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Your Directors are pleased to present the 27th (Twenty Seventh) Annual Report and the Audited Financial Statements of the Company for the Financial Year ended March 31, 2015.
The Board takes the pleasure to report that your Company becomes the first Indian Direct To Home ('DTH') operator to have profits in a financial year. With sustained focus on the business, your Company has reported a profit of Rs. 101.45 Lacs during the financial year under review. However, with a view to conserve the resources for future business requirements and expansion plans, your Directors are of view that the current year's profits be ploughed back into the operations and hence no dividend is recommended for the year under review.
The Financial Year 2014–15 has been a year of outstanding performance for Dish TV. By executing clear and consistent strategies, the company has delivered strong operational growth and excellent financials – making it the first DTH Brand to turn profitable. The year under review witnessed increase in all folds including gross revenue, gross subscriber base, EBITDA and ARPU and Net Profit.
Dish TV offers a wide array of multi–brand and multi product portfolio to suit the needs of different consumer segments. It has been a conscious effort of your Company to lead on the content front for both HD and SD channels. Continuing to lead the category with largest bouquet of 43 HD channels, dishtruHD+ has taken the HD TV viewing experience to the next level whilst also building a high–ARPU base of HD users that helps in retention too. Evaluating the increase in trend on the usage of recording, Dish TV now only offers recorder ready set–top boxes which allows Indian consumers to taste the power of pause/play and other recording features. With the up–gradation of customers from Standard Definition (SD) to High Definition (HD) and uptake from new launches, the Company expects to see an increasing trend in the ARPU. The introduction of long term offers on recharges, will aid retention.
Amongst several initiatives taken this year, the big success story is attributed to Zing Digital. With the launch of ZING, Dish TV forayed into a regionally customized DTH service which provides an opportunity to maximize its foothold as DAS rolls out further into phases 3 and 4, covering small towns and rural markets. Zing digital is now present in West Bengal, Tripura & 3 districts of Assam, Orissa, Maharashtra, Andhra Pradesh, Tamil Nadu and Kerala. Thinking ahead of the curve, Dish TV created an entirely new offering for consumers whose needs are largely regionally driven content and shop for pocket friendly subscription alternates. ZING brand is positioned comfortably between the DTH offering of Doordarshan on the one hand and pay DTH brands on the other, offering customized regional content at value for money prices. Understanding the target group was the key in introducing Zing Digital. The consumer in this segment has a high propensity intake for regional content and their purchase behavior, therefore, too is driven by an offering of maximum regional & relevant content rather than the entire bouquet of content which turns out to be an expensive proposition for them.
With launch of the Direct to Home services in Sri Lanka by Dish T V Lanka (Private) Limited, subsidiary of your Company, the brand – Dish TV has now become a multi–national brand. This is a case in point having the most exhaustive distribution network plan charted for the region and the next stepping stone for the brand.
Being the pioneer, the effort of Dish TV has always been to make entertainment accessible in the most convenient of ways to the consumers. A few examples of such offerings are – DishOnline, stemming from high penetration of smart phones and internet, the Indian consumer today is spending increasing time on alternate screens like the laptop, tablet & smartphone, away from the conventional TV viewing. Understanding the new dynamics of evolving consumer trends of multi–screen behavior, this product provides LIVE TV, on–demand movies, catchup TV & Video shows at the press of a button on the app. Introducing value added services (VAS) like Anandam and Music Active, enticing today's consumer who wants more from his TV entertainment. Music Active service fulfills the need of music–lovers by providing music across 10 genres 24X7. Do It Yourself services empower the consumer to take complete control of his entertainment needs, whether it's about online recharge, adding a channel, tracking account details, activating a service and much more; via easy modes like Missed Call, SMS and Online.
With the increase in number of "more than one TV households", the focus lies on expanding the subscriber base with multi TV connections. Multi TV connections empower the consumer to enjoy their entertainment on their second TV set at less than half the pack price versus their subscription on the first TV. Initiatives like these have consistently made Dish TV, India's Most Trusted Brand for the consecutive 3 years in a row. To take it further, this year Dish TV made inroads at the international level as a brand by winning 3 awards at the most prestigious advertising awards festival, Cannes Lions.
During the year under review, your Company continued to engage subscribers by providing wholesome entertainment experience through relevant content, on demand services and the door step service & support. The positive effect of the steps taken by the Company coupled with the continuous efforts to control the costs yielded positive results in all fronts of the business. It also provided an edge over competition and the benefit of such service infrastructure will yield benefit in coming years. Your Company continued to play the role of the leader of the industry with bringing new and innovative products and services into the category and setting benchmarks for others to follow. Dish TV has built and continues to sustain abundant capacity, beaming from 2 different satellites, offering the largest bouquet of content. All this packaged at consumer friendly tiers that suit diverse consumer needs for content across different genres and languages.
Growth would be supreme and so will be the revenues making Dish TV surely a brand to reckon with as we strive to enhance consumers TV viewing experience.
Subsidiary in Sri Lanka
Your Company, upon the approval of Board of Directors, incorporated a Joint Venture ('JV') Company with Satnet (Private) Limited, a Company incorporated under the Laws of Sri Lanka, in the name and style of 'Dish T V Lanka (Private) Limited' for providing Direct to Home Services in Sri Lanka, on April 25, 2012 with a paid–up share capital of 1 million Sri Lankan Rupees. Your Company holds 70% of the paid–up share capital and Satnet (Private) Limited holds 30% of the paid–up share capital. Dish T V Lanka (Private) Limited has received the requisite licenses and permissions from regulatory authorities and has commenced its commercial operations. The Company has also been registered as a Board of Investment ('BOI') approved Company in Sri Lanka. The registration with BOI grants various benefits to the company including duty free imports of the equipment and set top box for one year, tax holiday of 7 years etc.
Subsidiary in India
Your Company, upon the approval of Board of Directors and the Members of the Company, acquired the entire share capital of Xingmedia Distribution Private Limited ('Xingmedia') on March 24, 2014. Upon requisite approvals, the name of Xingmedia has been changed to 'Dish Infra Services Private Limited' ('Dish Infra'). Post approval of Members of the Company by way of Special Resolution passed by Postal Ballot, the entire non–core business of the Company (undertaking pertaining to the provision of infra support services to the subscribers for facilitating the DTH services including the instruments which are required for receiving DTH signals such as set top boxes(STB), dish antenna, Low Noise Boxes (LNB) and other customer related services including call centre services and repairs) has been transferred to Dish Infra with effect from April 1, 2015. Dish Infra has commenced its commercial operations (including call center and back end support service to the Company) in the first quarter of the Financial Year 2015–16.
Upon nomination by the Company, an Independent Director of the Board has been appointed as an Independent Director on the Board of Dish Infra (Company's material non–listed Indian Subsidiary) in compliance with the provisions of the listing agreement.
Audited Accounts of Subsidiary Companies
The Company has prepared the Audited Consolidated Financial Statements in compliance with applicable Accounting Standards and the Listing Agreement that forms part of this Annual Report. The Statement pursuant to Section 129(3) of Companies Act, 2013, and Rule 5 of Companies (Accounts) Rules, 2014 highlighting the summary of the financial performance of the subsidiaries is annexed to this Report. The Audited Financial Statements and related information of the Subsidiaries will be made available to any member, upon request, and shall also be open for inspection at the Registered Office of the Company.
As required under the Accounting Standard AS–21 –'Consolidated Financial Statements', issued by the Institute of Chartered Accountants of India ('ICAI') and applicable provisions of the Listing Agreement with the Stock Exchange(s), the Audited Consolidated Financial Statements of the Company reflecting the Consolidation of the Accounts of its subsidiaries to the extent of equity holding in these Companies are included in this Annual Report.
During the year the Board of Directors has formulated a policy for determining Material Subsidiaries. The Policy is disclosed on the Company's website and is accessible at <http://www.dishtv.in/Pages/Investor/> Corporate–Governance.aspx
Your Company's fully paid up equity shares continue to be listed and traded on National Stock Exchange of India Limited ('NSE') and BSE Limited ('BSE'). Both these Stock Exchanges have nation–wide terminals and hence facilitates the shareholders/investors of the Company in trading the shares. The Company has paid the annual listing fee for the Financial Year 201516 to the said Stock Exchanges.
The Company also paid the annual listing fee to the Luxembourg Stock Exchange in respect of its Global Depository Receipts ('GDR').
Your Company has arrangements with National Securities Depository Limited ('NSDL) and Central Depository Services (India) Limited ('CDSL'), the Depositories, for facilitating the members to trade in the fully paid up equity shares of the Company in Dematerialized form. The Annual Custody fees for the Financial Year 2015–16 shall be paid to both the Depositories on receipt of invoices from them.
During the year under review, your Company has allotted 616,820 fully paid equity shares, upon exercise of Stock Option by the eligible Employees of the Company, pursuant to the Employee Stock Option
Scheme – 2007 ('ESOP – 2007') of the Company and these shares were duly admitted for trading on the stock exchanges viz NSE and BSE.
During the Financial Year 2008–09, your Company had come up with Right Issue of 518,149,592 equity shares of Rs.1 each, issued at Rs. 22 per share (including premium of Rs. 21 per share), payable in three installments. Upon receipt of valid first and second call money from the concerned shareholders, during the year under review, the Company converted 50 equity shares from Rs. 0.50 each paid up to Rs. 0.75 each paid up and 250 equity shares from Rs. 0.75 each paid up to Rs. 1 each fully paid up.
Pursuant to the issue of further equity shares under ESOP scheme and subsequent to conversion of partly paid equity shares, the paid up capital of your Company during the year has increased from Rs. 1,064,934,215.75 (comprising of 1,064,902,570 fully paid up equity shares of Rs. 1 each & 22,193 equity shares of Rs. 1 each, paid up Rs.0.75 per equity share & 30,002 equity shares of Rs. 1 each, paid up f 0.50 per equity share) to Rs. 1,065,551,110.75 (comprising of 1,065,519,640 fully paid up equity shares of Rs. 1 each & 21,993 equity shares of Rs. 1 each, paid up Rs. 0.75 per equity share & 29,952 equity shares of Rs. 1 each, paid up f 0.50 per equity share)
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, your Board had authorized the Nomination and Remuneration Committee (formerly 'Remuneration Committee') to administer and implement the Company's Employees Stock Option Scheme (ESOP – 2007) including deciding and reviewing the eligibility criteria for grant and /or issuance of stock options to the eligible Employees / Independent Directors under the Scheme. The ESOP Allotment Committee of the Board considers, reviews and allots equity shares to the eligible Employees / Independent Directors exercising the stock options under the Employee Stock Option Scheme (ESOP – 2007) of the Company.
During the period under review, the Nomination and Remuneration Committee (formerly 'Remuneration Committee') of the Board granted 207,500 stock options to the eligible Employees as per the ESOP –2007 of the Company. The Board of Directors, during the year, allotted 616,820 fully paid equity shares, upon exercise of the stock options by eligible Employees under the ESOP – 2007.
Applicable disclosures relating to Employees Stock Options as at March 31, 2015, pursuant to Clause 12 (Disclosure in the Directors' Report) of the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, are set out in the Annexure to this Report.
Statutory Auditors' certificate to the effect that the ESOP – 2007 Scheme of the Company has been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company, as prescribed under Clause 14 of the said Guidelines, has been obtained and shall be available for inspection at the Annual General Meeting of the Company. Copy of the same shall also be available for inspection at the Registered Office of the Company.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs. 113,992.91 Lakhs, the Company has received a sum of Rs.113,986.35 Lakhs towards the share application and call money(s) as at March 31, 2015.
The details of utilization of Rights Issue proceeds are placed before the Audit Committee and the Board on a quarterly basis. Further, the Company also provides the details of the utilization of Rights Issue proceeds to IDBI Bank Limited, the Monitoring Agency of the Company, on half yearly basis along with Auditors' Certificate on Utilization and furnishes the Monitoring Report to the Stock Exchanges.
The Board at its meeting held on May 28, 2009 approved to make changes in the manner of usage of right issue proceeds. The utilization of rights issue proceeds as on March 31, 2015, is as under
The half yearly Monitoring Reports issued by IDBI Bank Limited, the Monitoring Agency of the Company, containing deviation from the original proposed expenditure plan and in accordance with the approved revised plan was recorded by the Audit Committee and the Board at their respective meetings and necessary compliance in this regard had been carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt ('GDR') Offer of the
Company for 117,035 GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000 fully paid equity shares of the Company were fully subscribed by Apollo India Private Equity II (Mauritius) Limited. The underlying shares against each of the GDRs were issued in the name of the Depository – Deutsche Bank Trust Company Americas. As on March 31, 2015, 85,035 GDRs have remained outstanding, the underlying shares of which forms part of the existing paid up capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2015, is as under
NON CONVERTIBLE DEBENTURES
Your Company had issued and allotted 200 (Two Hundred Only) Rated, Unlisted, Secured, Redeemable Non–Convertible Debentures ("NCDs") of the Face value of Rs. 1,00,00,000/–(Rupees One Crores Only) each, for cash, aggregating to Rs. 200,00,00,000/–(Rupees Two Hundred Crores Only) on Private Placement basis on October 1, 2014. Credit Rating Information Services of India Limited (CRISIL) has assigned an 'A–' rating which signifies that the debentures are considered to have adequate degree of safety regarding timely servicing of financial obligations and carry low credit risk.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review as provided under Clause 49 of the Listing Agreement with the Stock Exchanges is separately attached hereto and forms a part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with requirements of Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee (CSR Committee). The CSR Committee comprises of two Independent Directors and the Managing Director. The Committee has approved the CSR Policy with Education, Health Care, Women Empowerment and Sports as primary focus area. Your Company shall spend at least 2% of the average net profits of the Company made during the three immediately preceding Financial Years in pursuance of its Corporate Social Responsibility Policy when the Company has net profits for a period of three consecutive Financial Years. Since the Company presently does not have profits for three consecutive Financial Years, the annual report on CSR activities as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is not applicable.
During the year under review, your Company sought the approval of the Shareholders on the following matters, vide Postal Ballot Notice dated July 22, 2014
• Special Resolution under Section 180(1)(c) of Companies Act, 2013 to borrow upto RS. 3,000 crores over and above the paid–up share capital and free reserves of the Company.
• Special Resolution under Section 180(1)(a) of Companies Act, 2013 for creation of Charge/ mortgage on assets of the Company.
• Special Resolution under Section 42 and 71 of Companies Act, 2013 to offer or invite subscription of non–convertible debentures on private placement basis.
• Special Resolution under Section 186 of Companies Act, 2013 to authorize the Board of Directors for making investment/giving any loan or guarantee/providing security.
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E–Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The result on the voting conducted through Postal Ballot process was declared on September 10, 2014.
During the year under review, your Company also sought the approval of the Shareholders on the following matters, vide Postal Ballot Notice dated October 29, 2014.
• Special Resolution under Section 180(1)(a) of the Companies Act, 2013 to approve Sale/transfer of Company's Non–Core Business (including Set–top boxes, Dish antenna and related services ) to its Wholly owned Subsidiary , as a going concern basis.
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E–Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The result on the voting conducted through Postal Ballot process was declared on February 3, 2015.
The procedure prescribed under Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, was adopted for conducting the Postal Ballot.
Further, details related to the Postal Ballot procedure adopted, voting pattern and result thereof have been provided under the General Meeting Section of 'Report on Corporate Governance'.
'Corporate Governance' is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation in order to achieve the objectives of the organization transparently. This is ensured by taking ethical business decisions and conducting business with a commitment to values, while meeting shareholder's expectations. Corporate Governance is not just a destination but a journey to constantly improve sustainable value creation.
Your Company believes that a sound, transparent, ethical and responsible Corporate Governance framework essentially emanates from the intrinsic will and passion for good governance ingrained in the organization. Further, Your Company believes that maintaining the highest standards of Corporate Governance is imperative in its pursuit of leadership in the Direct to Home ('DTH') business. The Company continues to focus its resources, strengths and strategies to achieve its vision of continuing to be the leader in DTH Industry.
Your Company considers it an inherent responsibility to disclose timely and accurate information and also places high emphasis on best business practices and standards of governance besides strictly complying with the requirements of Clause 49 of the Listing Agreement and applicable provisions of Companies Act, 2013.
The Audit Committee of the Board has been vested with powers and functions relating to Risk Management which inter alia includes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization; and (c) formulation, implementation and monitoring of the risk management plan.
The Company is in compliance of all mandatory requirements regarding Corporate Governance as stipulated under Clause 49 of the listing agreement with the stock exchange(s). Certificate issued by the Statutory Auditors of the Company on compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the stock exchange(s) forms part of the Corporate Governance Report.
Your Board has in accordance with the requirements of Companies Act, 2013 and Clause 49 of the Listing Agreement has adopted new policies and amended existing policies such as policy on Related Party Transaction, Code of Conduct for Directors and Senior Management, Corporate Social Responsibility Policy and Whistle Blower and Vigil Mechanism Policy. These Policies are disclosed on the Company's website and is accessible at <http://www.dishtv.in/Pages/Investor/> Corporate–Governance.aspx
As on March 31, 2015, your Board comprises of 8 Directors including 4 Independent Directors. The Company recognizes and embraces the importance of a diverse Board in its success. The Board has adopted the Board Diversity Policy.
Number of Meetings of the Board
The Board met nine times during the Financial Year, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and Listing Agreement.
Declaration by Independent Directors
Independent Directors of the Company provide declarations both at the time of appointment and annually confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Clause 49 of the Listing Agreement.
As on March 31, 2015, Your Board comprises of 8 Directors including 4 Independent Directors. During the year under review, Ms. Asha Swarup was appointed as an Additional Independent Woman
Director with effect from September 29, 2014 in compliance with the provisions of revised Clause 49 of Listing Agreement and Companies Act, 2013. Ms. Asha Swarup resigned as Director of the Company as at the close of business on March 20, 2015 due to emerging changes and engagements and difficulty to travel. Your Board places on record its appreciation for contributions made by Ms. Asha Swarup during her tenure as Additional Independent Woman Director.
Your Board has subsequently inducted Dr. Rashmi Aggarwal as an Additional Independent Director with effect from May 26, 2015. In terms of Section 161 of the Companies Act, 2013, Dr. Rashmi Aggarwal shall hold office up to the date of the ensuing Annual General meeting. The Company has received a notice in writing along with requisite deposit pursuant to Section 160 of Companies Act, 2013, proposing appointment of Dr. Rashmi Aggarwal as Director of the Company. Your Board has recommended appointment of Dr. Rashmi Aggarwal as an Independent Director not liable to retire by rotation for a period of 3 (three) consecutive years with effect from the conclusion of the 27th Annual General Meeting.
Mr. Ashok Kurien, Non–Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible he has offered himself for re–appointment. Your Board recommends his re–appointment.
Key Managerial Personnel
In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. Jawahar Lal Goel, Managing Director, Mr. Rajagopal Chakravarthi Venkateish, Chief Executive Officer, Mr. Rajeev Kumar Dalmia, Chief Financial Officer and Mr. Ranjit Singh, Company Secretary of the Company were nominated as Key Managerial Personnel.
The Nomination & Remuneration Committee and the Board at their meetings held on March 20, 2015, approved the Performance evaluation Policy (For Board, Individual Directors, Chairperson, Committees of Board) and laid down criteria for performance evaluation of Directors, Chairperson, Managing Director, Board Level Committees and Board as a whole and also the evaluation process for the same.
The statement indicating the manner in which formal annual evaluation of the Directors, the Board and Board level Committees are given in the Corporate Governance Report which forms part of this Annual
Report. The performances of the members of the Board, the Board level Committees and the Board as a whole were evaluated at the meeting of the Independent Directors and the Board of the Directors held on March 20, 2015.
Policy on Directors' appointment and remuneration
In compliance with the requirements of Section 178 of the Companies Act, 2013, the Nomination & Remuneration Committee of your Board had fixed various criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limits, qualification / experience, areas of expertise and independence of individual. The Committee had also approved in–principle that the initial term of an Independent Director shall not exceed 3 years. Your Company has also adopted a Nomination, Appointment, Remuneration and Training Policy, salient features whereof is annexed to this report.
Familiarisation Programme for Independent Directors
During the year under review, the Board including all Independent Directors were explained about their roles, rights and responsibilities in the Company through detailed presentations on the changes in backdrop of the Companies Act, 2013 and Listing Agreement. To familiarize the Directors with strategy, operations and functions of the Company, the senior managerial personnel make presentations about Company's strategy, operations, product offering, market, technology, facilities and risk management.
Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining their duties and responsibilities as a Director.
Committees of the Board
Currently, the Board has seven standing committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Budget Committee, Finance Committee, Cost evaluation and rationalization committee and Stakeholders' Relationship Committee. The Audit Committee of the Board comprises of 4 (Four) members, 3 (three) of whom are Independent Directors, with Mr. B.D. Narang, Non–Executive Independent Director, as its Chairman and Mr. Arun Duggal, Mr. Lakshmi Chand and Mr. Mintoo Bhandari as the members of the Audit Committee. A detailed note on the Board and its Committees is provided under the Report on Corporate Governance section.
The Board has adopted a Whistle Blower Policy (Vigil Mechanism) to provide opportunity to Directors/ Employees/Stakeholders of the Company to report concerns about unethical behavior, actual or suspected fraud of any Director and/or Employee of the Company or any violation of the Code of Conduct. Further during the year under review, no case was reported under the Vigil Mechanism.
Statutory Auditors: At the 26th Annual General Meeting of the Company held on September 29, 2014, Walker Chandiok & Co. LLP, Chartered Accountants, Gurgaon, having Registration No 001076N/N–500013 were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 29th Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of Walker Chandiok & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the Statutory Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
Secretarial Auditor: During the year, the Board appointed Mr. Jayant Gupta, Practicing Company Secretary, proprietor of M/s Jayant Gupta & Associates, Company Secretaries as the Secretarial Auditor of the Company for conducting the Secretarial Audit for the financial year 2014–15. The Secretarial Audit was carried out in compliance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The report of Statutory Auditor and/or Secretarial Auditor forming part of this Annual report does not contain any qualification, reservation or adverse remarks.
i. Particulars of Loans, guarantees and investments: Particulars of Loans, guarantees and investments made by the Company required under Section 186(4) of the Companies Act, 2013
are contained in Note no. 52 to the Standalone Financial Statements.
ii. Borrowings and Debt Servicing: During the year under review, your Company has met all its obligations towards repayment of principal and interest on loans availed.
iii. Transactions with Related Parties: None of the transactions with related parties fall under the scope of Section 188(1) of the Act. All Related
Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.
iv. Deposits: Your Company has not accepted any public deposit under Chapter V of the Companies Act, 2013.
v. Extract of Annual Return: The extract of Annual return in form MGT–9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report.
vi. Sexual Harassment: The Company has zero tolerance for Sexual Harassment at workplace and has adopted a Policy on prevention of Sexual Harassment in line with the provisions of Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redresssal) Act, 2013 and the Rules made there under. There was no complaint on sexual harassment during the year under review.
vii. Regulatory Orders: No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company's operations in future.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
Your Company is in the business of providing Direct–to– Home ('DTH') services. Since the said activity does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are not applicable. However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy consumption and every endeavor is made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.
In its endeavor to deliver the best to its viewers and business partners, your Company is constantly active in harnessing and tapping the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are given in Note no. 30, 31 and 32 to the notes to the Accounts forming part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Your Company has been successful in attracting best of the talent from industry and academic institutions and has been successful in retaining them. We hire for talent, passion and right attitude through latest recruitment and selection practices. We have established our reputation for being a vibrant learning organization driven by passion. We provides conducive and healthy climate with values of openness, enthusiasm, experimentation and collaboration. We deploy quality HR services to attract, develop, motivate and retain a diverse workforce with supportive work environment. The Company is committed to nurturing, enhancing and retaining talent through superior learning & Organization Development interventions.
Long term development of human capital and strategic deployment of retention tools is at the core of your Company's strategy. Your Company believes that committed employees are vital for the sustained growth of the Company. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your company has established policies and procedures to discover and use the employees' capabilities and potential to increase their commitment and contribution to the overall organization.
The Company has a robust appraisal system based on MBO (Management by Objectives) philosophy following a top down approach and open performance discussions. We encourage meritocracy and reward excellence in performance. The employees display highest level of business integrity and ethics in their business conduct.
PARTICULARS OF EMPLOYEES
As on March 31, 2015, the total numbers of employees on the records of the Company were 1020. The information required under Section 197 of the Companies Act, 2013 ('Act') read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under the said rules is annexed to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 134 of the Companies Act, 2013, as amended from time to time, in relation to the Annual Financial Statements for the Financial Year 2014–15, your Directors confirm the following:
a) The Financial Statements of the Company comprising of the Balance Sheet as at March 31, 2015 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same;
b) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015, and, of the profit of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;
d) Requisite internal financial controls were laid down and that such financial controls are adequate and operating effectively; and
e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
RISK MANAGEMENT SYSTEM & INTERNAL CONTROL SYSTEMS
Your company has an effective internal control and risk mitigation system, which is constantly assessed and strengthened with standard operating procedures and which ensures that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. The Company has laid down procedures to inform audit committee and board about the risk assessment and mitigation procedures, to ensure that the management controls risk through means of a properly defined framework. The internal control systems of your company ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.
Your Company has in place adequate internal financial controls with reference to financial statements. Based on internal financial control framework and compliance systems established in the Company, the work performed by statutory, internal and secretarial auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014–15. During the year, no reportable material weakness in the design or operation was observed.
Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.
The Company also has an Audit Committee, presently comprising of 4 (four) Non–Executive professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors, Cost Auditors and Auditees in dealing with matters within its terms of reference. The Committee inter alia deals with accounting matters, financial reporting and internal controls which also periodically reviews the Risk Management Process.
CRISIL, a Credit rating agency, has during the year under review assigned 'CRISIL A– / Stable (Assigned)' rating to the New Banking Facilities of the Company.
CARE (Credit Analysis and Research Limited), a Credit rating agency has revised the rating of Long– Term Bank Facilities of the Company from 'CARE BBB (Triple B)' to 'CARE A– (Single A minus)'. The revision in standalone rating of the Company factors in comfortable debt coverage metrics (Total Debt/GCA & Interest coverage ratio), availability of large unencumbered deposits (cash) to meet any contingencies and strong parentage.
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across the organization.
Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company's objectives, projections, estimates and expectations, may constitute 'forward looking statements' within the meaning of applicable laws and regulations and actual results might differ.
It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. Your Directors acknowledge with sincere gratitude the co–operation and support extended by the Central and State Governments, the Ministry of Information and Broadcasting ('MIB'), the Department of Telecommunication ('DOT'), Ministry of Finance, the Telecom Regulatory Authority of India ('TRAI'), the Stock Exchanges – and other stakeholders including employees, subscribers, vendors, bankers, investors, service providers as well as other regulatory and government authorities.
Your Board also takes this opportunity to express its deep gratitude for the continued co–operation and support received from its valued stakeholders.
For and on behalf of the Board
Jawahar Lal Goel
B D Narang
Date: 4 August 2015