You are here » Home » Companies » Company Overview » Den Networks Ltd

Den Networks Ltd.

BSE: 533137 Sector: Media
NSE: DEN ISIN Code: INE947J01015
BSE LIVE 15:40 | 20 Nov 92.30 0.45
(0.49%)
OPEN

92.75

HIGH

93.25

LOW

91.20

NSE 15:46 | 20 Nov 92.15 0
(0.00%)
OPEN

93.95

HIGH

93.95

LOW

91.00

OPEN 92.75
PREVIOUS CLOSE 91.85
VOLUME 11646
52-Week high 105.00
52-Week low 60.85
P/E
Mkt Cap.(Rs cr) 1,807
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 92.75
CLOSE 91.85
VOLUME 11646
52-Week high 105.00
52-Week low 60.85
P/E
Mkt Cap.(Rs cr) 1,807
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Den Networks Ltd. (DEN) - Auditors Report

Company auditors report

TO THE MEMBERS OF DEN NETWORKS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of DENNETWORKS LIMITED ("the Company") which comprise the Balance Sheet as at 31March 2017 and the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is suficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31March 2017 and its loss total comprehensive loss its cash flows andthe changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including (Other ComprehensiveIncome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "ANNEXUREA".Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements- Refer Note 31(b) to the standaloneInd AS financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses- Refer Note 48 to the standalone Ind ASfinancial statements.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company- Refer Note 52 to the standalone Ind ASfinancial statements.

iv. The Company has provided requisite disclosures in the standalone Ind AS financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated 8 November 2016 of the Ministry of Finance during in theperiod from 8 November 2016 to 30 December 2016. Based on audit procedures performed andthe representations provided to us by the management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe Management - Refer Note 14 B to the standalone Ind AS financial statements

2. As required by the Companies (Auditor's Report) Order 2016 ("theOrder"/"CARO 2016") issued by the Central Government in terms of Section143(11) of the Act we give in "ANNEXURE B" a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 015125N)
Alka Chadha
Place : Kolkata Partner
Date : 22 May 2017 (Membership No. 93474)

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DENNETWORKS LIMITED ("the Company") as of 31 March 2017 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is suficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of standalone Ind AS financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone Ind AS financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 015125N)
Alka Chadha
Place: Kolkata Partner
Date : 22 May 2017 (Membership No. 93474)

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph 2under ‘Report on Other Legal and Regulatory Requirements' section of our report ofeven date)

(i) In respect of its fixed assets (‘Property plant and equipment'):

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. The Company has a program of verification of fixed assets to cover all items in aphased manner over a period of three years other than set top boxes broadband customerpremises equipment (CPE) which are in possession of customers/ third parties anddistribution equipment comprising overhead and underground cables. Management is of theview that it is not possible to physically verify these assets due to their nature andlocation. Pursuant to the program certain fixed assets were physically verified by themanagement during the year. According to the information and explanations given to us theexistence of set top boxes and CPE installed at customer premises is verified on the basisof the ‘active user' status in the system. No material discrepancies were noticed onsuch verification.

In our opinion other than for physical verification of set top boxes broadbandcustomer premises equipment (CPE) and distribution equipment referred to above thefrequency of verification of fixed assets is reasonable having regard to the size of theCompany and the nature of its assets.

c. The Company does not have any immovable properties of freehold or leasehold land andbuilding and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies firms or other parties covered in theRegister maintained under Section 189 of the Companies Act 2013 in respect of which:

a. The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

b. The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

c. There is no amount overdue for more than 90 days at the balance sheet date.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public. The Company does not have any unclaimed depositsand accordingly the provisions of Sections 73 to 76 or any other relevant provisions ofthe Companies Act 2013 are not applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended and the Cost Records and Audit (Telecommunication Industry) Rules prescribed bythe Central Government under sub-section (1) of Section 148 of the Companies Act 2013and are of the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Value Added Tax cess and other material statutory dues applicable to itwith the appropriate authorities. According to the information and explanations given tous the Company's operations did not give rise to any Excise Duty.

b. There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Service Tax Customs Duty Value Added Tax cessand other material statutory dues in arrears as at 31 March 2017 for a period of morethan six months from the date they became payable other than the dues related toentertainment tax the details of which are given below:

Name of Statute Nature of Dues Amount involved (Rs. in million) Period to which the amount relates Due date
Delhi Entertain- ment Tax Act 1996 Entertain- ment Tax 8.52 April 2016 to Septem- ber 2016 Within 7 days from the expiry of each month

According to the information and explanations given to us the Company's operations didnot give rise to any Excise Duty.

c. Details of dues of Sales Tax Value Added Tax and Customs

Duty which have not been deposited as on 31 March 2017 on account of disputes aregiven below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount Unpaid (Rs. in million)
The Uttar Pradesh Value Added Tax Act 2008 Value added tax Deputy Commissioner April 2012 to March 2017 462.72
Bihar Value Added Tax Act 2005 Value added tax Deputy Commissioner of Commercial Tax April 2012 to March 2015 100.33
Karnataka Value Added Tax and CST Act 2003 Value added tax and Central Sales Tax Joint Commissioner of Commercial Tax (Appeals) April 2008 to March 2010 and April 2014 to March 2015 147.71
Karnataka Value Added Tax and CST Act 2003 Value added tax and Central Sales Tax High Court/Deputy Commissioner (Appeals) April 2010 to March 2011 35.27
Delhi Value Added Tax Act 2004 Value Added Tax Special Commissioner- Depart- ment of trade and taxes April 2014 to March 2015 0.40
Kerala Value Added Tax and CST Act 2003 Value added tax and Central Sales Tax Assistant Commissioner Appeals Commercial Taxes April 2011 to March 2013 and April 2015 to March 2016 190.63
Kerala Value Added Tax and CST Act 2003 Value added tax and Central Sales Tax High Court April 2013 to March 2014 31.75
Haryana Value Added Tax Act 2003 Value added tax Deputy Commissioner April 2015 to March 2016 -
Sub Total of Sales Tax and Value Added Tax 968.81*
Custom Act 1962 Custom Duty Directorate of Revenue Intelligence February 2012 to December 2016 130.14**

*Net of Rs. 94.03 million under protest.

**Net of Rs. 89.94 miilion under protest.

We are informed that there are no dues in respect of Income-tax and Service Tax whichhave not been deposited on account of any dispute. According to the information andexplanations given to us the Company's operations did not give rise to any Excise Duty.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company has not taken any loans or borrowing from governmentnor has it issued any debentures.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of term loans have been applied by the Company during the year for thepurposes for which they were raised other than temporary deployment pending application ofproceeds. The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments).

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone Ind ASfinancial statements etc. asrequired by the applicable accounting standards.

(xiv) According to the information and explanations given to us the Company has madepreferential allotment of shares during the year under review.

In respect of the above issue we further report that:

a. the requirement of Section 42 of the Companies Act 2013 as applicable have beencomplied with; and

b. the amounts raised have been applied by the Company during the year for the purposesfor which the funds were raised.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding subsidiary companies or associate company asapplicable or persons connected with them and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 015125N)
Alka Chadha
Place : Kolkata Partner
Date : 22 May 2017 (Membership No. 93474)