To the Members
Your Directors are pleased to present the 28th (Twenty Eighth) Annual Report coveringthe business and operations of the Company and the Annual Audited Financial Statements ofthe Company for the Financial Year ended March 31 2016.
The Financial Performance of your Company for the Financial Year ended March 31 2016is summarized below:
| ||( Rs In Lakhs) |
| ||Standalone Year Ended ||Consolidated Year Ended |
|Particulars ||Year ended ||Year ended ||Year ended ||Year ended |
| ||March 31 2016 ||March 31 2015 ||March 31 2016 ||March 31 2015 |
|Sales & Services ||222755 ||268795 ||305994 ||268795 |
|Other Income ||7847 ||5468 ||6404 ||6350 |
|Total Income ||230602 ||274263 ||312398 ||275145 |
|Total Expenses ||192890 ||274162 ||283446 ||274409 |
|Profit/(Loss) before Tax & Prior Period Item ||37712 ||101 ||28952 ||736 |
|Prior Period Item ||- ||- ||- ||- |
|Profit/(Loss) before Tax ||37712 ||101 ||69242 ||314 |
|Profit from continuing operations before tax ||37712 ||1253 ||- ||- |
|Profit/(loss) from discontinuing operations before tax ||- ||(1152) ||- ||- |
|- Current tax ||260 ||- ||3310 ||422 |
|- Deferred tax credit ||(4540) ||- ||(43600) ||- |
|Profit from continuing operations after tax ||41992 ||1253 ||- ||- |
|Profit/(loss) from discontinuing operations after tax ||- ||(1152) ||- ||- |
|Profit/(Loss) after Tax ||41992 ||101 ||69242 ||314 |
|Profit/(Loss) for the Year ||41992 ||101 ||69242 ||314 |
|Add: Balance brought forward ||(197862) ||(197225) ||(198019) ||(197594) |
|Adjustment for depreciation ||- ||(738) ||- ||(738) |
|Amount available for appropriations ||(155870) ||(197862) ||(128777) ||(198018) |
|Balance Carried Forward ||(155870) ||(197862) ||(128777) ||(198018) |
There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which affect the financial position ofthe Company.
The Board takes the pleasure to report that your Company becomes the first IndianDirect To Home (DTH) operator to have profits in the financial year. Withsustained focus on the business your Company has reported a profit of Rs 41992 lacsduring the financial year under review. Pursuant to Section 123 of the Companies Act 2013read with Companies (Declaration and Payment of Dividend) Rules 2014 a Company isrequired to set off accumulated losses of previous years / depreciation not provided inprevious years against profits of the current year before declaration of any dividend.Since there is an accumulated debit balance of Rs 155870 lacs in the profit and lossaccount of the Company hence no dividend is recommended for the year under review.
The year under review was a turnaround year for your Company with a record profit of Rs41992 lacs. The Company was able to achieve it because of sustained focus towards thegrowth with HD initiatives being the core of it and also by keeping a close eye on thecosts. The year under review continued to witness growth in gross revenue grosssubscribers EBITDA and net profit. With Digitization being in full swing TV viewingexperience of the audience will evolve further in times to come. The outcome willintegrate a diverse audience and pose multiple challenges and only those who ride with thesame pace will stay ahead of their competition. At Dish TV we understand the impact andutility of digitalization which shall enable audience to experience their favorite TVshows with highest quality possible. Dish TV has empowered and transformed entertainmentin India through the power of digitization offering more channels On Demand Services andInteractive Television Services. In addition it continues to ensure high quality of thereceived signal and uses a secure digital distribution system. Consumers can experiencenew improved services with enhanced quality.
Marking a paradigm shift in the world of entertainment Dish TV has launched a set ofinnovative services such as On demand services like Bhakti Active and Ibadat Activewhich offers a new approach to spirituality for Dish TV subscribers Music Active anadvertisement free all day music forum comprising of multi genre music. Worthy ofrecognition is the Miniplex Service launched by Dish TV offering biggest BollywoodBlockbusters to its subscribers. Dish TV continues to offer a wide array of multi-brandand multi product portfolio to suit the needs of different consumer segments. It has beena conscious effort of your the Company to lead on the content front for both HD and SDchannels. Continuing to push the HD growth with bouquet of 43 HD channels dishtruHD+ hastaken the HD TV viewing experience to the next level whilst also building a high-ARPU baseof HD users that helps in retention too. Evaluating the increase in trend on the usage ofrecording Dish TV now only offers recorder ready set-top boxes which allows Indianconsumers to taste the power of pause/play and other recording features. With theup-gradation of customers from Standard Definition (SD) to High Definition (HD) and uptakefrom new launches the Company expects to see an increasing trend in the ARPU. Theintroduction of long term offers on recharges will aid retention. The effort of Dish TVhas always been to make entertainment accessible in the most convenient ways to theconsumers. A few examples of such offerings are - DishOnline stemming from highpenetration of smart phones and internet. The Indian consumer today is spending increasingtime on alternate screens like the laptop tablet and smartphone away from theconventional TV viewing. Understanding the new dynamics of evolving consumer trends ofmulti-screen behavior this product provides LIVE TV on-demand movies catch-up TV andvideo shows at the press of a button on the app.
Dish TV has elevated the TV viewing experience to a whole new level with itsinteractive gaming service Games Active and Playin TV offering its subscribers excitingand interactive games. Dish TV through its strategic approach and correct marketevaluations has not only set standard but also has evolved to be a Pacesetter. During theyear under review Dish TV continued to engage subscribers by providing wholesomeentertainment experience through relevant content on demand services and the door stepservice and support. The positive effect of the steps taken by the Company coupled withthe continuous efforts to control the costs yielded positive results in all fronts of thebusiness. It also provided an edge over competition and the benefit of such serviceinfrastructure will yield benefit in coming years. Dish TV has always been a culture makerand High Definition seems to be the culture today. The need and time to transition is now.With the country rapidly advancing towards digitization there has been a simultaneousspurt in the category. This provides immense growth potential for the company.
SUBSIDIARIES AND JOINT VENTURE OPERATIONS Subsidiary in Sri Lanka
Your Company upon the approval of Board of Directors incorporated a Joint Venture(JV) Company with Satnet (Private) Limited a Company incorporated under theLaws of Sri Lanka in the name and style of Dish T V Lanka (Private) Limitedfor providing Direct to Home Services in Sri Lanka on April 25 2012 with a paid-up sharecapital of 1 million Sri Lankan Rupees. Your Company holds 70% of the paid-up sharecapital and Satnet (Private) Limited holds 30% of the paid-up share capital in Dish T VLanka (Private) Limited. Dish T V Lanka (Private) Limited has commenced the operationsunder the requisite licenses and permissions obtained from regulatory authorities. TheCompany has also been registered as a Board of Investment (BOI) approvedCompany in Sri Lanka. The registration with BOI grants various benefits to the Companyincluding duty free imports of the equipment and set top box for one year tax holiday of7 years etc.
Subsidiaries in India
Your Company upon the approval of Board of Directors and the Members of the Companyacquired the entire share capital of Xingmedia Distribution Private Limited(Xingmedia) on March 24 2014. Upon requisite approvals the name of Xingmediahas been changed to Dish Infra Services Private Limited (DishInfra).Post approval of Members of the Company by way of Special Resolution passedby Postal Ballot the non-core business of the Company (undertaking pertaining to theprovision of infra support services to the subscribers for facilitating the DTH servicesincluding the instruments which are required for receiving DTH signals such as set topboxes (STB) dish antenna Low Noise Boxes (LNB) and other customer related servicesincluding call centre services and repairs) has been transferred to Dish Infra with effectfrom April 1 2015. Dish Infra has commenced its commercial operations (including callcenter and back end support service to the Company) in the first quarter of the FinancialYear 2015-16. Upon nomination by the Company one Independent Director of the Board hasbeen appointed as an Independent Director on the Board of Dish Infra (Companysmaterial non-listed Indian Subsidiary) in compliance with the provisions of Regulation 24of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations).
Joint Venture in India
Your Company upon the approval of Board of Directors incorporated a Joint VentureCompany in the name and style C&S Medianet Private Limited on May 5 2016.C&S Medianet Private Limiteds initial paid up capital is Rs 100000. YourCompany holds 48% of the initial capital and Siti Cable Network Limited also hold 48% ofthe initial capital. The said Company shall act as a negotiating agency for Content/Advertisement Sales/ Carriage etc. for the television channel distribution industry (DTHand Cable). The said Company is yet to commence its operations.
Audited Accounts of Subsidiary Companies
Your Company has prepared the Audited Consolidated Financial Statements in accordancewith Section 129(3) of the Companies Act 2013 read with applicable Accounting Standardsand Listing Regulations 2015. The Statement pursuant to Section 129(3) of Companies Act2013 and Rule 5 of Companies (Accounts) Rules 2014 highlighting the summary of thefinancial performance of the subsidiaries is annexed to this Report. As required under theAccounting Standard-21 Consolidated Financial Statements issued by theInstitute of Chartered Accountants of India (ICAI) and applicable provisionsof the Listing Regulations the Audited Consolidated Financial Statements of the Companyreflecting the Consolidation of the Accounts of its subsidiaries are included in thisAnnual Report. Further a statement containing the salient features of the financialstatements of our subsidiaries in the prescribed format AOC -1 is appended to this report.In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of subsidiaries are available on the website of the Companyviz. www.dishtv.in. These documents will also be available for inspection during businesshours at the Registered Office of the Company.
Your Company has a policy for determining Material Subsidiaries. The Policy isdisclosed on the Companys website viz. www.dishtv.in and is accessible athttp://www. dishtv.in/Pages/Investor/Corporate-Governance.aspx
Your Companys fully paid up equity shares continue to be listed and traded onNational Stock Exchange of India Limited (NSE) and BSE Limited(BSE). Both these Stock Exchanges have nation-wide trading terminals and hencefacilitates the shareholders/investors of the Company in trading the shares. The Companyhas paid the annual listing fee for the Financial Year 2016-17 to the said StockExchanges.
The Company has also paid the annual maintenance fee to the Luxembourg Stock Exchangein respect of its Global Depository Receipts (GDR) for the year 2016.
Your Company has arrangements with National Securities Depository Limited(NSDL) and Central Depository Services (India) Limited (CDSL) theDepositories for facilitating the members to trade in the fully paid up equity shares ofthe Company in Dematerialized form. The Annual Custody fees for the Financial Year 2016-17has been paid to both the Depositories.
During the year under review your Company has allotted 293250 fully paid equityshares upon exercise of Stock Option by the eligible Employees of the Company pursuantto the Employee Stock Option Scheme - 2007 (ESOP - 2007) of the Company andthese 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 of518149592 equity shares of Rs 1 each issued at Rs 22 per share (including premium of Rs21 per share) payable in three installments. Upon receipt of valid first and second callmoney from the concerned shareholders during the year under review the Company converted10837 equity shares from Rs 0.50 each paid up to Rs 0.75 each paid up and 17447 equityshares from Rs 0.75 each paid up to Rs 1 each fully paid up. Pursuant to the issue offurther equity shares under ESOP scheme and subsequent to conversion of partly paid equityshares the paid up capital of your Company during the year has increased from Rs1065551110.75 (comprising of 1065519640 fully paid up equity shares of Rs1 each21993 equity shares of Rs 1 each paid up Rs 0.75 per equity share & 29952 equityshares of Rs 1 each paid up` 0.50 per equity share ) to Rs 1065851431.75 (comprisingof 1065830337 fully paid up equity shares of Rs1 each15383 equity shares of Rs 1each paid up 0.75 per equity share & 19115 equity shares of` Rs1 each paid up` 0.50per equity share ).
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014 as amended from time to time your Board had authorized theNomination and Remuneration Committee (formerly Remuneration Committee) toadminister and implement the Companys Employees Stock Option Scheme (ESOP 2007) including deciding and reviewing the eligibility criteria for grant and /or issuanceof stock options under the Scheme. The ESOP Allotment Committee of the Board considersreviews and allots equity shares to the eligible Employees exercising the stock optionsunder the Employee Stock Option Scheme (ESOP 2007) of the Company.
During the period under review the Nomination and Remuneration Committee (formerlyRemuneration Committee) of the Board granted 153200 stock options to theeligible Employees as per the ESOP 2007 of the Company. The Company during theyear allotted 293250 fully paid equity shares upon exercise of the stock options byeligible Employees under the ESOP 2007. Applicable disclosures relating toEmployees Stock Options as at March 31 2016 pursuant to SEBI (Share Based EmployeeBenefits) Regulations 2014 as amended from time to time are set out in the Annexure tothis Report and the details are also placed on the website of the Company athttp://www.dishtv.in/Pages/ Investor/Corporate-Governance.aspx. The ESOP-2007 Scheme ofthe Company is in compliance with SEBI (Share Based Employee Benefits) Regulations 2014Statutory Auditors certificate to the effect that the ESOP 2007 Scheme of theCompany has been implemented in accordance with the SEBI Guidelines and as per theresolution passed by the members of the Company as prescribed under Regulation 13 of theSEBI (Share Based Employee Benefits) Regulations 2014 has been obtained and shall beavailable for inspection at the Annual General Meeting of the Company. Copy of the sameshall also be available for inspection at the Registered Office of the Company on allworking days (Monday to Friday) between 2.00 P.M. to 4.00 P.M. up to the date of AnnualGeneral Meeting of the Company.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs 113992.91 Lacs the Company has received a sumof Rs 113986.35 Lacs towards the share application and call money(s) as at March 312016.
The details of utilization of Rights Issue proceeds are placed before the AuditCommittee and the Board on a quarterly basis. Further the Company also provides thedetails of the utilization of Rights Issue proceeds to IDBI Bank Limited the MonitoringAgency of the Company on half yearly basis along with Auditors Certificate onUtilization 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 ofusage of right issue proceeds. The utilization of rights issue proceeds as on March 312016 is as under:
|Particulars ||Amount |
| ||(Rs in Lakhs) |
|Repayment of loans ||28421.44 |
|Repayment of loans received after launch of the Rights Issue ||24300.00 |
|General Corporate Purpose ||34720.40 |
|Acquisition of Consumer Premises ||26000.00 |
|Equipment (CPE) || |
|Right Issue Expenses ||544.52 |
|Total ||113986.36 |
The half yearly Monitoring Reports issued by IDBI Bank Limited the Monitoring Agencyof the Company containing deviation from the original proposed expenditure plan and inaccordance with the approved revised plan was recorded by the Audit Committee and theBoard at their respective meetings and necessary compliance in this regard had beencarried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (GDR) Offer of the Company for 117035 GDRsat a price of US $ 854.50 per GDR each GDR representing 1000 fully paid equity shares ofthe 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 2016 NIL GDRs are outstanding theunderlying shares of which forms part of the existing paid up capital of the Company. Themanner of utilization of GDR proceeds as on March 31 2016 is as under:
|Particulars ||Amount |
| ||(Rs in Lakhs) |
|Acquisition of FA including CPE ||7669.88 |
|GDR Issue Expenses ||344.63 |
|Advance against Share Application || |
|Money given to erstwhile Subsidiary ||56.14 |
|Repayment of Bank Loans ||755.22 |
|Operation Expenses including interest payment bank charges exchange fluctuation ||21819.05 |
|Less: Interest earned-realized ||(439.94) |
|Balance with non-scheduled bank ||27570.40 |
|Total ||57775.37 |
NON CONVERTIBLE DEBENTURES
Your Company had issued and allotted 200 (Two Hundred Only) Rated Unlisted SecuredRedeemable Non-Convertible Debentures ("NCDs") of the Face value of Rs10000000/- (Rupees One Crores Only) each for cash aggregating to Rs2000000000/-(Rupees Two Hundred Crores Only) on Private Placement basis on October 12014. Pursuant to the Business Transfer Agreement dated February 25 2015 between theCompany and its Wholly owned subsidiary viz. Dish Infra Services Private Limited fortransfer of its Non-core business on a slump sale basis effective from April 1 2015 theCompany has inter alia novated its debt obligations (Non-Convertible debentures) to DishInfra Services Private Limited on the same terms and conditions. Accordingly the saidNon-Convertible debentures in the Company were extinguished along with all its obligationsas on the close of March 31 2015 and no NCDs are outstanding as on close of year underreview.
The Registered Office of the Company is presently situated at National CapitalTerritory of Delhi at Essel House B 10 Lawrence Road Industrial Area Delhi 110 035. The Board of Directors at their meeting held on August 12 2016approved shifting of the Registered Office of the Company to State of Maharashtra Mumbaifor ease of administration and cost effectiveness which shifting is subject to theapproval of the Shareholders and the appropriate authorities. The shift will bring inmanagement ease and efficiency and would in no way be detrimental to the interest of anymember of the public employees and associates of the Company in any manner. Afterobtaining the permission/approval of change of Registered Office from concernedauthority(ies) the Registered Office of the Company shall be shifted from Delhi toMumbai.
REGISTRAR & SHARE TRANSFER AGENT
During the first quarter of Calendar Year 2016 SEBI had issued an order dated March22 2016 inter alia restraining Sharepro Services (India) Pvt. Ltd. (Sharepro)from involving in market related activities. The SEBI had also required the clients ofSharepro to undertake an Assurance Audit. Further SEBI has also advised the clients ofSharepro to explore appointing another RTA in place of Sharepro. The Assurance Audit ofrecords and systems of Sharepro done at the behest of your Company by M/s. MKB AssociatesCompany Secretaries did not reveal any irregularity or violations with respect to transferof securities during the audit period. In terms of the order of the SEBI the AssuranceAudit Report was submitted to the Stock Exchanges.
Subsequently in pursuance of the advisory issued by SEBI vide Order dated March 222016 your Company has appointed M/s. Link Intime India Private Ltd. as the R&T Agentin place of Sharepro. The said changeover of R&T agent took place with effect fromJuly 1 2016.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Statement for the year under review as providedunder Listing Regulations is separately attached hereto and forms a part of this AnnualReport.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with requirements of Section 135 of the Companies Act 2013 your Companyhas constituted a Corporate Social Responsibility Committee (CSR Committee). The CSRCommittee comprises of two Independent Directors and the Managing Director. The Committeehas approved the CSR Policy with Education Health Care Women Empowerment and Sports asprimary focus area. Your Company shall spend at least 2% of the average net profits of theCompany made during the three immediately preceding Financial Years in pursuance of itsCorporate Social Responsibility Policy when the Company has average aggregate net profitsfor a period of three consecutive Financial Years. The details to the extent applicableas prescribed under Companies (Corporate Social Responsibility Policy) Rules 2014 areprovided as Annexure to this report.
During the year under review your Company sought the approval of the Shareholders onthe following matters vide Postal Ballot Notice dated February 3 2016:
Special Resolution under Section 4 and 13 of the
Companies Act 2013 for Amendments to Objects Clause of the Memorandum ofAssociation.
Special Resolution under Section 4 and 13 of the Companies Act 2013 forAmendment to Clause IV of the Memorandum of Association.
The said notice along with Postal Ballot Form and Business Reply Envelopes were dulysent to the Shareholders and your Company also offered E-Voting facility as an alternateoption for voting by the Shareholders which enabled them to cast their voteselectronically instead of Physical Postal Ballot Form. The result on the voting conductedthrough Postal Ballot process was declared on March 29 2016.
The procedure prescribed under Section 110 of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 was adopted for conducting thePostal Ballot. Further details related to the Postal Ballot procedure adopted votingpattern and result thereof have been provided under the General Meeting Section ofReport on Corporate Governance.
CORPORATE GOVERNANCE AND POLICIES
Corporate Governance is an ethically driven business process that iscommitted to values aimed at enhancing an organizations brand and reputation inorder to achieve the objectives of the organization transparently. This is ensured bytaking ethical business decisions and conducting business with a commitment to valueswhile meeting shareholders expectations. Your Company is committed to benchmarkingitself with the global standards of Corporate Governance. It has put in place an effectiveCorporate Governance system which ensures that provisions of the Act and ListingRegulations are duly complied with not only in form but also in substance.
Your Company believes that maintaining the highest standards of Corporate Governance isimperative in its pursuit of leadership in the Direct to Home (DTH) business.The Company continues to focus its resources strengths and strategies to achieve itsvision of continuing to be the leader in DTH Industry.
Your Company considers it an inherent responsibility to disclose timely and accurateinformation and also places high emphasis on best business practices and standards ofgovernance besides strictly complying with the requirements applicable Listing Regulationsand Companies Act 2013.
In terms of Schedule V of Listing Regulations a detailed report on CorporateGovernancealong with Compliance Certificate issued by the Statutory Auditors of theCompany is attached and forms an integral part of this Annual Report. ManagementDiscussion and Analysis Report and Business Responsibility Report as per ListingRegulations are presented in separate sections forming part of the Annual Report. The saidReports will also be available on the Companys website www.dishtv. in as part of theAnnual Report.
In compliance with the requirements of Companies Act 2013 and Listing Regulationsyour Board has approved various Policies including Code of Conduct for Directors
& Senior Management Material Subsidiary Policy Insider Trading Code DocumentPreservation Policy Material Event Determination and Disclosure Policy Fair DisclosurePolicy Corporate Social Responsibility Policy Whistle Blower and Vigil Mechanism PolicyRelated Party Transaction Policy and Remuneration Policy. All these policies and codeshave been uploaded on Companys website viz. www.dishtv.in and is accessible athttp://www.dishtv.in/Pages/Investor/ Corporate-Governance.aspx. Additionally DirectorsFamiliarisation Programme and Terms and Conditions for appointment of IndependentDirectors can be viewed on Companys website viz. www.dishtv.in.
In compliance with the requirements of Section 178 of the Companies Act 2013 theNomination & Remuneration Committee of your Board had fixed the criteria fornominating a person on the Board which inter alia include desired size and composition ofthe Board age limits qualification / experience areas of expertise and independence ofindividual. The Committee had also approved in-principle that the initial term of anIndependent Director shall not exceed 3 years.
The Audit Committee of the Board has been vested with powers and functions relating toRisk Management which inter alia includes (a) review of risk management policies andbusiness processes to ensure that the business processes adopted and transactions enteredinto by the Company are designed to identify and mitigate potential risk; (b) laying downprocedures relating to Risk assessment and minimization; and (c) formulationimplementation and monitoring of the risk management plan.
MATERIAL CHANGES AND COMMITMENTS
No material change and/or commitment affecting the financial position of your Companyhave occurred between April 1 2015 and the date of signing of this Report.
DIRECTORS & KEY MANAGERIAL PERSONNEL Directors
As on March 31 2016 your Board comprises of 7 Directors including 5 IndependentDirectors. During the year under review the Board had inducted Dr. Rashmi Aggarwal as anAdditional Independent Director with effect from May 26 2015. The Members of the Companyat their 27th Annual General Meeting held on September 29 2015 approved the appointmentof Dr. Rashmi Aggarwal as an Independent Director not liable to retire by rotation uptothe conclusion of 30th Annual General Meeting of the Company to be held in the Calendaryear 2018.
During the year under review Dr. Subhash Chandra
Non Executive Promoter Chairman Mr. Mintoo Bhandari Non ExecutiveNominee Director of Apollo India Private Equity II (Mauritius) Limited and Mr. UtsavBaijal Alternate Director to Mr. Mintoo Bhandari tendered their resignations fromthe close of business hours of October 27 2015. Your Board places on record itsappreciation for the contributions made by the aforementioned Directors. Further uponresignation of the Chairman of the Board the Board of Directors of your Company nominatedMr. Jawahar Lal Goel as the Chairman of the Board.
Mr. Ashok Kurien Non-Executive Director is liable to retire by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment. YourBoard recommends his reappointment.
Mr. Jawahar Lal Goel the Managing Director of the Company was elevated as the Chairmanof the Company with effect from October 27 2015 consequent to resignation of Dr. SubhashChandra as Chairman and Non-Executive Promoter Director.
During the tenure of Mr. Goel as Managing Director the Company has continuouslymaintained strong growth in terms of revenue as well as continued its stronghold on theDirect To Home (DTH) market share. Under the leadership of Mr. Goel the Company becamethe First DTH operator of this Country to become Profitable. The Company has madeconsiderable progress in all the spheres and has achieved tremendous growth and acquiredgoodwill and reputation in the business. Mr. Goel has spearheaded the organization withstrong zeal and commitment despite strong competitive intensity rise of digital cablenetwork regulatory challenges and technological upheavals.
Mr. Goel has led your Company in a highly competitive and volatile market to not justconsolidate its market leadership but also is shaping the future of your Company into amodern technology & innovation-driven organisation.
As on March 31 2016 your Board comprises of 7 Directors including 5 IndependentDirectors. The Company recognizes and embraces the importance of a diverse Board in itssuccess. The Board has also adopted the Board Diversity Policy.
The Board met six times during the Financial Year the details of which are given inthe Corporate Governance Report which forms part of this Annual Report. The interveninggap between any two meetings was within the period prescribed by the Companies Act 2013and Listing Regulations.
Declaration by Independent Directors
Independent Directors of the Company provide declarations both at the time ofappointment and annually confirming that they meet the criteria of independence asprescribed under Companies Act 2013 and the Listing Regulations.
Key Managerial Personnel
During the year under review Mr. Rajagopal Chakravarthi Venkateish Chief ExecutiveOfficer Key Managerial Personnel of the Company resigned from the Company from the closeof business hours of October 31 2015. Your Board places on record its appreciation forthe contributions made by Mr. Venkateish. Based on the recommendations by the Nominationand Remuneration Committee your Board appointed Mr. Arun Kumar Kapoor as the ChiefExecutive Officer of the Company with effect from November 23 2015. In compliance withthe requirements of Section 203 of the Companies Act 2013 Mr. Jawahar Lal Goel ManagingDirector and Chairman Mr. Arun Kumar Kapoor Chief Executive Officer Mr. Rajeev KumarDalmia Chief Financial Officer and Mr. Ranjit Singh Company Secretary of the Company areKey Managerial Personnel of the Company.
The Independent Directors of your Company in a separate meeting held without presenceof other Directors and management evaluated the performance of the Chairman &Managing Director and other Non-Independent Directors along with performance of theBoard/Board Committees based on various criteria recommended by Nomination &Remuneration Committee. A report on such evaluation done by the
Independent Directors was taken on record by the Board and further your Board incompliance with requirements of Companies Act 2013 evaluated performance of allIndependent Directors based on various parameters including attendance contribution etc.
Policy on Directors appointment and remuneration
In compliance with the requirements of Section 178 of the Companies Act 2013 theNomination & Remuneration Committee (NRC Committee) of your Board hadfixed the criteria for nominating a person on the Board which inter alia include desiredsize and composition of the Board age limit qualification/experience areas of expertiseand independence of individual. The Committee had also approved in-principle that theinitial term of an Independent Director shall not exceed 3 years. Your Company has alsoadopted a Nomination Appointment Remuneration and Training Policy salient featureswhereof is annexed to this report.
Further pursuant to provisions of the Act the NRC Committee of your Board hasformulated the Remuneration Policy for the appointment and determination of remunerationof the Directors Key Management Personnel Senior Management and other Employees of yourCompany. The NRC Committee has also developed the criteria for determining thequalifications positive attributes and independence of Directors and for making paymentsto Executive Directors of the Company.
The NRC Committee takes into consideration the best remuneration practices in theindustry while fixing appropriate remuneration packages and for administering thelong-term incentive plans such as ESOPs. Further the compensation package of theDirectors Key Management Personnel Senior Management and other employees are designedbased on the set of principles enumerated in the said policy. Your Directors affirm thatthe remuneration paid to the Directors Key Management Personnel Senior Management andother employees is as per the Remuneration Policy of your Company.
Familiarisation Programme for Independent Directors
During the year under review to familiarize the Directors with strategy operationsand functions of the Company the senior managerial personnel made presentations aboutCompanys strategy operations product offering market technology facilities andrisk management. The Directors were also provided with relevant documents reports andinternal policies to enable them to familiarise with your Companys procedures andpractices from time to time besides regular briefing by the members of the seniorleadership team.
Also the Board including all Independent Directors were given a detailed presentationon February 3 2016 by S. R. Batliboi & Co. LLP on the various aspects of CompaniesAct 2013 Roles and responsibilities of Directors road map and key issues of Ind-AS andIncome Computation disclosure standards.
Further at the time of appointment of an Independent Director the Company issues aformal letter of appointment outlining their duties and responsibilities as a Director.Detail of familiarisation program organized for Independent Directors during FY underreview form part of Corporate Governance Report annexed hereto and are also posted on theCompanys website www.dishtv. in and can be viewed on the following link:http://www. dishtv.in/Pages/Investor/Corporate-Governance.aspx.
Committees of the Board
Currently the Board has seven standing committees viz. Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee ESOP Allotment Committee Finance Committee and Cost evaluationand rationalization committee. The Audit Committee of the Board comprises of 3 (Three)members all being Independent Directors with Mr. B.D. Narang Non-Executive IndependentDirector as its Chairman and Mr. Arun Duggal and Mr. Lakshmi Chand as the members of theAudit Committee. During year under review all recommendations of the Audit Committee wereaccepted by the Board of Directors of the Company. Details of the constitution of theseCommittees which are in accordance with regulatory requirements have been uploaded onthe website of the Company viz. www.dishtv.in. A detailed note on the Board and itsCommittees is provided under the Report on Corporate Governance section.
The Board has adopted a Whistle Blower Policy (Vigil Mechanism) to provide opportunityto Directors/ Employees/Stakeholders of the Company to report concerns about unethicalbehavior actual or suspected fraud of any Director and/or Employee of the Company or anyviolation of the Code of Conduct. Further during the year under review no case wasreported under the Vigil Mechanism.
AUDITORS Statutory Auditors
At the 26th Annual General Meeting of the Company held on September 29 2014 WalkerChandiok & Co. LLP Chartered Accountants Gurgaon having Registration No.001076N/N-500013 were appointed as the Statutory Auditors of the Company to hold officetill the conclusion of the 29th Annual General Meeting. In terms of the first proviso toSection 139 of the Companies Act 2013 the appointment of the Auditors shall be placedfor ratification at every Annual General Meeting. Accordingly the appointment of WalkerChandiok & Co. LLP Chartered Accountants as Statutory Auditors of the Company isplaced for ratification by the Shareholders. In this regard the Company has received aneligibility certificate from the Statutory Auditors to the effect that the ratification oftheir appointment would be in accordance with Sections 139 and 141 of the Act. Your Boardis of the opinion that continuation of Walker Chandiok & Co. LLP CharteredAccountants as Statutory Auditors during and for certifying the financial statements forFY 2016-17 will be in the best interests of the Company and therefore Members arerequested to consider the ratification of their appointment as Statutory Auditors of theCompany for signing financial statements and issue reports for the period ending March 312017. The ratification proposed is within the time frame for transition as provided underthe third proviso to sub-section (2) of Section 139 of Companies Act 2013.
During the year the Board re-appointed Mr. Jayant Gupta Practicing Company Secretaryproprietor of M/s Jayant Gupta & Associates Company Secretaries as the SecretarialAuditor of the Company for conducting the Secretarial Audit for the financial year2015-16. The Secretarial Audit was carried out in compliance with Section 204 of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
The reports of Statutory Auditor and Secretarial Auditor forming part of this Annualreport do not contain any qualification reservation or adverse remarks. During the yearthe Statutory Auditors have not reported any matter under Section 143 (12) of the Acttherefore no detail is required to be disclosed under the applicable provisions of theAct.
i. Particulars of Loans guarantees and investments:
Particulars of Loans guarantees and investments made by the Company required underSection 186(4) of the Companies Act 2013 are contained in Note No. 49 to the StandaloneFinancial Statement.
ii. Borrowings and Debt Servicing: During the year under review your Companyhas met all its obligations towards repayment of principal and interest on loans availed.
iii. Transactions with Related Parties: None of the transactions with relatedparties fall under the scope of Section 188(1) of the Act. All Related Party Transactionsentered during the year were in Ordinary Course of the Business and on Arms Lengthbasis. No Material Related Party Transactions i.e. transactions exceeding ten percent ofthe annual consolidated turnover as per the last audited financial statements wereentered during the year by your Company. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3) (h) of the Companies Act 2013 in Form AOC 2is not applicable.
iv. Deposits: Your Company has not accepted any public deposit under Chapter Vof the Companies Act 2013.
v. Extract of Annual Return: The extract of Annual return in form MGT-9 asrequired 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 atworkplace and has adopted a Policy on prevention of Sexual Harassment in line with theprovisions of The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redresssal) Act 2013 and the Rules made thereunder. There was no complaint onsexual harassment during the year under review.
vii. Regulatory Orders: No significant or material orders were passed by theregulators or courts or tribunals which impact the going concern status and Companysoperations 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 theInformation required to be provided under Section 134(3)(m) of the Companies Act 2013read with the Companies (Accounts) Rules 2014 are not applicable. However theinformation as applicable are given hereunder:
Conservation of Energy:
Your Company being a service provider requires minimal energy consumption and everyendeavor is made to ensure optimal use of energy avoid wastages and conserve energy asfar as possible.
In its endeavor to deliver the best to its viewers and business partners your Companyis constantly active in harnessing and tapping the latest and best technology in theindustry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are given in NoteNo. 29 30 and 31 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 andacademic institutions and has been successful in retaining them. We hire for talentpassion and right attitude through latest recruitment and selection practices. We haveestablished our reputation for being a vibrant learning organization driven by passion. Weprovide conducive and healthy climate with values of openness enthusiasm experimentationand collaboration. We deploy quality HR services to attract develop motivate and retaina diverse workforce with supportive work environment. The Company is committed tonurturing enhancing and retaining talent through superior learning & OrganizationDevelopment interventions.
Long-term development of human capital and strategic deployment of retention tools isat the core of your Companys strategy. Your Company believes that committedemployees are vital for the sustained growth of the Company. The Company takes pride inthe commitment competence and dedication shown by its employees in all areas of business.Your Company has established policies and procedures to discover and use theemployees capabilities and potential to increase their commitment and contributionto 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 encouragemeritocracy and reward excellence in performance. The employees display highest level ofbusiness integrity and ethics in their business conduct. Your Directors place on recordtheir appreciation for the significant contribution made by all employees whothroughtheir competence dedication hard work co-operation and support have enabled the Companyto cross new milestones on a continual basis.
PARTICULARS OF EMPLOYEES
As on March 31 2016 the total numbers of employees on the records of the Company were388. The information required under Section 197 of the Companies Act 2013(Act) read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 along with statement showing names and other particulars of theemployees drawing remuneration in excess of the limits prescribed under the said rules isannexed to this report.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 134 of the Companies Act 2013 as amended fromtime to time in relation to the Annual Financial Statements for the Financial Year2015-16 your Directors confirm the following:
a) The Financial Statements of the Company - comprising of the Balance Sheet as atMarch 31 2016 and the Statement of Profit & Loss for the year ended on that datehave been prepared on a going concern basis following applicable accounting standards andthat no material departures have been made from the same;
b) Accounting policies selected were applied consistently and the judgments andestimates related to the financial statements have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2016 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 accountingrecords in accordance with the provisions of the Act to safeguard the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) Requisite internal financial controls were laid down and that such financialcontrols are adequate and operating effectively; and
e) Proper systems have been devised to ensure compliance with the provisions of allapplicable 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 isconstantly assessed and strengthened with standard operating procedures and which ensuresthat all the assets of the Company are safeguarded and protected against any loss and thatall the transactions are properly authorized and recorded. The Company has laid downprocedures to inform audit committee and board about the risk assessment and mitigationprocedures to ensure that the management controls risk through means of a properlydefined framework. The internal control systems of your Company ensures that all assetsare safeguarded and protected against loss from unauthorized use or disposition and thosetransactions are authorized recorded and reported correctly.
Your Company has in place adequate internal financial controls with reference tofinancial statements. Based on internal financial control framework and compliance systemsestablished in the Company the work performed by statutory internal and secretarialauditors and reviews performed by the management and/or relevant Audit and otherCommittees of the Board your Board is of the opinion that the Companys internalfinancial controls were adequate and effective during the financial year 2015-16. Duringthe 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 otherrecords are reliable for preparing financial and other statements and for maintainingaccountability of assets.
The Company also has an Audit Committee presently comprising of 3 (three)Non-Executive professionally qualified Directors who interact with the StatutoryAuditors Internal Auditors and Auditees in dealing with matters within its terms ofreference. The Committee inter alia deals with accounting matters financial reporting andinternal controls which also periodically reviews the Risk Management Process.
INSIDER TRADING CODE
In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 (the PIT Regulations) on prevention of insidertrading your Company had instituted a comprehensive Code of Conduct for regulatingmonitoring and reporting of trading by Insiders. The said Code lays down guidelines whichadvise Insiders on the procedures to be followed and disclosures to be made in dealingwith the shares of the Company and cautions them on consequences of non-compliances.
Your Company has further put in place a Code of practices and procedures of fairdisclosures of unpublished price sensitive information. Both the aforesaid Codes are inline with the PIT Regulations.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report (BRR) has been prepared and forms partof the Annual Report as Annexure. The Report provides an overview of initiatives taken byyour Company.
ICRA Limited a Credit rating agency has during the year under review assigned ICRAA+(ICRA A plus) rating for the Loan Term Loans and ICRAA+ / ICRAA1 long-term/ short-terminterchangeable bank facilities of Companys wholly owned subsidiary viz. Dish InfraServices Private Limited. Instruments with this rating are considered to have very strongdegree of safety regarding timely payment of financial obligations. Such instruments carrylower credit risk.
CARE (Credit Analysis and Research Limited) a Credit rating agency has enhanced therating of Long-Term/ Short Term Bank Facilities of the Company to CARE A+(SO) /A1+(SO).Instruments with this rating are considered to have very strong degree of safety regardingtimely payment of financial obligations. Such instruments carry lower credit risk.
The Company maintained healthy cordial and harmonious industrial relations at alllevels. The enthusiasm and unstinting efforts of the employees have enabled the Company toremain at the leadership position in the industry. It has taken various steps to improveproductivity across the organization.
Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Companys objectives projections estimates andexpectations may constitute forward looking statements within the meaning ofapplicable laws and regulations and actual results might differ.
It is our strong belief that caring for our business constituents has ensured oursuccess in the past and will do so in future. Your Directors acknowledge with sinceregratitude the co-operation and support extended by the Central and State Governments theMinistry of Information and Broadcasting (MIB) the Department ofTelecommunication (DOT) Ministry of Finance the Telecom Regulatory Authorityof India (TRAI) the Stock Exchanges - and other stakeholders includingemployees subscribers vendors bankers investors service providers as well as otherregulatory and government authorities. Your Board also takes this opportunity to expressits deep gratitude for the continued co-operation and support received from its valuedstakeholders.
For and on behalf of the Board
|Jawahar Lal Goel ||Arun Duggal |
|Managing Director ||Independent Director |
|DIN: 00076462 ||DIN: 00024262 |
|Place: Noida || |
|Date: August 12 2016 || |
Annexure to Directors report
Statement containing salient features of the financial statement of Subsidiaries orAssociate Companies or Joint Ventures as on March 31 2016 in Form AOC I
(Pursuant to first proviso to sub-Section (3) of Section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
( Rs in Lakhs)
|Name of the subsidiary ||Dish Infra Services Private Limited (formerly known as Xingmedia Distribution Private Limited) ||Dish T V Lanka (Private) Limited |
|Date since when subsidiary was acquired ||March 24 2014 ||April 25 2012 |
|Reporting period for the subsidiary concerned if different from the holding companys reporting period. ||March 31 2016 ||March 31 2016 |
|Reporting currency and Exchange rate as on March 31 2016 in case of ||INR ||Sri Lankan Rupees (LKR) 1 Sri Lankan Rupee = Rs 0.43691 |
|Foreign Subsidiaries || || |
|Share capital ||11801 ||4 |
|Reserves & surplus ||30986 ||(2948) |
|Total Assets ||293648 ||4254 |
|Total Liabilities ||293648 ||4254 |
|Investments ||8203 ||NIL |
|Turnover ||105445 ||851 |
|Profit before taxation ||(5667) ||(2149) |
|Provision for taxation ||(36010) ||0 |
|Profit after taxation ||30343 ||(2149) |
|Proposed Dividend ||NIL ||NIL |
|Extent of Shareholding (In ||100% ||70% |
|Percentage) || || |
Dish T V Lanka (Private) Limited is a Company incorporated in Sri Lanka.
The Company does not have any Associate / Joint Venture as on March 31 2016.
For and on behalf of the Board
| ||Jawahar Lal Goel ||Arun Duggal |
| ||Managing Director ||Independent Director |
| ||DIN: 00076462 ||DIN: 00024262 |
|Place: Noida || || |
|Dated: August 12 2016 || || |