2016.
In accordance with the provisions of the Companies Act, 2013, none of
the Independent Directors is liable to retire by rotation.
As per the provisions of Section 152 of the Companies Act, 2013, Mr.
Rajan Raheja (DIN: 00037480), shall retire by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for
re-appointment. Your Directors recommend the same for your approval.
Mr. Ganapathy Subramaniam resigned from the Board as Chief Financial
Officer w.e.f 12th February, 2016 and Mr. Vineet Garg succeeded him as
Chief Financial Officer with immediate effect i.e. w.e.f 12th February,
2016.
b. DECLARATIONS BY INDEPENDENT DIRECTORS:
Your Company has received declarations from all the Independent
Directors under Section 149(6) of the Companies Act, 2013 confirming
their independence vis- a-vis the Company.
3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
A. BOARD MEETINGS:
The Board of Directors met 6 times during the financial year ended 31st
March, 2016 in accordance with the provisions of the Companies Act,
2013 and rules made thereunder.
The dates on which the Board of Directors met during the financial year
under review are as under:
Sr.
No. Date of the Board Meeting
1 29th May, 2015
2 11th August, 2015
3 15th October, 2015
4 6th November, 2015
5 26th November, 2015
6 12th February, 2016
b. DIRECTOR''S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act, 2013, in relation to
the audited financial statements of the Company for the year ended 31st
March, 2016, the Board of Directors hereby confirm that:
a. in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
b. such accounting policies have been selected and applied
consistently and the Directors 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 as at 31st March, 2016 and of the loss of the
Company for that year;
c. proper and sufficient care was taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going
concern basis;
e. internal financial controls have been laid down to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively.
f. proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively;
c. NOMINATION AND REMUNERATION COMMITTEE:
Consequent upon resignation of Mr. Brahmal Vasudevan from the Board
w.e.f 13th January, 2016, the Nomination and Remuneration Committee was
reconstituted by the Board of Directors of the Company in accordance
with the requirements of Section 178 of the Act.
The composition of the Reconstituted committee is as under:
Sr.
No. Name of the Member Designation
1 Mr. Sasha Mirchandani Chairman
2 Mr. Viren Raheja Member
3 Mr. Akshay Raheja Member
4 Mr. Sridhar Gorthi Member
5 Mr. Devendra Shrotri Member
The Board of Directorshas in accordance with the provisions of
sub-section (3) of Section 178 of the Companies Act, 2013, formulated
the policy setting out the criteria for determining credentials,
positive attributes, independence of a Director and policy relating to
remuneration for Directors, Key Managerial Personnel and other
employees.
d. AUDIT COMMITTEE:
Consequent upon resignation of Mr. Brahmal Vasudevan from the Board
w.e.f 13th January, 2016, the Audit Committee was reconstituted
pursuant to the provisions of Section 177 of the Companies Act, 2013.
The composition of the Audit Committee is in conformity with the
provisions of the said section. The Reconstituted Audit Committee
comprises of:
Sr.
No. Name of the Member Designation
1 Mr. Sridhar Gorthi Chairman
2 Mr. Viren Raheja Member
3 Mr. Sasha Mirchandani Member
4 Mr. Devendra Shrotri Member
5 Ms. Ameeta Parpia Member
The scope and terms of reference of the Audit Committee are in
accordance with section 177 of the Companies Act, 2013, Audit Charter
adopted by the Board of Directors in their meeting held on 11th
February, 2015 and the applicable provisions of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
During the year under review, the Board of Directors of the Company had
accepted all the recommendations of the Committee.
e. STAKEHOLDERS RELATIONSHIP COMMITTEE:
Pursuant to Section 178 of the Companies Act, 2013, the Board of
Directors of the Company has reconstituted the Stakeholder''s
Relationship Committee, comprising of:
Sr.
No. Name of the Member Designation
1 Mr. Vinayak Aggarwal Chairman
2 Mr. Viren Raheja Member
3 Mr. Jagdishkumar G. Pillai Member
The Company Secretary acts as the Secretary of the Stakeholders''
Relationship Committee.
f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
The Board of Directors of Company has pursuant to the provisions of
Section 178(9) of the Companies Act, 2013 read with Rule 7 of the
Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil
Mechanism Policy" for Directors and employees of the Company to provide
a mechanism which ensures adequate safeguards to employees and
Directors from any victimization on raising of concerns of any
violations of legal or regulatory requirements, incorrect or
misrepresentation of any, financial statements and reports, etc.
The employees of the Company have the right/option to report their
concern/grievance to the Chairman of the Audit Committee.
Your Company is committed to adhere to the highest standards of
ethical, moral and legal conduct of business operations.
g. RISK MANAGEMENT POLICY:
The Board of Directors of the Company has designed Risk Management
Policy and Guidelines to avoid events, situations or circumstances
which may lead to negative consequences on the Company''s businesses and
define a structured approach to manage uncertainty and to make use of
these in their decision making pertaining to all business divisions and
corporate functions. Key business risks and their mitigation are
considered in the annual/strategic business plans and in periodic
management reviews.
h. CORPORATE SOCIAL RESPONSIBILITY POLICY:
As per the provisions of Section 135 of the Companies Act, 2013read
with Companies (Corporate Social Responsibility Policy) Rules, 2014 and
any amendment thereof, the Board of Directors has constituted a
Corporate Social Responsibility (CSR) Committee as under:
Sr.
No. Name of the Member Designation
1 Mr. Devendra Shrotri Chairman
2 Mr. Jagdishkumar G. Pillai Member
3 Mr. Vinayak Aggarwal Member
The Board of Directors of the Company has approved CSR Policy based on
the recommendation of the CSR Committee. Since the Company has no
profits in preceding 3 financial years, no amount was required to be
spent for corporate social responsibility activities.
The CSR Policy of the Company is available on the Company''s website and
can be accessed in the link provided herein below:
http://www.hathway.com/assets/InvFile/HCDL_CSR_ Policy.pdf
i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:
The performance of the Board of Directors and its Committees,
individual Directors was evaluated in the meeting of the Board of
Directors held on 12th February, 2016 and the same was recorded as
satisfactory.
j. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND
OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT &
REMUNERATION) RULES, 2014:
The ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial year
under review and Statement containing the particulars of employees in
accordance with Rule 5 (2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure
- II.
4. AUDITORS AND REPORTS
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED
31ST MARCH, 2016:
The observations made by the Statutory Auditors in their report for the
financial year ended 31st March 2016 read with the explanatory notes
therein are self-explanatory and therefore, do not call for any further
explanation or comments from the Board under Section 134(3) of the
Companies Act, 2013.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2016:
Provisions of Section 204 read with Section 134(3) of the Companies
Act, 2013, mandates to obtain Secretarial Audit Report from Practicing
Company Secretary. M/s. Rathi and Associates, Company Secretaries had
been appointed to issue Secretarial Audit Report for the financial year
2015-16.
Secretarial Audit Report issued by M/s. Rathi and Associates, Company
Secretaries in Form MR-3 for the financial year 2015-16 forms part to
this report and the same is attached as Annexure - III.
In Secretarial Audit Report, M/s. Rathi and Associates quoted the
following observation:
Pursuant to Regulation 29 of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015,
the Company has not given the prior intimation to the Stock
Exchanges(s) for convening the Board Meeting on 12th February, 2016.
However, the Company has filed a letter dated 2nd March, 2016 with the
stock exchanges requesting for taking a lenient and sympathetic view of
the said omission.
In this regard, the Board of Directors would like to state that said
intimation was duly prepared and signed by the Company Secretary of the
Company. However, the said intimation could not be sent to the exchange
due to oversight on the part of the concerned staff. The said omission
in sending of the intimation to the exchange was purely unintentional
and occurred inadvertently.
c. RATIFICATION OF APPOINTMENT OF AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, 2014, M/s. G. M. Kapadia
& Co, Chartered Accountants, the Statutory Auditors of the Company have
been appointed for a term of 3 years. However, their appointment as
Statutory Auditors of the Company shall be required to be ratified by
the members at the ensuing Annual General Meeting. The Company has
received a confirmation from the said Auditors that they are not
disqualified to act as the Auditors and are eligible to hold the office
as Auditors of the Company.
Necessary resolution for ratification of appointment of the said
Auditors is included in the Notice of AGM for seeking approval of
members.
d. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act, 2013
read with Notifications/Circulars issued by the Ministry of Corporate
Affairs from time to time and as per the recommendation of the Audit
Committee, the Board of Directors at their meeting held on 26th May,
2016, appointed M/s. Ashok Agarwal & Co, Cost Accountants, as the Cost
Auditors of the Company for the financial year 2016- 2017. The
remuneration proposed to be paid to the Cost Auditor, subject to the
ratification by the members at the ensuing Annual General Meeting would
not be exceeding '' 5,75,000/- (Rupees Five Lakh Seventy Five Thousand
only) plus reimbursement of out of pocket expenses, if any. The Cost
Audit Report will be filed within the stipulated period of 180 days
from the closure of the financial year.
5. OTHER DISCLOSURES
Other disclosures as per provisions of Section 134 of the Companies
Act, 2013 read with Companies (Accounts) Rules, 2014 are furnished as
under:
a. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act,
2013, extract of the Annual Return for the financial year ended 31st
March, 2016 made under the provisions of Section 92(3) of the Act is
attached as Annexure - IV which forms part of this Report.
b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo etc. are furnished in
Annexure - V which forms part of this Report.
c. RELATED PARTY TRANSACTIONS:
During the financial year 2015-16, your Company has entered into
transactions with related parties as defined under Section 2(76) of the
Companies Act, 2013 read with Companies (Specification of Definitions
Details) Rules, 2014 and any amendment thereof, which were in the
ordinary course of business and on arms'' length basis and in accordance
with the provisions of the Companies Act, 2013, Rules issued thereunder
and Regulation 34(3) and 53(f) and Schedule V of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. During the
financial year 2015-16, there were no transactions with related parties
which qualify as material transactions under the applicable provisions
of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
d. CORPORATE GOVERNANCE: (Applicable to Companies giving remuneration
as per Section II of Schedule V):
All elements of remuneration Rs. 227.45 Lacs
package such as salary, benefits,
bonuses, stock options, pension,
etc., of all the directors (Applicable
only in case of Managing
Director)
Details of fixed component and Rs. 202.45 Lacs
performance linked incentives (Fixed)
along with the performance criteria
Rs. 25 Lacs
(Variable)
Service contracts, notice period, -
severance fees
Stock option details, if any, and -
whether the same has been issued at
a discount as well as the period over
which accrued and over which exercisable
6. GENERAL:
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. I ssue of equity shares with differential rights as to dividend,
voting or otherwise as per provisions of Section 43(a)(ii) of the Act
read with Rule 4(4) of the Companies (Share Capital and Debenture)
Rules, 2014.
3. I ssue of sweat equity shares to employees of the Company as per
provisions of Section 54(1 )(d) of the Act read with Rule 8(13) of the
Companies (Share Capital and Debenture) Rules, 2014.
4. Issue of equity shares under Employees Stock Option Scheme during
the year under review and hence no information as per provisions of
Section 62(1 )(b) of the Act read with Rule 12(9) of the Companies
(Share Capital and Debenture) Rules, 2014.
5. Instances of exercising of voting rights in respect of shares
purchased directly by employees under a scheme pursuant to Section
67(3) of the Act read with Rule 16(4) of Companies (Share Capital and
Debentures) Rules, 2014
6. Payment of remuneration or commission from any of its Holding or
subsidiary Companies to the Managing Director or the Whole-time
Directors of the Company.
7. Significant or material orders passed by the Regulators or Courts
or Tribunals which impact the going concern status and Company''s
operations in future.
8. Cases filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
9. There were no frauds reported by the Auditor of the Company
pursuant to sub-section 12 of Section 143 of the Companies Act, 2013.
7. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to thank the customers,
shareholders, suppliers, bankers, business partners/associates,
financial institutions and Central and State Governments for their
consistent support and encouragement to the Company.
For and on behalf of the Board
Jagdishkumar G. Pillai Vinayak Aggarwal
Managing Director & CEO Director
DIN 00036481 DIN 00007280
Date: 26/05/2016
Place: Mumbai
Registered Office
Rahejas, 4th Floor, Corner of Main Avenue & V. P. Road,
Santacruz West, Mumbai 400054
CIN: L64204MH1959PLC011421
Tel No. 022-26001306 Fax No. 022-26001307
Mail:[email protected] website: www.hathway.com
Mar 31, 2014
Dear Members,
We hereby present the Fifty Fourth Annual Report to the Members
together with the Audited Statement of Accounts for the Financial Year
ended March 31, 2014.
FINANCIAL HIGHLIGHTS
(Rs. In Crores)
Consolidated Standalone
Particulars 2013-14 2012-13 2013-14 2012-13
Operating & Other
Income 1,593.75 1,148.19 988.14 667.95
Earnings before
interest, depreciation,
amortisation & taxes 311.90 289.51 191.28 182.18
Interest 134.51 60.17 92.52 46.14
Depreciation &
Amortisation 291.24 162.25 202.29 118.91
Impairment of Tangible
/ Intangible Assets 8.05 3.81 8.07 3.83
Exceptional Items - 7.93 10.60 9.34
Minority Interest (8.79) 24.94 - -
Prior period expenses/
(income) 2.57 (0.14) 3.05 0.76
(Profit)/Loss Share
of Associates 0.01 (0.08) - -
Amount transferred on
change in stake in
Subsidiaries/Joint
Ventures (20.81) (2.97) - -
Excess/Short provision
for taxation in
earlier years (0.02) 0.07 - -
Provision for Taxation
- Current Tax
& Deferred Tax 16.25 17.83 - -
Net Profit/(Loss) (111.11) 15.70 (125.25) 3.20
Operational Overview:
During the year under review, the total income of your Company was Rs.
988.14 Crores on a standalone basis and Rs. 1,593.75 Crores on a
consolidated basis as compared to the previous financial year''s total
income of Rs. 667.95 Crores on a standalone basis and Rs. 1,148.19 Crores
on a consolidated basis. The net loss for the year under review, after
taxation and exceptional items, stood atRs. 125.25 Crores on a standalone
basis and Rs. 111.11 Crores on a consolidated basis.
(i) Cable TV Operations
As per Media Partners Asia (MPA) estimates, CATV Services reaches about
156 Million homes in India and is the primary means for television
distribution.
Digitalisation which was mandated by the Cable Television Network
Regulation (Amendment) Act, 2011, contemplated a phased roll out of
Digital Addressable System (DAS) which commenced in November 2012 and
shall be completed by December 2014. Cable TV continued to be the
primary means for distributing television services in a predominantly
urban landscape and selected DAS and Non-DAS cities.
During the year under review, your Company along with its subsidiaries
and joint venture companies rolled out DAS in 38 Phase II cities with
effect from April 01, 2013.
Your Company reaches a subscriber universe of nearly 11.5 Million homes
as on March 31, 2014. We have a pan India footprint that covers key
Hindi speaking markets in the West, North, East and Central India.
During the year, your Company further expanded the scope of its
operations in West Bengal and Uttar Pradesh.
Our DAS services are supported by 23 digital head-ends and more than
16,000 kilometers of HFC networks. We have also implemented state of
the art Conditional Access System (CAS), Oracle Billing and Revenue
Management System (OBRM) and partnered with a premier outsourced
Customer Care Centre service provider.
The Company is now well positioned to monetise its subscriber base
under mandatory digitisation.
(ii) Broadband Services
Our Broadband reach is about 1.8 Million homes where we can offer our
services. This makes us the largest Multi System Operator providing
such services in the Country. We are a Category -A Internet Service
Provider (ISP) and we cover both retail and corporate segments.
India has around 55.20 Million broadband subscribers as on December 31,
2013 (As per revised definition i.e. a customer having minimum speed of
512 kbps). Cable provides big potential for growth of broadband
penetration in the country considering the cable universe of 106
Million CATV homes.
As of March 31, 2014, Hathway has over 4 Lacs broadband subscribers,
which make us the largest MSO in the country having highest number of
Broadband Subscribers, with an all India rank of being the 5th largest
ISP Company in the country. With a high quality and high capacity HFC
Network, Hathway is well placed to garner a larger share of the growing
broadband market. Your Company successfully implemented DOCSIS 3.0
service in many cities for Broadband business and has received a good
response to the same especially in
South Mumbai. At present, we are providing 50 Mbps speed to our Docsis
3.0. customers and have the capacity to provide higher speed in future.
Utilisation of IPO Proceeds
During the financial year 2009-10, your Company had successfully
completed the Initial Public Offer of shares to the tune of Rs. 666
Crores, including Rs. 186 Crores as Offer for Sale. As regards the
utilisation of the IPO proceeds, the Company had obtained members
approval vide resolution passed by way of Postal Ballot on June 21,
2011 to authorise the Board of Directors of the Company to decide,
alter, vary, revise and finalise the utilisation of IPO proceeds apart
from the objects mentioned in the Prospectus. The details of
utilisation of issue proceeds to the extent of Rs. 480 Crores as on March
31, 2014 were placed before the members of Audit Committee at the
meeting dated May 29, 2014 and the same was taken on record by Board of
Directors of the Company.
Dividend
In view of the accumulated losses, your directors express their
inability to declare any dividend for the year under review.
Fixed Deposits
The Company has not accepted any deposits during the year, within the
meaning of Section 58A of the Companies Act, 1956 and the rules made
thereunder.
Preferential Allotment
During the year under review there were two tranches of preferential
allotments to promoters and foreign investors, pursuant to the
provisions of Section 81(1 A) of the Companies Act, 1956 and other
applicable legal provisions, including but not limited to Chapter VII
of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009 as amended (ICDR
Regulations).
Directors
Pursuant to the provisions of Section 152 of the Companies Act, 2013,
Mr. Rajan Raheja and Mr. Akshay Raheja, Directors would retire by
rotation at the ensuing Annual General Meeting. Being eligible, Mr.
Rajan Raheja and Mr. Akshay Raheja have offered themselves for
reappointment.
Pursuant to provisions of Section 149, Section 150, and Section 152
read with Schedule IV and other applicable provisions of the Companies
Act, 2013, Mr. Brahmal Vasudevan, Mr. Sridhar Gorthi, Mr. Sasha
Mirchandani and Mr. Devendra Shrotri are proposed to be appointed as
Independent Directors to hold office upto August 4, 2019 and their term
of appointment will not be liable to retirement by rotation.
A brief profile of the aforesaid Directors seeking appointment/
reappointment at the ensuing Annual General Meeting forms part of this
Directors'' Report.
Personnel
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars are given in the statement which
forms part of this report. In terms of provisions of Section 219(1
)(b)(iv) of the Companies Act, 1956, the Directors'' Report is being
sent to all the shareholders of the Company excluding the aforesaid
statement. The statement is available for inspection at the Registered
Office of the Company. Any shareholder interested in obtaining a copy
of the said statement may write to the Company Secretary at the
Registered Office of the Company.
Employees Stock Option Plan
The disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are given
in the Annexure to this report.
During the year under review, 29,700 options were exercised by the
option holders. The net options outstanding under the Employees Stock
Option Plan 2007 (Revised 2010) at the end of the year stood at
1,61,299 after lapse/forfeiture of 74,300 options.
Subsidiaries
The financial data of the subsidiaries has been furnished along with
the statement pursuant to Section 212 of the Companies Act, 1956
forming part of the Annual Report. Further, pursuant to relevant
accounting standards, the Company has presented the Consolidated
Financial Statements which include the financial information relating
to its subsidiaries and forms part of the Annual Report.
The Company shall provide the copy of the Annual report and other
related information of its subsidiary companies as required under
section 212 of the Companies Act, 1956 to the shareholders of the
Company and the subsidiaries upon their written request. These
documents will also be available for inspection at the Registered
Office of the Company and Registered Offices of the respective
Subsidiary Companies during the working hours up to the date of Annual
General Meeting.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Considering the nature of operations of the Company, your Directors
have nothing to state as regards the requirement of disclosures in
terms of Section 217(1) (e) of the Companies Act, 1956, pertaining to
the conservation of energy and technology absorption.
During the year under review, your Company has used foreign exchange
amounting to Rs. 312.08 Crores as compared to the last year''s expenditure
ofRs. 395.08 Crores.
Your Company has earned Foreign Exchange Income of Rs. 52.49 Crores
during the year under review as compared to the last year''s Foreign
Exchange Income of Rs. 6.44 Crores.
Directors'' Responsibilities Statement
Your Directors in compliance of Section 217 (2AA) of the Companies Act,
1956 confirm that in the preparation of the annual accounts for the
year ended March 31, 2014:
a) the applicable accounting standards has been followed along with
proper explanation relating to material departures, if any;
b) the Company has selected such accounting policies and applied them
consistently and made judgement and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on March 31, 2014 and the loss of the Company for the
year;
c) proper and sufficient care has been taken for the 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;
d) the annual accounts of the Company has been prepared on a going
concern basis.
Corporate Governance and Management Discussion and Analysis Report
A report on Corporate Governance along with a certificate from M/s.
Rathi & Associates, Practicing Company Secretaries, regarding
compliance of requirements of Corporate Governance pursuant to Clause
49 of the Listing Agreement with Stock Exchanges is annexed hereto and
forms part of this report. The Management Discussion and Analysis
Report on the operations of the Company as required under the Listing
Agreement with the Stock Exchanges is also annexed hereto and forms
part of this report.
Cost Auditors
Your Company has appointed Dr. Ashok Kumar Agarwal & Co., Cost
Accountant as Cost Auditor under section 148 of the Companies Act, 2013
for Cost Audit for the financial year 2014-2015.
Statutory Auditors
M/s. G. M. KapadiaS Co, Chartered Accountants, the Statutory Auditors,
shall retire at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. The retiring Auditors have
furnished certificate to the effect that their re-appointment, if made,
would be in accordance with the limit prescribed under section 139 and
section 141 of the Companies Act, 2013. Your Directors recommend their
re-appointment.
Comments on Auditors'' Report
Your auditors have made certain observations in the annexure to their
report pertaining to location wise particulars of Access Devices (para
(i)(a)) and the need to strengthen frequency and procedure for
verification of assets (para (i)(b)). During the year, the Company has
put in a new billing system in place which is at an advanced level of
implementation wherein the location wise CPE (Customer Premise
Equipment) will be tracked. The frequency and procedure of verification
of the Distribution equipment is being increased and improved in the
current year by our Internal Audit department which will include assets
under the control of the local cable operators. Discrepancies have
been dealt with in the accounts. However, the same is not expected to
have any material impact.
The auditors have also commented on internal controls pertaining to
strengthening the internal controls over documentation in certain areas
and revenue recognition (para(iv)). In view of the Phase I and II of
the digitisation having been implemented within a short interval, the
documentation with respect to the agreement with the local cable
operators and also identification/registration of the ultimate
subscriber is under progress and is expected to be completed in the
current year.
Acknowledgements
Your Directors take this opportunity to thank all the shareholders and
lenders for their continued support. Your Directors also wish to place
on record, the sincere appreciation to all the employees, franchisees,
distributors and the vendors for their excellent contribution towards
the progress of the Company.
FOR AND ON BEHALF OF THE BOARD
Place: Mumbai
Date: May 29, 2014 CHAIRMAN
Mar 31, 2013
Dear Members,
The hereby present the Fifty Third Annual Report to the Members
together with the Audited Statement of Accounts for the Financial Year
ended March 31, 2013.
Financial Highlights
(Rs. In Lacs)
Consolidated Standalone
Particulars 2012-13 2011-12 2012-13 2011-12
Operating & Other
Income 1,14,820 1,02,862 66,795 52,870
Earnings before
interest, 28,951 18,417 18,217 10,119
depreciation,
amortization & taxes
Interest 6,018 5,199 4,614 4,085
Depreciation &
Amortization 16,224 14,088 11,891 10,314
Impairment of Tangible/ 381 340 381 340
Intangible Assets
Exceptional Items 793 1,045 935 436
Minority Interest 2,493 1,021 - -
Prior period adjustments (14) 431 76 111
Profit/(Loss) share
of Associates (8) (12) - -
Amount transferred
on change (296) (311) - -
in stake in Subsidiaries
/Joint Ventures
Excess/Short provision for 7 57 - -
taxation in earlier years
Provision for Taxation
- Current 1,783 1,477 - -
Tax & Deferred Tax
Net Profit/(Loss) 1,5701 (4,918) 3201 (5,167)
Operations
During the year under review, the total income of your Company was Rs.
66,795 Lacs on a standalone basis and Rs. 1,14,820 Lacs on a
consolidated basis as compared to the previous financial year''s total
income of Rs. 52,870 Lacs on a standalone basis and Rs. 1,02,862 Lacs
on a consolidated basis. The net profit for the year under review,
after taxation and exceptional items, stood at Rs. 320 Lacs on a
standalone basis and Rs. 1,570 Lacs on a consolidated basis.
Utilization of IPO Proceeds
During the financial year 2009-10, your Company had successfully
completed the Initial Public Offering of shares to the tune of Rs. 666
Crores, including Rs. 186 Crores as Offer for Sale. As regards the
utilization of the IPO proceeds the Company had obtained members
approval vide Resolution passed by way of Postal Ballot on 21st June,
2011 to authorize the Board of Directors of the Company to decide,
alter, vary, revise and finalize the IPO proceeds apart from the
objects mentioned in the Prospectus. The details of utilization of
issue proceeds to the extent of Rs. 480 Crores as on 31st March, 2013
were placed before the members of Audit Committee at the meeting dated
May 29, 2013 and the same also has been taken on record by Board of
Directors of the Company.
Dividend
In view of the accumulated losses, your directors express their
inability to declare any dividend for the year under review.
Fixed Deposits
The Company has not accepted any deposits during the year, within the
meaning of Section 58A of the Companies Act 1956 and the rules made
thereunder.
Cable Distribution
Media Partners Asia (MPA) estimates that CATV Services reaches about
8.8 million homes in India and is the primary means for television
distribution (source MPA 2013). Currently as estimated Hathway reaches
nearly 10.5 million as on March 2013. This Cable TV Paying Universe is
expected to grow to over 106 million homes by 2020. Cable will also
continue to be the primary means for distributing television services
in a predominantly urban landscape. Digitalization that was mandated by
the Cable Television Network Regulation (Amendment) Act, 2011,
contemplates a phased roll out of Digital Addressable System (DAS)
commencing November 2012 to December 2014. Your Company stands to gain
as the economics of the Cable Television business is expected to
transform consequent to this mandate.
Your Company along with its subsidiary and joint venture companies
successfully rolled out DAS in the cities of Mumbai, Delhi and Kolkata.
The Second phase was in 38 phase II cities where the implementation of
DAS was with effect from 01st April, 2013. Your Company along with its
subsidiary and joint venture companies and its subsidiary companies
rolled out DAS in 26 cities forming part of its Phase II deadline.
Your Company is expected to reach a subscriber universe exceeding 10.5
million homes by the end of mandatory DAS. We have a pan India
footprint that covers key Hindi speaking markets in the West, North,
East and Central India. During the year your Company has increased its
stake to 100% in Hathway Bhaskar Multinet Private Limited. With this
acquisition its presence in Central India (Indore, Bhopal and Jaipur)
is considerably strengthened. During the year as a part of Phase II
your Company further expanded the scope of its operations in the South
(Hyderabad, Bangalore and Mysore). Your Company also established the
presence in key Northern cities such as Faridabad.
Our DAS services are supported by 20 digital head-ends and more than
16,000 kilometers of HFC networks. We have also implemented state of
the art Conditional Access System (CAS), subscriber management and
billing solution and partnered with a premier outsourced customer
contact centre service provider. In the past year as required by
Telecom Regulatory Authority of India (TRAI) the Company has also filed
its tariff plan/packages, entered into contractual arrangements with
most broadcasters and kept adequately stocked with STBs to meet the
requirements of the market.
The Company is now well positioned to monetize its subscriber base
under mandatory digitization.
Broadband Services
Our Broadband service reaches a universe of about 1.5 million homes.
This makes us among the larger MSOs providing such services in the
country. We are a Category-A Internet Service Provider (ISP) and we
cover both retail and corporate segments.
India has around 14.98 million broadband subscribers as on 31st
December 2012. Broadband has registered a quarterly growth of 2.02% and
a year-on-year growth of 12.22% (Source - TRAI Report, May 2013). Cable
modem subscribers'' accounts for only 5.24% that is only 9.6 million
internet subscribers. Cable provides big potential for growth of
broadband penetration in the country considering the cable universe of
106 million CATV homes.
As of 31st March 2013, Hathway had about 4,16,000 broadband
subscribers, with an all India rank of being the 5th largest ISP
Company in the country. With a high quality & high capacity network,
Hathway is well placed to garner a larger share of the growing
broadband market.
Directors
During the period following the date of last year''s report and the
date of this report, Mr. Bharat Shah, Chairman and Mr. K. Jayaraman,
Managing Director & CEO ceased to be directors of the Company. Your
Directors place on record their appreciation on the valuable services
rendered by Mr. Bharat Shah and Mr. K. Jayaraman and the guidance
received from them.
Mr. Jagdishkumar G. Pillai was appointed as an additional director and
also Managing Director & CEO of the Company with effect from 21st
December, 2012. The Company has received the notice along with
requisite deposit, from a member of the Company pursuant to Section 257
of the Companies Act, 1956 proposing the candidature of Mr.
Jagdishkumar G. Pillai for the office of Director of the Company. He
shall continue to assume the office of Managing Director & CEO once
appointed as a director of the Company. His appointment and the
remuneration payable to him were approved by the shareholders through
postal ballot on 25th February 2013.
Pursuant to the provisions of Section 255 read with Section 256 of the
Companies Act, 1956, Mr. Vinayak Aggarwal, Mr. Sridhar Gorthi and Mr.
Devendra Shrotri, Directors would retire by rotation at the ensuing
Annual General Meeting. Being eligible, Mr. Vinayak Aggarwal, Mr.
Sridhar Gorthi and Mr. Devendra Shrotri have offered themselves for
reappointments.
As required, the requisite details of Directors seeking re- appointment
are included in this Annual Report.
Personnel
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars are given in the statement which
forms part of this report. In terms of provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report is
being sent to all the shareholders of the Company excluding the
aforesaid statement. The statement is available for inspection at the
Registered Office of the Company. Any shareholder interested in
obtaining a copy of the said statement may write to the Company
Secretary at the Registered Office of the Company.
Employees Stock Option Plan
The disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are given
in the Annexure to this report.
During the year under review 3,16,100 options were exercised by the
option holders. The net options outstanding under the Employees Stock
Option Plan 2007 (Revised 2010) at the end of the year stood at
2,65,299 after lapse/forfeiture of 38,800 options.
Subsidiaries
The financial data of the subsidiaries has been furnished along with
the statement pursuant to Section 212 of the Companies Act, 1956
forming part of the Annual Report. Further, pursuant to relevant
Accounting Standards, the Company has presented the Consolidated
Financial Statements which include the financial information relating
to its subsidiaries and forms part of the Annual Report.
The Company shall provide the copy of the Annual report and other
related information of its subsidiary companies as required under
section 212 of the Companies Act, 1956 to the shareholders of the
Company and the subsidiaries upon their written request. These
documents will also be available for inspection at the registered
office of the Company and registered offices of the respective
subsidiary Companies during the working hours up to the date of Annual
General Meeting.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Considering the nature of operations of the Company, your Directors
have nothing to state as regards the requirement of disclosures in
terms of Section 217(1) (e) of the Companies Act, 1956, pertaining to
the conservation of energy and technology absorption.
During the year under review, your Company has used foreign exchange
amounting to Rs. 39,392 Lacs as compared to the last year''s Rs.
14,501 Lacs.
Your Company has earned Foreign Exchange Income of Rs. 644 Lacs during
the year under review whereas there was no Foreign Exchange Income
earned during last year.
Directors'' Responsibilities Statement
Your Directors in compliance of Section 217 (2AA) of the Companies Act,
1956 confirm that in the preparation of the annual accounts for the
year ended March 31, 2013:
a) the applicable accounting standards had been followed along with
proper explanation relating to material departures, if any;
b) the Company has selected such accounting policies and applied them
consistently and made judgement and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on March 31, 2013 and the profit of the Company for the
year;
c) proper and sufficient care has been taken for the 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;
d) the annual accounts of the Company has been prepared on a going
concern basis.
Corporate Governance & Management Discussion and Analysis Report
A report on Corporate Governance along with a certificate from M/s.
Rathi & Associates, Practicing Company Secretaries, regarding
compliance of requirements of Corporate Governance pursuant to Clause
49 of the Listing Agreement with Stock Exchanges is annexed hereto and
forms part of this report. The Management Discussion and Analysis
Report on the operations of the Company as required under the Listing
Agreement with the Stock Exchanges is also annexed hereto and forms
part of this report.
Cost Auditors
Your Company has re-appointed Dr. Ashok Kumar Agarwal, Cost Accountant
as Cost Auditor under section 233B of the Companies Act, 1956 for Cost
Audit for the financial year 2013-2014.
Statutory Auditors
M/s. G. M. Kapadia & Co, Chartered Accountants, the Statutory Auditors,
shall retire at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. The retiring Auditors have
furnished certificate to the effect that their re-appointment, if made,
would be in accordance with the limit prescribed under section 224(1B)
of the Companies Act, 1956.Your Directors recommend their
re-appointment.
Comments on Auditors'' Report
Your auditors have made certain observations in the annexure to their
report pertaining to location wise particulars of Access Devices (para
(i) (a)) and the need to strengthen frequency and procedure for
verification of assets (para (i) (b)). The Company had initiated a
process for verification and identified discrepancies at an overall
companywide level as location-wise reconciliation was not expected to
have material impact. Discrepancies have been dealt with in the
accounts. The auditors have also commented on internal controls
pertaining to identification/ registration of ultimate subscribers
(para (iv)). The Company is in the process of updating it''s
subscriber database as mandated by the DAS regulations and expects to
move to retail billing to end consumers in the course of the current
financial year. This is as per the requirement and deadlines laid down
by government from time to time.
Acknowledgements
Your Directors take this opportunity to thank all the shareholders and
lenders for their continued support. Your Directors also wish to place
on record, the sincere appreciation to all the employees, franchisees,
distributors and the vendors for their excellent contribution towards
the progress of the Company.
FOR AND ON BEHALF OF THE BOARD
CHAIRMAN
Place: Mumbai
Date: May 29, 2013
Mar 31, 2012
The hereby present the Fifty Second Annual Report to the Members
together with the Audited Statement of Accounts for the Financial Year
ended March 31, 2012.
Financial Highlights
(Rs. In Lacs)
Consolidated Standalone
Particulars 2011-12 2010-11 2011Ã12 2010Ã11
Operating & Other 1,02,862 90,817 52,870 49,612
Income
Earnings before 18,414 17,557 10,119 11,220
interest, depreciation,
amortization & taxes
Interest 5,196 4,523 4,085 3,864
Depreciation & 14,088 12,488 10,314 9,464
Amortization
Impairment of Tangible 340 270 340 270
/ Intangible Assets
Exceptional Items 1,045 1,435 436 1,439
[Provision for
doubtful advances/
investments/
receivables/
impairment and write
off of assets in respect
of operations in Tamil
Nadu/Sundry balance
written-back for Tamil
Nadu / expenses on
introduction of Digital
Addressable System
(DAS)]
Minority Interest 1,021 705 -- --
Prior period 431 232 111 215
adjustments
Profit Share of (12) (6) -- --
Associates
Amount transferred (311) (79) -- --
on change in stake
in Subsidiaries/Joint
Ventures
Adjustment on Account - (150) -- --
of Non Consolidation
of Subsidiaries
Excess/Short provision 57 61 -- --
for taxation in earlier
years
Provision for Taxation 1,477 1,205 -- --
- Current Tax &
Deferred Tax
Net Loss (4,918) (3,127) (5,167) (4,032)
Operations
During the year under review, the total income of your Company was Rs.
52,870 Lacs on a standalone basis and Rs. 1,02,862 Lacs on a
consolidated basis as compared to the previous financial year's total
income of Rs. 49,612 Lacs on a standalone basis and Rs. 90,817 Lacs on
a consolidated basis. The Net Loss for the year under review, after
taxation and Exceptional Items, stood at Rs. 5,167 Lacs on a standalone
basis and Rs. 4,918 Lacs on a consolidated basis.
Utilisation of IPO Proceeds
During the financial year 2009-10, your Company had successfully
completed the Initial Public Offering of shares to the tune of Rs. 666
Crores, including Rs. 186 Crores as Offer for Sale. As regards to the
utilization of the IPO proceeds the Company had obtained members
approval vide Resolution passed by way of Postal Ballot on 21st June,
2011 to authorise the Board of Directors of the Company to decide,
alter, vary, revise and finalise the IPO proceeds apart from the objects
mentioned in the Prospectus. The details of utilisation of issue
proceeds to the extent of Rs. 406.15 Crores as on 31st March, 2012
were placed before the members of Audit Committee at the meeting dated
May 11, 2012 and the same also has been taken on record by Board of
Directors of the Company.
Dividend
In view of loss incurred during the year under review and the
accumulated losses, your directors express their inability to recommend
any dividend for the year under review.
Fixed Deposits
The Company has not accepted any deposits during the year, within the
meaning of Section 58A of the Companies Act 1956 and the rules made
thereunder.
Cable Distribution
During the year under review the Telecom Regulatory Authorities of
India (TRAI) recommended a digitalization plan to the Ministry of
Information & Broadcasting (MIB) that involves introduction of digital
cable services across India. The MIB has since notified the
implementation of Digital Addressable System( DAS) throughout the
country in four phases, commencing from November 2012 and completion by
the year 2014. Your Company and its subsidiaries and joint ventures
stand to immensely benefit from the introduction of DAS, by way of
higher revenues & technological leap. During the year the company
successfully commisioned the High Definition (HD) services in the four
major cities of Mumbai, Bengaluru, Delhi & Hyderabad. We offer anywhere
between 10 to 20 HD services and the quality of the service has been
widely acclaimed. As on date your Company is nearing about 10,000 HD
customers and the progress is good, considering that we do not
subsidise the HD service.
The DAS plan is meant to improve consumer viewing experience in terms
of number of Channels, providing digital quality to the consumers as
against current analogue picture quality, to curb the revenue leakage
at various level and ultimately to increase transparency in reporting
numbers. In the last financial year Company had introduced HD, HD
Broadband services in major cities of India to provide a scintillating
viewer experience and Hathway Music à a channel which plays Bollywood
music. We are planning to implement additional services like
Video-on-Demand (VOD), Pay-per-View (PPV), Games- on-Demand, etc. to
more effectively compete with Direct to Home (DTH) and Internet
Protocol Television (IPTV).
As per the report of Media Partners Associates (MPA) 2012, out of 254.6
million homes in India, 154.8 million homes have TV set, with 60.8%
Cable TV (CATV) penetration. As per the MIB directives the entire
analogue networks throughout the country needs to be converted to the
DAS. Larger number of channels, better picture quality, choice of
audio and other value added services are expected to be key drivers of
digital cable in the country. Multi System Operators (MSO) rolling out
DAS are better placed to counter DTH players, with key strengths like
affordable pricing, prompt customer support, niche local content and
local area offices for consumer interface will help them to grow faster
on the digital platform.
Hathway and its subsidiaries/joint ventures have reach of approximately
9 million Cable TV homes for its analogue CATV services. We have
slightly in excess of 15,000 kilometers of hybrid fiber optic cable
which is spread over 140 Cities and Towns. Hathway has commenced a
rapid digitalization process and at present we have deployed close to
2.1 million digital set top boxes in the universe of cable homes that
we serve as at 31 March, 2012. It has established 20 digital head-ends
across the country.
As one of the largest integrated service provider in the country we
have the advantage of offering much more value addition to the
customers by bringing in a cheaper but combined product of digital
video, HD services and broadband. To this effect your Company has
launched such services in select markets across the country and has
received appreciation from the customers.
Broadband Services
India has around 13.81 million broadband subscribers as on 31st March
2012. Broadband has registered a quarterly growth of 3.44% and a
year-on-year growth of 16.18% (Source à TRAI Report, August 2012).
Cable modem subscribers' accounts for only 3.59% that is only 0.82
million internet subscribers. Cable provides big potential for growth
of broadband penetration in the country considering the cable universe
of 93.7 million CATV homes.
Hathway is the largest MSO offering broadband services in 20 cities.
Hathway is Category "A" Internet Service Provider (ISP) providing
broadband services to retail and corporate segments in various states.
Hathway has 1.5 million homes ready for catering for internet services.
As of 31st March 2012, Hathway had about 4,00,000 broadband
subscribers, with an all India rank of being the 6th largest ISP
Company in the country. With a high quality & high capacity network,
Hathway is well placed to garner a larger share of the growing
broadband market.
Directors
During the financial year under review, Mr. Uday Shankar and Mr. Hursh
Shrivastava, Directors resigned from the Board of your Company. Your
Directors place on record their appreciation on the valuable services
rendered by Mr. Uday Shankar and Mr. Hursh Shrivastava and the guidance
received from them during their tenure as the Directors. Mr. Biswajit
Subramanian was appointed as an additional director on the Board of
Directors of your Company with effect from 11th May 2012. The Company
has received the notice along with requisite deposit, from a member of
the Company pursuant to Section 257 of the Companies Act, 1956
proposing the candidature of Mr. Biswajit Subramanian for the office of
Director of the Company.
Pursuant to the provisions of Section 255 read with Section 256 of the
Companies Act, 1956, Mr. Bharat Shah and Mr. Sasha Mirchandani,
Directors would retire by rotation at the ensuing Annual General
Meeting. Being eligible, Mr. Sasha Mirchandani has offered himself for
reappointment. Mr. Bharat Shah has expressed his desire not to offer
himself for re-appointment, due to his other pre-occupations. Your
Directors place on record their appreciation on the valuable services
rendered by Mr. Bharat Shah during his tenure as a Director.
As required, the requisite details of Directors seeking
appointment/re-appointment are included in this Annual Report.
Personnel
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars are given in the statement which
forms part of this report. In terms of provisions of Section 219(1) (b)
(iv) of the Companies Act, 1956, the Directors' Report is being sent to
all the shareholders of the Company excluding the aforesaid statement.
The statement is available for inspection at the Registered Office of
the Company. Any shareholder interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office of
the Company.
Employees Stock Option Plan
The disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999, are given in the Annexure to this
report.
The options outstanding under the Employees Stock Option Plan 2007
(Revised 2010) at the end of the year stood at 6,20,199 after
lapse/forfeiture of 1,49,800 options.
Subsidiaries
The financial data of the subsidiaries has been furnished along with the
statement pursuant to Section 212 of the Companies Act, 1956 forming
part of the Annual Report. Further, pursuant to Accounting Standards
issued by the Institute of Chartered Accountants of India, the Company
has presented the Consolidated Financial Statements which include the
financial information relating to its subsidiaries and forms part of the
Annual Report.
The Company shall provide the copy of the Annual report and other
related information of its subsidiary companies as required under
section 212 of the Companies Act, 1956 to the shareholders of the
Company and the subsidiaries upon their written request. These
documents will also be available for inspection at the registered office
of the Company and registered offices of the respective subsidiary
Companies during the working hours up to the date of Annual General
Meeting.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Considering the nature of operations of the Company, your Directors
have nothing to state as regards the requirement of disclosures in
terms of Section 217(1) (e) of the Companies Act, 1956, pertaining to
the conservation of energy and technology absorption.
During the year under review, your Company has incurred a total
expenditure on foreign exchange amounting to Rs. 271 Lacs as compared
to the last year's expenditure of Rs. 317 Lacs.
Like last year, your Company has not earned any Foreign Exchange Income
during the year under review.
Directors' Responsibilities Statement
Your Directors in compliance of Section 217 (2AA) of the Companies Act,
1956 confirm that in the preparation of the annual accounts for the year
ended March 31, 2012:
a) the applicable accounting standards had been followed along with
proper explanation relating to material departures, if any;
b) the Company has selected such accounting policies and applied them
consistently and made judgement and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on March 31, 2012 and the loss of the Company for the
year;
c) proper and sufficient care has been taken for the 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;
d) the annual accounts of the Company has been prepared on a going
concern basis.
Corporate Governance & Management Discussion and Analysis Report
A report on Corporate Governance along with a certificate from M/s.
Rathi & Associates, Practicing Company Secretaries, regarding
compliance of requirements of Corporate Governance pursuant to Clause
49 of the Listing Agreement with Stock Exchanges is annexed hereto and
forms part of this report. The Management Discussion and Analysis
Report on the operations of the Company as required under the Listing
Agreement with the Stock Exchanges is also annexed hereto and forms
part of this report.
Auditors
M/s. G. M. Kapadia & Co, Chartered Accountants, the Statutory Auditors,
shall retire at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. The retiring Auditors have
furnished certificate to the effect that their re-appointment, if made,
would be in accordance with the limit prescribed under section 224(1B)
of the Companies Act, 1956.Your Directors recommend their
re-appointment.
Comments on Auditors' Report
Your auditors have made certain observations in the annexure (i) (a)
and (b) pertaining to the non-updation of location wise particulars
with respect to Access Devices with subscribers / local cable operators
and frequency and procedure for verification of equipment with local
cable operators. The Company has initiated a process of physical
verification and updation of fixed asset records. The Company does not
anticipate any material impact consequent to such reconciliation of
records.
Acknowledgements
Your Directors take this opportunity to thank all the shareholders and
lenders for their continued support. Your Directors also wish to place
on record, the sincere appreciation to all the employees, franchisees,
distributors and the vendors for their excellent contribution towards
the progress of the Company.
FOR AND ON BEHALF OF THE BOARD
CHAIRMAN
Place: Mumbai
Date : August 21, 2012
Mar 31, 2011
Dear Members,
We hereby present the Fifty First Annual Report to the Members together
with the Audited Statement of Accounts for the Financial Year ended
March 31, 2011.
Financial Highlights
(Rs. In Lacs)
Consolidated Standalone
Particulars 2010-11 2009-10 2010-11 2009-10
Operating & Other 90,667.94 73,998.18 49,496.08 40,676.20
Income
Gross Operating 17,384.57 13,224.62 11,104.73 7,421.62
Profit before
interest,
depreciation,
amortization & taxes
Interest 4,498.231 5,562.021 3,863.771 5,090.971
Loss/(Gain) on (148.65) (59.72) (115.56) (51.96)
Foreign Exchange
Fluctuations
Depreciation & 12,488.40 11,112.36 9,463.74 8,861.53
Amortization
Impairment of 270.30 176.77 270.30 176.77
Tangible/Intangible
Assets
Exceptional Items 1,434.80 1,488.61 1,438.89 1,632.70
(Provision for
doubtful advances/
investments/
receivables from
entities under
control or significant
influence/ impairment
and write off of
assets in respect of
operations in Tamil
Nadu/ depreciation
written back)
Provision for Taxation 1,204.36 1,562.07 - -
- Current Tax &
Deferred Tax
Net Loss (2,362.88) (6,617.49) (3,816.42) (8,288.40)
Cumulative Loss (49,353.17) (46,226.48) (49,945.24) (45,914.02)
carried to Balance
Sheet after
adjustments
Operations
During the year under review, the total income of your Company was Rs.
49,496.08 Lacs on standalone basis and Rs. 90,667.94 Lacs on
consolidated basis as compared to the last year's total income of Rs.
40,676.20 Lacs on standalone basis and Rs. 73,998.18 Lacs on
Consolidated basis respectively. The Net Loss after taxation and
Exceptional Items has come down and stood at Rs. 3,816.42 Lacs on
standalone basis and Rs. 2,362.88 Lacs on consolidated basis.
Variation in utilization of fund raised through Initial Public Offer
Out of the total amount raised through the Initial Public Offer (IPO)
of the Company, Rs. 28,760.48 Lacs have been utilized as of March 31,
2011 in accordance with the objects set out in the Objects of the
Issue' section in the Prospectus for Initial Public Offer of the
Company. During the Financial Year 2010-11 the Telecom Regulatory
Authorities of India (TRAI) had recommended to the Ministry of
Information & Broadcasting the digitalization plan that involves
introduction of digital cable services across India. Considering the
change in business environment, it was thought appropriate to pursue
digitalization more aggressively than hitherto planned in our original
Objects of the Issue and to reduce the debts by way of repayment of
certain high cost debts.
In view of the above, the members of the Company had approved the
variation in utilization of funds raised through Initial Public Offer
through postal ballot in terms of provisions of Section 192A of the
Companies Act, 1956, read with provisions of the Companies (Passing of
the Resolution by Postal Ballot) Rules, 2001 on 21st June, 2011.
Dividend
In view of loss incurred during the year under review and the
accumulated losses, your directors express their inability to declare
any dividend for the year under review. Several measures are being
taken towards increasing the revenue, cost control and to improve the
profitability.
Fixed Deposits
The Company has not accepted any deposits during the year, within the
meaning of Section 58A of the Companies Act 1956 and the Rules made
thereunder.
Cable Distribution
During the year under review the Telecom Regulatory Authorities of
India (TRAI) recommended a digitalization plan to the Ministry of
Information & Broadcasting that involves introduction of digital cable
services across India. The digital plan is meant to improve consumer
viewing experience in terms of number of Channels, providing digital
quality to the consumers as against current analogue picture quality,
to curb the revenue leakage at various level and ultimately to increase
transparency in reporting numbers. The Company is planning to
implement additional services like High Definition (HD),
Video-on-Demand (VOD), Pay-per-View (PPV), Games-on-Demand, etc. to
more effectively compete with Direct to Home (DTH) and Internet
Protocol Television (IPTV).
As per the report of Media Partners Associates (MPA) 2011, out of 239
million homes in India, 147 million homes have TV set. with 61% CATV
penetration. According to MPA estimates, digital cable is expected to
reach 34 million homes by 2020. Digital cable share will reach about
33% which is about at 6% levels in 2011. Larger number of channels,
better picture quality, choice of audio and other value added services
are expected to be key drivers of digital cable in the country. Digital
cable will face challenge from DTH players in coming years. MSO are
better placed to counter DTH players, their key strengths like
affordable pricing, prompt customer support, niche local content and
local area offices for consumer interface will help them to grow faster
on digital platform.
Hathway has a reach of approximately 8.4 million Cable TV homes for its
analogue CATV services. We have over 15,000 kilometers of hybrid fiber
optic cable which is spread over 140 Cities & Towns. Hathway has
commenced a rapid digitalization process and at present we have
deployed close to 1.5 million digital set top boxes in CAS & Non - CAS
areas. Hathway is the only MSO with focus on digitization of non -
metro markets. It has established 19 digital head-ends in the country.
Internet Market
India has around 11.89 million broadband subscribers as on 31st March
2011. Broadband has registered a quarterly growth of 8.17% and
year-on-year growth of 35.49%. Cable modem subscribers' accounts for
only 4% that is only 0.801 million internet subscribers. Cable provides
big potential for growth of broadband penetration in the country
considering the cable universe of 95 million CATV homes.
Hathway is the largest MSO offering broadband services in 21 cities.
Hathway is Category "A" Internet Service Provider (ISP) providing
broadband services to retail and corporate segments in various states.
Hathway has 14,32,937 homes ready for catering for internet services.
As of 31st March 2011, Hathway has 3,48,345 internet subscribers with
all India rank of 5th largest ISP player in the country. Hathway has
market leadership in terms of reach, revenues and subscribers. With
high quality & high capacity network, Hathway is well placed to garner
large share of growing broadband market. Amongst private sector,
Hathway is India's 2nd largest wired broadband service provider.
According to the latest TRAI report, Hathway Broadband wins the top
spot in overall quality of service in Mumbai. Hathway is the first ISP
to introduce the Simply Unlimited plans for retail customers. Your
Company has started offering value added services like Web products
(e.g. website builder, domain name registration etc), online tutorials
with Topper learning to our customers and soon we will be adding more
services like games on demand, movies on demand and security solutions
(anti virus).
Directors
After the end of the financial year under review, Mr. Brahmal
Vasudevan, Director, resigned from the Board of your Company. Your
Directors place on record their appreciation on the valuable services
rendered by Mr. Brahmal Vasudevan and the guidance received from him
during his tenure as a Director. Mr. Brahmal Vasudevan was appointed as
an additional independent director on the Board of Directors of your
Company with effect from 9th May 2011. The Company has received the
notice along with requisite deposit, from the member pursuant to
Section 257 of the Companies Act, 1956 proposing his candidature for
the office of Directors of the Company.
Pursuant to the provisions of Section 255 read with Section 256 of the
Companies Act, 1956, Mr. Viren Raheja and Mr. Uday Shankar, Directors
would retire by rotation at the ensuing Annual General Meeting and
being eligible, offer themselves for reappointment. Mr. Jagdish Kumar
G., Director, who also retires by rotation at the ensuing Annual
General Meeting, has not offered himself for reappointment.
As required, the requisite details of Directors seeking re- appointment
are included in this Annual Report.
Personnel
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars are given in the statement which
forms part of this report. In the terms of provisions of Section 219(1)
(b) (iv) of the Companies Act, 1956, the Directors' Report is being
sent to all the shareholders of the Company excluding the aforesaid
statement. The statement is available for inspection at the Registered
Office of the Company. Any shareholder interested in obtaining a copy
of the said statement may write to the Company Secretary at the
Registered Office of the Company.
Employees Stock Option Plan
The disclosure required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
in the Annexure to this Report.
The options outstanding under the Employees Stock Option Plan 2007
(Revised 2010) at the end of the year stood at 7,69,999 after
lapse/forfeiture of 1,09,500 options.
Subsidiaries
The financial data of the subsidiaries has been furnished along with
the statement pursuant to section 212 of the Companies Act, 1956
forming part of the Annual Report. Further, pursuant to Accounting
Standards issued by the Institute of Chartered Accountants of India,
the Company has presented the Consolidated Financial Statements which
include the financial information relating to its subsidiaries and
forms part of the Annual Report.
The Company shall provide the copy of the Annual report and other
related information of its subsidiary companies as required under
section 212 of the Companies Act, 1956 to the shareholders of the
Company and the subsidiaries upon their written request. These
documents will also be available for inspection at the registered
office of the Company and registered offices of the respective
subsidiary Companies during the working hours up to the date of Annual
General Meeting.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The requirement of disclosures in terms of Section 217(1) (e) of the
Companies Act, 1956, pertaining to the conservation of energy and
technology absorption is not applicable to the Company.
During the year under review, your Company has incurred a total
expenditure on foreign exchange amounting to Rs. 317.10 Lacs as
compared to the last year's expenditure of Rs. 610.72 Lacs.
Like last year, your Company has not earned any Foreign Exchange Income
during the year under review.
Audit Committee
A committee of the Board of Directors called 'Audit Committee' was
reconstituted on 23rd October 2010 comprising of Mr. Bharat Shah, Mr.
Viren Raheja, Mr. Sasha Mirchandani, Mr. Sridhar Gorthi and Mr.
Devendra Shrotri, Directors of the Company. The Audit Committee reviews
and lays down the basic Audit norms, rules and regulations and Audit
Policies which are made applicable to the Company. The Audit Committee
will function subject to the superintendence and direction of the Board
of Directors and the recommendations made by the Audit Committee are
mandatory in nature.
Directors' Responsibility Statement
Your Directors in compliance of Section 217 (2AA) of the Companies Act,
1956 confirm that in the preparation of the annual accounts for the
year ended March 31, 2011:
a) the applicable accounting standards had been followed along with
proper explanation relating to material departures, if any;
b) the Company has selected such accounting policies and applied them
consistently and made judgement and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on March 31, 2011 and the loss of the Company for the
year;
c) proper and sufficient care has been taken for the 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;
d) the annual accounts of the Company has been prepared on a going
concern basis.
Corporate Governance & Management Discussion and Analysis Report
A report on Corporate Governance along with a certificate from M/s.
Rathi & Associates, Practicing Company Secretaries, regarding
compliance of requirements of Corporate Governance pursuant to Clause
49 of the Listing Agreement with Stock Exchanges along with the report
of Corporate Governance is annexed hereto and forms part of this
report. The Management Discussion and Analysis Report on the operations
of the Company as required under the Listing Agreement with the Stock
Exchanges is also annexed hereto and forms part of this report.
Auditors
M/s. G. M. Kapadia & Co, Chartered Accountants, the Statutory Auditors,
shall retire at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. Your Directors recommend their
re-appointment.
Comments on Auditors' Report
Your Auditors have made some observations in the annexure (i) (b) to
their report on verification of distribution equipments. Your Directors
state that the Company has reconciled the book stock of Cable TV and
Internet Access Devices with physical stock and there was no
significant difference, which though not dealt with in the books of
accounts does not have any material impact.
Acknowledgements
Your Directors take this opportunity to thank all the shareholders and
lenders for their continued support. Your Directors also wish to place
on record, the sincere appreciation to all the employees, franchisees,
distributors and the vendors for their excellent contribution towards
the progress of the Company.
FOR AND ON BEHALF OF THE BOARD
Place: Mumbai CHAIRMAN
Date: August 12, 2011
Mar 31, 2010
We hereby present the Fiftieth Annual Report to the Members together
with the Audited Statement of Accounts for the Financial Year ended
March 31, 2010.
Financial Highlights (Rs. In Lacs)
Consolidated Standalone
Particulars 2009-10 2008-09 2009-10 2008-09
Operating & 73,961.82 67,286.27 40,653.68 40,438.33
Other Income
Gross Operating 13,266.13 10,542.43 7,462.63 7,628.99
Profit before
interest,
depreciation,
amortization &
taxes
Interest 5,562.02 4,308.11 5,090.97 4,186.18
Loss/(Gain) (59.72) 781.52 (51.96) 668.97
on Foreign
Exchange
Fluctuations
Loss on sale of 40.41 251.88 39.92 253.37
Set Top Boxes
Depreciation & 11,112.36 9,385.48 8,861.53 8,166.07
Amortization
Impairment 176.77 4.24 176.77 ----
of Tangible /
Intangible
Assets
Exceptional 1,488.61 2,976.79 1,632.70 4,595.79
Items (Provision
for doubtful
advances /
investments
/ receivables
/ bad and
doubtful debts
/ impairment
of intangible
assets / Loss
on shortage of
tangible assets
/ depreciation
written back)
Provision for 1,563.17 1,197.81 1.10 105.93
Taxation -
Wealth Tax &
Fringe Benefit
Tax
Net Loss (6,617.49) (8,363.40) (8,288.40)(10,347.31)
Cumulative (46,226.48) (38,216.48) (45,914.02)(37,563.70)
Loss carried
to Balance
Sheet after
adjustments
Operations
During the year under review, the total income of your Company was Rs.
40,653 Lacs on standalone basis and Rs. 73,961 Lacs on consolidated
basis as compared to the last years total income of Rs. 40,438 Lacs on
standalone basis and Rs. 67,286 Lacs on Consolidated basis
respectively. The Net Loss after taxation and Exceptional Items has
come down and stood at Rs. 8,288 Lacs on standalone basis and Rs. 6,617
Lacs on consolidated basis.
Initial Public Offering
The Company with a view to raise funds for customer acquisitions,
investment in the development of broadband and digital capital
expenditure, deployment of set top boxes, repayment of loans and for
general corporate purposes, made an Initial Public Offer (IPO) of 27.75
million equity shares of Rs. 10/- each (20 million equity shares by way
of fresh issue and 7.75 million by way of Offer for Sale) at a price of
Rs. 240/- per equity share including a premium of Rs. 230/- per equity
share aggregating Rs. 6,660 million. The IPO opened on 9th February,
2010 and closed on 11th February, 2010. The Issue was subscribed 1.34
times. The allotment of shares was made on 19th February, 2010. The
equity shares are listed at the National Stock Exchange of India
Limited (ÃNSEÃ) and the Bombay Stock Exchange Limited (ÃBSEÃ) and the
trading commenced from 25th February, 2010.
Axis Bank Limited was appointed as the Monitoring Agency for the
purpose of monitoring the utilisation of the proceeds of the fresh
issue. The details of the utilisation of fresh issue proceeds are
disclosed in Standalone Notes to Accounts.
Dividend
In view of loss incurred during the year under review and the
accumulated losses, your directors express their inability to declare
any dividend for the year under review. Several measures are being
taken towards increasing the revenue, cost control and to improve the
profitability.
Fixed Deposits
The Company has not accepted any deposits during the year, within the
meaning of Section 58A of the Companies Act 1956 and the Rules made
thereunder.
Cable Distribution
As per the report of Media Partners Associates (MPA) 2010, out of 220
million homes in India, 134 million homes have TV set, with 65% CATV
penetration. According to MPA estimates, digital cable is expected to
reach 29 million homes by 2020. Digital cable share will reach about
26% which is about at 3% levels in 2009. Larger number of channels,
better picture quality, choice of audio & other value added services
are expected to be key drivers of digital cable in the country. Digital
cable will face challenge from DTH players in coming years. MSO are
better placed to counter DTH players, their key strengths like
affordable pricing, prompt customer support, niche local content and
local area offices for consumer interface will help them to grow faster
on digital platform.
Hathway has a reach of approximately 8.2 million Cable TV homes for its
analogue CATV services. We have over 15,000 kms. of hybrid fiber optic
cable which is spread over 125 Cities. Hathway has commenced a rapid
digitalization process and at present we have deployed 10,33,399
digital set top boxes in CAS & in Non à CAS areas. Hathway is the only
MSO with focus on digitization of non- metro markets. It has
established 19 digital headends in the country.
Internet Market
India has around 8.77 million broadband subscribers as of 31st March
2010. Broadband is growing at 12.2 % over the previous quarter. Cable
modem subscribersà accounts for only 5% that is only 0.485 million
subscribers. Cable provides big potential for growth of broadband
penetration in the country considering the cable universe of 8.2
million CATV homes.
Hathway is the largest MSO offering broadband services in 18 cities.
Hathway is Category ÃAÃ Internet Service Provider (ISP), providing
broadband services to retail & corporate segments in various states.
Hathway has 10,34,883 homes ready for catering for internet services.
As of 31st March 2010, Hathway has 3,14,000 internet subscribers with
all India rank of 5th largest ISP player in the country. Hathway has
market leadership in terms of reach, revenues & subscribers. With high
quality & high capacity network, Hathway is well placed to garner large
share of growing broadband market.
Directors
After the last Annual General Meeting, Mr. Paul Aiello, Director,
resigned from the Board of your Company. In view of the same Mr. Uday
Shankar, Alternate Director to Mr. Paul Aiello also ceased to be an
Alternate Director as such. Your Directors place on record their
appreciation on the valuable services rendered by Mr. Paul Aiello and
Mr. Uday Shankar and the guidance received from them during their
tenure as Directors. During the year, Mr. Uday Shankar was re -
appointed as a director.
During the year under review Mr. Bharat Shah, Mr. Sasha Mirchandani,
Mr. Sridhar Gorthi and Mr. Devendra Shrotri were appointed as the
Additional Directors by the Board of Directors with effect from 10th
September, 2009. The Company has received the notices along with
requisite deposit, from the members pursuant to Section 257 of the
Companies Act, 1956 proposing their candidature for the office of
Directors of the Company.
Pursuant to the provisions of Section 255 read with Section 256 of the
Companies Act, 1956, Mr. Vinayak Aggarwal, Mr. Rajan Raheja, and Mr.
Akshay Raheja, Directors would retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for reappointment.
The information to shareholders as per Clause 49 of the Listing
Agreement pertaining to brief resume, expertise in functional areas,
other directorships etc of Mr. Vinayak Aggarwal, Mr. Rajan Raheja, Mr.
Akshay Raheja, Mr. Bharat Shah, Mr. Sasha Mirchandani, Mr. Sridhar
Gorthi and Mr. Devendra Shrotri, Directors is being provided separately
in the Report of Corporate Governance of this Annual Report.
Personnel
In accordance with the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars are given in the statement which form
part of this Report. In the terms of provisions of Section 219(1) (b)
(iv) of the Companies Act, 1956, the Directorsà Report is being sent to
all the shareholders of the Company excluding the aforesaid, the
particulars are given in the statement which form part of this Report.
The statement is available for inspection at the Registered Office of
the Company. Any shareholder interested in obtaining a copy of the
said statement may write to the Company Secretary at the Registered
Office of the Company.
Employees Stock Option Plan
The disclosure required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
in the Annexure to this Report.
During the year under review, your Company has granted 60,000 options
to the eligible employees under the Employees Stock Option Plan 2007
(Revised 2010) at a price of Rs. 110.20 & Rs. 157.30. The options
outstanding at the end of the year stood at 8,79,499 after
lapse/forfeiture of 1,09,000 options.
Subsidiaries
The Company has made necessary application to the Central Government
under Section 212(8) of the Companies Act, 1956. Further in terms of
requirements, a statement pursuant to Section 212 of the Act relating
to the subsidiaries of your Company and the details of the subsidiary
companies have been annexed and forming part of this report. The
details of the Company and the subsidiaries are also made available on
the website of the Company. The annual accounts of the subsidiary
Companies and related detailed information will be made available to
the holding company and subsidiary companies investors for inspection
at the registered office of the holding company and subsidiary
companies. These documents will be made available to any investors of
the Holding Company and Subsidiary Companies on the receipt of request
in this regard.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The requirement of disclosures in terms of Section 217(1) (e) of the
Companies Act, 1956, pertaining to the conservation of energy and
technology absorption is not applicable to the Company.
During the year under review, your Company has incurred a total
expenditure on foreign exchange amounting to Rs. 610.72 Lacs as
compared to the last years expenditure of Rs. 1,080 Lacs.
During the year under review, your Company has not earned Foreign
Exchange Income whereas last years Foreign Exchange Income was Rs.
14.95 Lacs.
Audit Committee
A committee of the Board of Directors called ÃAudit Committeeà was
reconstituted on 12th August 2010 comprising of Mr. Bharat Shah, Mr.
Viren Raheja, Mr. Devendra Shrotri and Mr. Sasha Mirchandani, Directors
of the Company. The Audit Committee reviews and lays down the basic
Audit norms, rules and regulations and Audit Policies which are made
applicable to the Company. The Audit Committee will function subject
to the superintendence and direction of the Board of Directors and the
recommendations made by the Audit Committee are mandatory in nature.
Directorsà Responsibilities Statement
Your Directors in compliance of Section 217 (2AA) of the Companies Act,
1956 confirm that in the preparation of the annual accounts for the
year ended March 31, 2010:
a) the applicable accounting standards had been followed along with
proper explanation relating to material departures, if any;
b) the Company has selected such accounting policies and applied them
cons istently and made judgement and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on March 31, 2010 and the loss of the Company for the
year;
c) proper and sufficient care has been taken for the 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;
d) the annual accounts of the Company has been prepared on a going
concern basis.
Corporate Governance & Management Discussion and Analysis Report
A report on Corporate Governance along with a certificate from M/s. S.
Anantha & Co, Practicing Company Secretaries, regarding compliance of
requirements of Corporate Governance pursuant to Clause 49 of the
Listing Agreement with Stock Exchanges along with the report of
Corporate Governance is annexed hereto and forms part of this report.
The Management Discussion and Analysis Report on the operations of the
Company as required under the Listing Agreement with the Stock
Exchanges is also annexed hereto and forms part of this report.
Auditors
M/s. G. M. Kapadia & Co, Chartered Accountants, the Statutory Auditors,
shall retire at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. Your Directors recommend their
re-appointment.
Comments on Auditors Report
In relation to the matters dealt with by the Auditors in the Audit
Report we state as under:
1. Your Auditors have made some observation on non-receipt of
information about the capital of the partnership firms in which the
Company is a partner. Your Directors clarify that your Company has
entered into various partnerships with the proposed joint venture
partners for transitional stage till such partnership firms are
converted into and succeeded by the Joint Venture Companies. Since the
Audited financial statements of these partnership firms were not ready,
the same were not available for verification as a result of which the
Company has not recognized its share of profit or loss in these
partnership firms. The share of the Company in its Capital is Rs.
127,731/- which in the opinion of the Directors is not material, hence
in the opinion of the management such share of profit or loss is not
material. The note No. B(23) of the Schedule N to Accounts on this is
self explanatory.
2. With respect to the observation in annexure (i) (b) regarding
physical verification of distribution equipments your directors clarify
that these will be physically verified at least once in 3 to 5 years
time frame. In respect of the Cable TV and Internet Access Devices, the
Company has reconciled the book stock with physical stock and there was
no significant difference, which though not dealt with in the books of
accounts does not have any material impact.
Acknowledgements
Your Directors take this opportunity to thank all the shareholders and
lenders for their continued support. Your Directors also wish to place
on record, the sincere appreciation to all the employees, franchisees,
distributors and the vendors for their excellent contribution towards
the progress of the Company.
FOR AND ON BEHALF OF THE BOARD
CHAIRMAN
Place: Mumbai
Date: August 19, 2010
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