Den Networks Ltd.
|BSE: 533137||Sector: Media|
|NSE: DEN||ISIN Code: INE947J01015|
|BSE 15:46 | 27 Mar 2018||Den Networks Ltd|
|NSE 05:30 | 01 Jan 1970||Den Networks Ltd|
|BSE: 533137||Sector: Media|
|NSE: DEN||ISIN Code: INE947J01015|
|BSE 15:46 | 27 Mar 2018||Den Networks Ltd|
|NSE 05:30 | 01 Jan 1970||Den Networks Ltd|
Your Directors have the pleasure in presenting the Eighth Annual Report on the business& operations of your Company along with the Consolidated & Standalone AuditedFinancial Statements for the year ended March 31st 2015.
During the year under review the total revenue of your Company was Rs. 9434.71million on standalone basis and Rs. 12174.52 million on consolidated basis as compared tothe last years revenue of Rs. 9366.16 million on standalone basis and Rs.11749.19million on consolidated basis respectively. The Post Tax Loss of your Company was Rs.(1108.07) million on standalone basis and Rs. (1440.21) million on consolidated basis ascompared to the last year's Post Tax Profit was Rs. 51.65 million on standalone basis andRs. 383.99 million on Consolidated basis respectively.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Accounting Standard AS-21 on Consolidated Financial Statements read withAccounting Standard AS23 on the Accounting for Investments in Associates andAccounting Standard AS27 on accounting on Joint Ventures issued by the Institute ofChartered Accountants of India the Audited Consolidated Financial Statements are providedin this Annual Report.
Your Directors do not recommend any Dividend for the financial year ended March 31st2015.
TRANSFER TO RESERVES
Your Company has not made any transfer to the Reserves during the financial year2014-15.
Your Company one of the largest cable MSOs in India is laying the foundations ofbuilding a powerful Consumer Franchise in Broadband Cable Television and TelevisionShopping. Significant investments are being made to bring disruptive consumer offerings tothe market.
(i) Cable TV Business
Continuing with plans to digitalize the analog cable subscriber base DEN seededadditional one million boxes in FY'14-15 taking the digital subscribers base to 7 millionout of a total 13 million subscribers. The Company witnessed the positive results onsubscription revenues and collections in FY'14-15; our subscription revenues grew 25% inFY'14-15 driven by increase in ARPUs across DAS territories.
(ii) Broadband Business
Launched in FY' 14-15 DEN Broadband Services are now available to 329000 homes as onMarch 31st 2015. The benefit of conversions out of the network rollout will come in thefollowing quarters. The Company currently has a subscriber base of 23K at the end ofFY'14-15 and 40% of the broadband subscribers come from Non-DEN homes.
(iii) E-commerce business
DEN entered into a 50:50 JV with e-commerce major SNAPDEAL and forayed into TVCommerce business leveraging DENs strengths in distribution and media
and SNAPDEALs strength in brand merchandising and logistics. The JV is currentlyconverting +30% of the calls received and is clocking an annualized GMV of INR 115 Crores(at Mar'15 average booked GMV rate) within four months of beginning.
(iv) Club Ownership of Delhi Dynamos FC in Indian Super League
DEN forayed into football business and bought Delhi Dynamos of ISL with the strategicintent of strengthening our consumer brand. Delhi Dynamos FC is one of the most popularteams of the ISL with a fan base of over 419000 on Facebook and over 30000 Twitterfollowers.
A report on the performance and financial position of each of the subsidiariesassociates and joint venture companies as per the Companies Act 2013 is provided asannexure to the consolidated financial statement and hence not repeated here for the sakeof brevity. The Policy for determining material subsidiaries as approved may be accessedon the Company's website at the link: http://www.dennetworks.com/ corporate_gov.htm
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. The Company has also appointed Ernst & Young to compile /develop the policies and document the financial and IT controls. For each control a testplan shall be documented and will be tested by the Management Audit Team on periodicalbasis.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure A.
MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year. For further detailsplease refer report on Corporate Governance forming part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31st 2015 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2015 and of the profit ofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern' basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
KEY MANAGERIAL PERSONNEL & DIRECTORS
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. PradeepParameswaran was appointed as Chief Executive Officer and Mr. Manish Dawar was appointedas Group Chief Financial Officer of the Company w. e.f. January 16 2015 and February 102015 respectively. Mr. S.N. Sharma resigned as Chief Executive Officer of the Company w.e.f. September 29 2014.
In terms of the Articles of Association of the Company Mr. Sameer Manchanda ChairmanManaging Director is liable to retire by rotation and being eligible has offered himselffor re-appointment. The Company has received requisite notice in writing from a member forappointment of Mr. Sameer Manchanda as Director.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under CompaniesAct 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. TheCompany has devised a Policy for performance evaluation of Independent Directors BoardCommittees and other individual Directors which includes criteria for performanceevaluation of the Non-Executive Directors and Executive Directors. The details ofprogrammes for familiarization of Independent Directors with the Company their rolesrights responsibilities in the Company nature of the industry in which the Companyoperates business model of the Company and related matters are put up on the website ofthe Company at the link: http:// www.dennetworks.com/corporate_gov.htm
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit & Nomination andRemuneration Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report. The remuneration of Senior Management isdiscussed and approved by the Nomination and Remuneration Committee. The Board has on therecommendations of the Nomination and Remuneration Committee framed a policy forselection and appointment of Directors Senior Management and their remuneration. TheRemuneration Policy is stated in the Corporate Governance Report.
AUDITORS & AUDITORS REPORT
The term of M/s. Deloitte Haskins & Sells Chartered Accountants the StatutoryAuditors of your Company expires at the ensuing Annual General Meeting. The Company hasreceived a certificate from them to the effect that their reappointment if made would bewithin the prescribed limits as mentioned under Section 141(3)(g) of the Companies Act2013 and they are not disqualified for re-appointment. Your Board has duly examined theReport issued by the Statutory Auditors' of the Company on the Accounts for the financialyear ended March 31 2015. The notes on Accounts as presented in this Annual Report areself explanatory in this regard and hence do not call for any further clarification. TheAuditors' Report does not contain any qualification reservation or adverse remark.
It is proposed to re-appoint M/s. Deloitte Haskins & Sells Chartered Accountantsas Statutory Auditors for a period of three years from the conclusion of Eight AnnualGeneral Meeting till the conclusion of Eleventh Annual General Meeting of the Company.subject to Annual ratification by shareholders at every Annual General Meeting.
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Neelesh Jain Company Secretaries in practice of M/s NKJ & Associates toundertake the Secretarial Audit of the Company. The Secretarial Auditors' Report does notcontain any qualification reservation or adverse remark. The Secretarial Audit Report isannexed herewith as Annexure B .
M/s. Ajay Kumar Singh & Co. Cost Accountants have been re-appointed as CostAuditors for the financial year 201415 to conduct cost audit of the accounts maintainedby the Company. Full particulars of the Cost Auditor are as under:
M/s. Ajay Kumar Singh & Co.
1/26 2nd Floor Lalita Park Laxmi Nagar Delhi-110092 Tel. No. : 011-45595822; EmailID Info@cmaadvisors.in (Firm's Regn. No.000386)
Your Board has duly examined the Report issued by the Cost Auditors of the Company onthe Accounts for the financial year ended March 31 2015. The Cost Auditors' Report doesnot contain any qualification reservation or adverse remark. Your Company hasre-appointed M/s. Ajay Kumar Singh & C0. Cost Accountants as Cost Auditor underSection 148 of the Companies Act 2013 for Cost Audit for the financial year 2015-16.
PARTICULARS OF LOANS GUARANTEES
The details of the loans guarantees given and investments made by the Company aregiven in the Notes to the Financial Statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arms lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. The Policy onmateriality of related party transactions and dealing with related party transactions asapproved by the Board may be accessed on the Companys website at the link: http://www.dennetworks.com/corporate_gov.htm
Your Directors draw attention of the members to Notes to the Financial Statements whichsets out related party disclosures.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Clause 49 of the Listing Agreement with the Stock Exchanges in India is presentedin a separate section forming part of the Annual Report.
employees STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employees' Stock Option Scheme of the Company inaccordance with the applicable SEBI Guidelines. The applicable disclosures as stipulatedunder the SEBI Guidelines as on March 31 2015 with regard to the Employees' Stock OptionScheme (ESOS) are provided in Annexure C to this Report.
The issue of equity shares pursuant to exercise of options does not affect theStatement of Profit and Loss of the Company as the exercise is made not below the marketprice prevailing as on the date of the grant.
The Company has received a certificate from the Auditors of the Company that the Schemehas been implemented in accordance with the SEBI Guidelines and the resolution passed bythe members. The certificate would be placed at the Annual General Meeting for inspectionby members.
Voting rights on the shares issued to employees under the ESOS are either exercised bythem directly or through their appointed proxy.
The Companys financial discipline and prudence is reached in the stable creditrating by rating agency as given below:
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board. TheCSR Policy may be accessed on the Companys website at the link: http://www.dennetworks.com/corporate_gov.htm
The key philosophy of all CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability.
The Company has identified following focus areas of engagement which are as under:
During the year the Company has spent Rs. 41.81 Lacs on promotion of sports.
The Annual Report on CSR activities is annexed herewith marked as AnnexureD.
During the year your Directors have constituted a Risk Management Committee which hasbeen entrusted with
the responsibility to assist the Board in (a) Overseeing and approving theCompanys enterprise wide risk management framework; and (b) Overseeing that all therisks that the organization faces such as strategic financial credit market liquiditysecurity property IT legal regulatory reputational and other risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks. A Group Risk Management Policy was reviewed andapproved by the Committee. The Companys management systems organizationalstructures processes standards code of conduct and behaviors together form the DENManagement System that governs how the Group conducts the business of the Company andmanages associated risks.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in Zero Tolerance against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts. The Code laid down by the Board is known as Code ofBusiness Conduct which forms an Appendix to the Code. The Code has been posted onthe Companys website www.dennetworks. com. The Code lays down the standardprocedure of business conduct which is expected to be followed by the Directors and thedesignated employees in their business dealings and in particular on matters relating tointegrity in the work place in business practices and in dealing with stakeholders. TheCode gives guidance through examples on the expected behaviour from an employee in a givensituation and the reporting structure. All the Board Members and the Senior ManagementPersonnel have confirmed compliance with the Code. All Management Staff were givenappropriate training in this regard.
The composition of the Audit Committee is in conformity with the provisions of Section177 of the Companies Act 2013. The Audit Committee comprises of :-
All the recommendations made by the Audit Committee were accepted by the Board.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism Policy to deal with instance of fraud andmismanagement if any. In staying true to our values of Strength Performance and Passionand in line with our vision of being one of the most respected companies in India theCompany is committed to the high standards of Corporate Governance and StakeholderResponsibility.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and Designated Employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Companys shares by the Directors and the DesignatedEmployees while in possession of Unpublished Price Sensitive Information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code. All Directors and the Designated Employeeshave confirmed compliance with the Code.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 of Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of remuneration details and details of employees of the Company will be providedupon request. In terms of Section 136 of the Act the reports and accounts are being sentto the members and others entitled thereto excluding the information on details ofremuneration of directors and employees particulars which are available forinspection by the members at the Registered office of the Company during business hours onworking days of the Company up to the date of ensuing Annual General Meeting. If anymember is interested in inspecting the same such member may write to the CompanySecretary in advance.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT Workplace (PREVENTIONPROHIBITION AND REDRESSAL)
In order to prevent sexual harassment of women at work place a new Act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace and has set up a Committee for implementation of said Policy. During the yearThe Company has not received any complaint of harassment.
DETAILS OF UNCLAIMED SHARES AS PER CLAuSE 5A OF THE LISTING AGREEMENT
Dematerialization credit of 309 equity shares of Rs.10 each for four allottees couldnot happen till date due to incorrect particulars of account holders. The Company throughits Registrar and Share Transfer Agent M/s Karvy Computershare Private Limited had sentseveral reminders to these allottees and in the absence of any response from any of themhad finally transferred the aforesaid equity shares to Den Networks Limited Unclaimed Securities Suspense Account. As required under Clause 5A of the Listing
Agreement following is the status of outstanding shares lying in the aforesaid accountas on March 31 2015:
The voting rights on these shares are frozen till the rightful owner of these sharesclaims the shares.
We at DEN believe that sound Corporate Governance is critical in enhancing andretaining stakeholders trust. Our priority is attainment of all performance goals withintegrity. The Company is committed to maintain the highest Standards of CorporateGovernance and adhere to the Corporate Governance requirements set out by SEBI. Acertificate from practicing Company Secretary regarding compliance of the conditions ofCorporate Governance as stipulated under Clause 49 of the Listing Agreement with theStock Exchanges is attached to the Report on Corporate Governance. Certificate of theCEO/ CFO inter alia confirming the correctness of the financial statements compliancewith Company's Code of Conduct adequacy of the internal control measures and reporting ofmatters to the Audit Committee in terms of Clause 49 of the Listing Agreement with theStock Exchanges is attached in the Corporate Governance report and forms part of thisReport.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to provisions of the Companies Act 2013 and applicable rules thereof thefollowing information is provided:
Conservation of Energy
Your Company is not an energy intensive unit; however possibilities are continuouslyexplored to conserve energy and to reduce energy consumption at production & editingfacilities studios workstations of the Company.
Your Company is conscious of implementation of latest technologies in key workingareas. Technology is ever-changing and employees of your Company are made aware of thelatest working techniques and technologies through workshops group e-mails discussionsessions for optimum utilization of available resources and to improve operationalefficiency.
Foreign Exchange Earnings and Outgo
Disclosure of foreign exchange earnings and outgo as required under Rule 2(C) is givenin Notes on Accounts forming part of the Audited Annual Accounts.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Companys operations in future.
6. Material changes and commitments affecting the financial position of the company.
7. Change in the nature of business.
8. Disclosure u/s 67(3) in respect of voting rights not exercised by employees inrespect of shares to which the scheme relates.
9. Re-appointment of Independent Director after 5 years u/s 149(10).
Your Directors further state that during the year under review there were no cases ledpursuant to The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors place on record their gratitude to the Central Government StateGovernment Companys Bankers and business partners for the assistance co-operationand encouragement they extended to the Company. Your Directors also wish to place onrecord their sincere thanks and appreciation for the continuing support and unstintingefforts of investors vendors dealers business associates and employees in ensuring anexcellent all around operational performance.
For and on behalf of the Board of Directors
Chairman Managing Director
Place: New Delhi