Your Directors are pleased to present the 70th (Seventieth) Annual Reporttogether with the Audited Accounts and Auditors Report for the Financial Year ended on 31stMarch 2017.
SUMMARY OF FINANCIAL RESULTS
The Company's fi nancial results for the year ended 31st March 2017 issummarized below: -
| || |
(Rs. In millions)
|Particulars ||For the year ended March 31 ||For the year ended March 31 |
| ||2017 ||2016 |
|I. Revenue from operations ||5277.92 ||5583.72 |
|II. Other Income ||34.49 ||44.58 |
|III. Total Income(I+II) ||5312.41 ||5628.31 |
|IV. Expenses || || |
|Networks operation Expenditure ||3744.97 ||3791.32 |
|Employee Benefi ts Expenses ||724.31 ||741.61 |
|Sales & Marketing Expenditure ||303.93 ||283.58 |
|Finance Cost ||289.16 ||272.98 |
|Depreciation and Amortization Expenses ||1178.63 ||1334.00 |
|Other Expenses ||592.19 ||552.91 |
|Total Expenses ||6833.19 ||6976.40 |
|V. Profi t/(Loss) before exceptional and extraordinary items and tax (III-IV) ||(1520.77) ||(1348.10) |
|VI. Exceptional Item ||- ||- |
|VII. Profi t/(Loss) before extraordinary items and tax (V-VI) ||(1520.77) ||(1348.10) |
|VIII. Extraordinary items ||- ||- |
|IX. Profi t/(Loss) before tax (VII-VIII) ||(1520.77) ||(1348.10) |
|X. Tax expenses || || |
|(1) Current Tax ||- ||- |
|(2) Deferred Tax ||- ||- |
|XI. Profi t (Loss) for the period from ||(1520.77) ||(1348.10) |
|continuing operations (IX-X) || || |
|XII. Profi t/(Loss) from discontinuing operations ||- ||- |
|XIII. Tax expenses of discontinuing operations ||- ||- |
|XIV. Profi t/(Loss) from Discontinuing operations (after tax)(XII-XIII) ||- ||- |
|XV. Profi t /(Loss) for the period(XI-XIV) ||(1520.77) ||(1348.10) |
FINANCIAL PERFORMANCE REVIEW
The Company's revenue declined by 5.48% from Rs.5583.72 million in 2015-16 toRs.5277.92 million in 2016-17. Consequently the operating losses increased fromRs.1348.10 million during 2015-16 to Rs. 1520.77 million during the year ended 31.03.2017.
However the total expenses during 2016-17 decreased to Rs. 6833.19 Million as againstto Rs.6976.40 million in the previous year.
Your Company holds Unifi ed Access Services License (UAS License) and ISP LicenceCategory-A for providing Telephony Services in the Punjab Telecom Service Area comprisingof the State of Punjab Union Territory of Chandigarh and Panchkula Town of Haryana.
GSM Business of the Company was in continuous losses which increased further due tolaunch of 4G services by leading competitors in the market who are offering free talktime and data so in order to sustain and curtail the losses the Company has decided todiscontinue its GSM Services from the midnight of 15th February 2017. Howeverswitches were kept operational to facilitate Mobile Number Portability (MNP) to GSMsubscribers of the Company till 18th April 2017 as per the directions/advicereceived from TRAI vide its letter dated 17th February 2017.
Currently the Portfolio of services provided by the Company includes Fixed Voice(Landline) services DSL (Internet) services and Leased Line services in the PunjabTelecom Circle.
The Company provides broadband services through its fi ber optic cable laid acrossPunjab and the Company has also entered into co-location agreements with other operatorsin order to expand its network.
As at 31.03.2017 the Company had a total subscriber base of 468018 customersincludes 262891 fi xed-line customers and 205127 Broadband Customers.
During the year various marketing initiatives were taken in order to enhance the brandvisibility through various programs such as Young Munch Contest Connect Super JodiContest etc in order to connect to and reach out to a larger segment of the populaceespecially the younger segment of society.
CORPORATE DEBT RESTRUCTURING SCHEME (CDR SCHEME)
The Corporate Debt Restructuring Cell (CDR Cell) had vide its letterno.CDR(JCP)563/2009-10 dated August 13 2009 approved a Corporate Debt RestructuringPackage (CDR Package) for the company in order to write off the losses and also to enablethe company to service its debts. As of March 31 2017 the Company has duly complied withall the terms and conditions as stipulated in the CDR Package. However due to continuouslosses and fi nancial constraints the Company has defaulted/delayed in the interestpayments accrued towards Lenders on account of Secured Non-Convertible Debentures (NCDs)issued to Lenders as per CDR terms for the period January 2017 to April 2017 andprincipal repayment of Secured NCDs accrued for the month of April 2017 and May 2017till the date of signing of this report. The Company is in discussions with Lenders forappropriate recourse in the matter.
EQUITY SHARE CAPITAL AND LISTING OF SHARES
The paid-up Equity share capital of the Company is Rs.612260268/- comprising of612260268 equity shares of Re.1/- each. The Company's shares are listed on BSE Limitedand are actively traded.
STATUS UPDATE ON SHIFTING OF REGISTERED OFFICE OF THE COMPANY
Board of Directors of the Company in its meeting held on 27th May 2016 approved theshifting of Registered Offi ce of the Company from Autocars Compound Adalat RoadAurangabad - 431 005 Maharashtra to B-71 Industrial Area Phase VII Mohali Punjab andthe same was also subsequently approved by the shareholders of the Company on 21st July2016. As per the provisions of the Companies Act 2013 the Company has fi led thepetition/application with Regional Director Western Region Mumbai on 9th January 2017.The Company's Petition /Application is under review for approval with Regional Director.
No material changes and commitments affecting the fi nancial position of the Companyoccurred between the end of the fi nancial year of the Company i.e. 31st March2017 and till the date of signing of this Report i.e. May 23 2017.
Further there were no signifi cant and material orders passed by the regulators orcourts or tribunals impacting the going concern status and Company's operations in future.
As on 31.03.2017 the Company had accumulated losses. Your Directors therefore havenot recommended any dividend for the fi nancial year 2016-17.
TRANSFER TO RESERVES
During the year under review no amount has been transferred to reserves.
ISSUE OF DEBENTURES
During the year under review the Company issued 12000000 (One Crore Twenty Lakh)Unsecured Zero Coupon Compulsorily Convertible Debentures of face value of Rs. 1000/-(Rupees One Thousand Only) each convertible into 120000000 (Twelve Crore) 2%Non-Cumulative Non-Convertible Redeemable Preference Shares of face value of Rs. 100/-(Rupees One Hundred Only) each for an amount not exceeding Rs. 12000000000/- (RupeesTwelve Hundred Crore Only) to Videocon Telecommunications Limited pursuant to conversionof Advances made by Videocon Telecommunications Limited from time to time in compliancewith CDR Package. Extracts of the terms and conditions of issue of aforesaid Debenturesforms part of the Corporate Governance Report.
Your Company has not accepted / renewed any deposits within the meaning of Section 73of the Companies Act 2013 and as such no amount of principal or interest was outstandingas on the Balance Sheet date.
HUMAN RESOURCE DEVELOPMENT
Human Resource Development is considered to be vital in any organisation for theeffective implementation of its business plans. Constant endeavors' are being made by theCompany through various HR policies and processes aimed for professional growth andopportunities and recognitions of the employees in order to effectively motivate theemployees at all levels in the drive for growth and expansion of the business. Regularinnovative programs for learning and development are also drawn up constantly in order tocreate an encouraging and conducive work environment for empowering the employees at alllevels and maintaining a well structured reward and recognition mechanism. The Companyencourages its employees to strengthen their entrepreneurial skills in order to enhancethe Organization's productivity and creativity.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company being in the telecommunications sector is not involved in carrying on anymanufacturing activity; accordingly the information required under Section 134(3)(m) ofthe Act read with Rule 8(3) of the Companies (Accounts) Rules 2014 with respect toConservation of Energy Technology Absorption and Foreign Exchange earnings/ outgo are notapplicable. However the following information would give adequate idea of the continuousefforts made by the Company in this regard:
(i) Energy Conservation:
(a) Electricity is used for the working of the Company's telephone exchanges and othernetwork infrastructure equipment. The
Company regularly reviews power consumption patterns across its network and implementsrequisite changes in the network or processes in order to optimize power consumption andthereby achieve cost savings.
(b) Reduction in the running of the Diesel Generator (DG) Sets during power cuts it itsvarious tower sites.
(ii) Technology Absorption: The Company has not imported any technology. TheCompany has not yet established separate Research & Development facilities.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year there were no foreign exchange earnings; the total foreign exchangeoutgo was to the tune of Rs.130.49 millions which was on account of Import of CapitalEquipment fi nance charges and travel expenses.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is appended as Annexure-2 to the Board's Report.
The Company does not have any employee whose particulars are required to be furnishedunder Section 197 of the Companies Act 2013 read with Rule 5(2) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
The remuneration paid to all Key Managerial Personnel is in accordance withremuneration policy adopted by the Company.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The details in respect of internal fi nancial control and their adequacy are includedin the Management Discussion & Analysis which forms part of this report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including Directors of the Company to report genuine concerns. Theprovisions of this policy are in line with the provisions of Section 177(9) of theCompanies Act 2013 and the Regulation 22 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (URL: http://www.connectzone.in/corporate_governance.php).
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of the Act and Rule 12 of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT-9 is provided inAnnexure-1 which forms part of this report.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated a Policy on Related PartyTransactions and the same is posted on the Company's URL: http://www.connectzone.in/corporate_governance.php Information on transaction with related parties pursuant toSection 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014is not provided since there are no related party transactions with related party during financial year 2016-17.
CORPORATE SOCIAL RESPONSIBILTY
In terms of the provisions of Section 135 read with Schedule VII and the Rule madethereunder every Company having net-worth of Rs. 500 Crore or turnover of Rs.1000 Croreor Net Profi t of Rs.5 Crore is required to constitute Corporate Social ResponsibilityCommittee.
The Company does not meet any of the above criteria. As such the Company is notrequired to constitute Corporate Social Responsibility Committee and comply with therequirements of Section 135 read with Schedule VII and the Rules made thereunder.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the period under review the Company has not provided any loan guarantee orinvestment pursuant to the provisions of Section 186 of the Companies Act 2013.
The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In a separate meeting of independent Directors performance ofnon-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of Independent directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the independent Directors at which the performance of the Board itscommittees and individual directors was also discussed.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry. The familiarization programme adopted by the Companyis posted on the website of the Company's URL: http://www.connectzone.in/corporate_governance.php
REMUNERATION POLICY FOR THE DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In terms of the provisions of Section 178(3) of the Act and under Regulation 19 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Nomination& Remuneration Committee (NRC) is responsible for formulating the criteria fordetermining qualifi cation positive attributes and independence of Directors. The NRC isalso responsible for recommending to the Board a policy relating to the remuneration ofthe Directors Key Managerial Personnel and other employees.
In line with this requirement the Board has adopted the Policy relating to theremuneration of the Directors Key Managerial Personnel and other employees and the samehas been disclosed in the Corporate Governance Report which forms part of the Directors'Report. The same is also available on the Company's website URL: http://www.connectzone.in/corporate_governance.php
NUMBER OF MEETING OF THE BOARD
Seven Meetings of the Board were held during the year. For details of the meetings ofthe Board please refer to the Corporate Governance Report which forms part of thisreport.
THE DETAILS OF DIRECTORS WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR
During the year under review Mr. Rahul Amarnath Sethi resigned from the Directorshipof the Company w.e.f. March 10 2017 and Mr. Arvind Ramnath Somani appointed asIndependent Director in place of Mr. Rahul Amarnath Sethi pursuant to the provisions ofSection 149 of the Companies Act 2013 for a term of fi ve consecutive years w.e.f. March29 2017.
In terms of the provisions of Section 152 (6) of the Companies Act 2013 and the Rulesmade there under Ms. Mitu Mehrotra Goel Director retires by rotation and being eligiblehas offered herself for re-appointment. The Board recommends her re-appointment at theensuing Annual General Meeting.
A brief profi le of Directors seeking confi rmation/appointment nature of expertise inspecifi c functional area name of other companies in which they holds Directorship(s) andMembership(s)/ Chairmanship(s) of the Committees of the Board of Directors and theparticulars of the shareholding as stipulated under Regulation 36 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the Notice.During the year the non-executive director of the Company had no pecuniary relationshipor transactions with the Company.
THE DETAILS OF KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THEYEAR
No change took place in Key Managerial Personnel for the period under review and tillthe date of signing of this Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all Independent Directors of theCompany Confi rming that they meet with the criteria of independence as prescribed undersection 149 of the Companies Act 2013 and Regulation 25 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Rulesframed thereunder the Company had on 30th September 2014 appointed M/sKhandelwal Jain & Co. Chartered Accountants (Firm Registration No.105049W) asStatutory Auditors of the Company for a period of 5 years from the conclusion of SixtySeventh (67th) Annual General Meeting of the Company until the conclusion ofSeventy Second (72nd) Annual General Meeting of the Company.
As per the provisions of Rule 3(7) of the Companies (Audit and Auditors) Rules 2014such appointment made by the company shall be subject to ratifi cation in every AnnualGeneral Meeting upto the end of the tenure of appointment of the auditors.
M/s. Khandelwal Jain & Co. Chartered Accountants Mumbai have confi rmed theireligibility in terms of the provisions of Section 141 of the Companies Act 2013 and Rule4 of Companies (Audit and Auditors) Rules 2014.
The Board recommends the ratifi cation of the appointment of M/s. Khandelwal Jain &Co. Chartered Accountants Mumbai from the conclusion of this Annual General Meetinguntil the conclusion of the next Annual General Meeting on such remuneration as shall befi xed by the Board of Directors of the Company.
The Central Government had directed vide its order no.52/26/CAB-2010 dated 6thNovember 2012 to conduct a Cost Audit in respect of the specifi ed products viz.Telecommunication Industry.
The Board of Directors of the Company has accorded its approval for the appointment ofM/s Sanjay Gupta & Associates Cost Accountants New Delhi as Cost Auditors for theFinancial Year 2017-18 as the Cost Auditor of the Company to conduct audit of the CostAccounting Records maintained by the Company for the fi nancial year commencing on 1stApril 2017 and ending on 31st March 2018 subject to the approval of theCentral Government.
In accordance with the provisions of Section 148 of the Companies Act 2013 read withthe Companies (Audit & Auditors) Rules 2014 the remuneration payable to the CostAuditor has to be ratifi ed by the members of the Company. Accordingly consent of theMembers is sought by way of an Ordinary Resolution for ratifi cation of the remunerationamounting to Rs.70000/- (Rupees Seventy Thousands Only) plus applicable service tax andout of pocket expenses payable to the Cost Auditors for fi nancial year commencing on 1stApril 2017. In compliance with the provisions of the Companies (Cost Audit Report) Rules2011 and General Circular No. 15/2011 issued by Government of India Ministry of CorporateAffairs Cost Audit Branch we hereby submit that the Company has fi led the Cost AuditReport for the fi nancial year ended on 31st March 2016 within the prescribedtimeline. As regards to the fi nancial year ended on 31st March 2017 the duedate for fi ling the Cost Audit Report is 27th September 2017 and the Companyshall fi le the same on or before due date.
In terms of Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 the Company has appointed M/s Sanjay Gupta & Associates CostAccountants New Delhi as Cost Auditors for the Financial Year 2017-18.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed Mr. Dinesh Bhandari (CP No.:10300 FCS: 5887) Practicing Company Secretary toundertake the secretarial audit of the company for the fi nancial year 2017-18. ThePracticing Company Secretary has submitted the Report on the Secretarial Audit conductedby him for the fi nancial year 2016-17 which is annexed to this Board Report asAnnexure-3. The Report does not contain any qualifi cation reservation or adverse remark.
M/s Ernst and Young performs the duties of internal auditors of the Company and theirreport is reviewed by the Audit Committee from time to time.
CASH FLOW STATEMENT
As per the requirements of the Regulation 34 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Cash Flow Statement as prepared inaccordance with the Accounting Standard on Cash Flow Statement (AS 3) issued by theInstitute of Chartered Accountants of India is given along with the Balance Sheet andStatement of Profi t and Loss.
In compliance with the provisions of Section 177 of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasconstituted an Audit Committee. The composition scope and powers of the Audit Committeetogether with details of meetings held during the year under review forms part of theCorporate Governance Report.
The recommendations of the Audit Committee are accepted by the Board.
RISK MANAGEMENT POLICY
The Company has a robust Risk Management policy to identify evaluate business risksand opportunities. This policy seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The policy defines the risk management approach across the organization at various levels includingdocumentation and reporting. The Company has identifi ed various risks and also hasmitigation plans for each risk identifi ed.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
As of March 31 2017 there was no Unclaimed Dividend due for transfer to the InvestorEducation and Protection Fund (IEPF) of the Central Government after the expiry of sevenyears.
The Company had disinvested its stake in its wholly owned subsidiary namely VideoconIntelligent Security Private Limited (Formerly Quadrant Telenet Services Private Limited)on August 12 2016. Accordingly Videocon Intelligent Security Private Limited ceased tobe a subsidiary company of the Company w.e.f. August 12 2016. As on the date of signingof this Report the Company has no subsidiary.
As on 31st March 2017 the Company has no subsidiary Company hence the information inAOC-1 pursuant to the provisions of Section 129(3) of the Companies Act 2013 is notapplicable.
JOINT VENTURES/ASSOCIATE COMPANIES
As of March 31 2017 the Company has one Associate Company i.e Quadrant EnterprisesPrivate Limited. However there are no Joint Ventures of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
As on 31st March 2017 the Company has no subsidiary Company and the consolidated financial statements has not been compiled since the Company had disinvested its stake inits wholly owned subsidiary namely M/s Videocon Intelligent Security Private Limited(Formerly Quadrant Telenet Services Private Limited) w.e.f. August 12 2016. AccordinglyVideocon Intelligent Security Private Limited ceased to be a subsidiary company of theCompany w.e.f. 12th August 2016. Hence the provisions relating toconsolidation of accounts is not applicable to the Company.
The Statutory Auditors of the Company M/s Khandelwal Jain & Co. CharteredAccountants have submitted the Auditors' Report which has observation on StandaloneFinancial Statements for the period ended March 31 2017.
MANAGEMENT'S EXPLANATION TO THE AUDITORS' QUALIFICATIONS/OBERSERVATIONS: -
1) Auditors' Qualifi cation in the Standalone Auditor's Report
Point No.4 and 5 of the Auditor's Report which summarizes the basis of Qualifi cationand Qualifi ed Opinion "As mentioned in Note No. 30 to the fi nancial statementsthe Company has not determined the impairment loss if any on its fi xed assets. As theimpairment loss. If any in terms of Accounting Standard 28 Impairment ofAssets' has not been determined we are unable to express any opinion as to the effectthereof on the fi nancial statements for the year.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualifi ed Opinion in paragraph 4 above the aforesaid fi nancial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2017 and its loss and its cash fl ows for the yearended on that date."
Management's Explanations to the Auditor's Qualifi cation in the Standalone Auditor'sReport
The Company could not ascertain the value of assets pertaining to GSM business for thepurpose of determining the loss on impairment due to ongoing negotiations with buyers forgetting suitable realizable value of the assets. The Management is hopeful that theCompany will realize appropriate value of the assets on its sale and quantify the loss onimpairment if any. The treatment of the same will be refl ected in the fi nancialstatements accordingly.
2) Auditors' Qualifi cation in the Annexure to the Standalone Auditor'sReport
Point No. VIII of the Annexure to Auditor's Report which summarizes the basis ofQualifi cation "According to the information and explanations given to us andrecords examined by us the Company has defaulted in repayment of dues to banks asfollows:
|Particulars || |
Delay in days
| || |
|Amount paid before the year end || |
60 to 89 days
|Amount outstanding as at 31st March || |
0 to 59 days
|2017 and subsequently paid. || || |
Management's Explanations to Auditors' Qualifi cation in the Annexure to theStandalone Auditor's Report
Due to continuous losses and fi nancial constraints the Company has defaulted/ delayedthe interest payments accrued towards Lenders on account of Secured Non-ConvertibleDebentures (NCDs) issued to Lenders as per CDR terms for the period January 2017 toApril 2017 and principal repayment of Secured NCDs accrued for the month of April 2017and May 2017 till the date of signing of this report. The Company is in discussions withLenders for appropriate recourse in the matter.
3) Auditors' Observation in the Standalone Auditor's Report
Point No.6 of the Auditor's Report which summarises the basis of Emphasis of Matter "Wedraw attention to Note No. 28 to the fi nancial statements the Company has incurred a netloss of Rs. 1520774811 during the year the accumulated losses as at March 31 2017amounted to Rs. 19159182563 resulting in the erosion of its net worth and has currentliabilities in excess of current assets by Rs. 1836596292 as at March 31 2017. Thesefactors raise a doubt that the Company will not be able to continue as a going concern.The management is confi dent of generating cash fl ows from continue business operationsthrough increasing subscribers' base and with the support of signifi cant shareholders tofund its operating and capital fund requirements. Accordingly these statements have beenprepared on a going concern basis. Our opinion is not qualifi ed in respect of thismatter.
" Management's Explanations to Auditors' Observation in the StandaloneAuditor's Report
The accumulated losses of the Company as at March 31 2017 are more than fi ftypercent of its net worth as at that date. The losses are due to declining market of the fixed line business and high operating costs. The management is confi dent of generatingcash fl ows from business operations through increasing subscribers' base and other valueadded services and reducing losses gradually. Further with the support of signifi cantshareholders to fund its operating and capital expenditure. Management is confi dent ofmeeting its funds requirement.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place a Prevention of Sexual Harassment policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
POLICY ON PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading) Regulations 2015 the Company hasframed a) Code of Internal Procedures and Conduct for Regulating Monitoring and Reportingof Trading by Insiders and b) Code of Fair Disclosure. The Company's Code inter aliaprohibits purchase and/or sale of shares of the Company by an insider while in possessionof unpublished price sensitive information in relation to the Company and also duringcertain prohibited periods.
The Company is committed to maintain highest standards of Corporate Governance. Thedetailed report on Corporate Governance Management Discussion and Analysis Report as wellas Corporate Governance Compliance Certifi cate are attached pursuant to the requirementsof Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and form part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act the Directors state that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; (b) TheDirectors has selected such accounting policies and applied consistently and have madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the fi nancial year and of theProfi t and loss of the Company for that period; (c) The Directors had taken proper andsuffi cient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; (d) The Directors had preparedthe annual accounts on a going concern basis; (e) The Directors had laid down internal financial controls to be followed by the Company and such internal fi nancial controls areadequate and were operating effectively; (f) The Directors had devised proper systems toensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
Your Directors wish to express their gratitude for the wholehearted support receivedthroughout the year from the Department of Telecommunications Financial InstitutionsBanks Lenders and the various Central and State Government Departments BusinessAssociates Shareholders and Subscribers. The Directors also extend their appreciation tothe employees for their continuing support and unstinting efforts in ensuring an excellentall round operational performance.
| || |
For and on behalf of the Board of Directors
| ||Mitu Mehrotra Goel ||Vinay Kumar Monga |
|Place: Gurgaon ||Director ||Director |
|Date: May 23 2017 ||(DIN: 05188846) ||(DIN: 03029345) |