dish tv india limited

Transcription

Date: November 26, 2008
Letter of Offer
For private circulation to the equity shareholders of the Company only
DISH TV INDIA LIMITED
Our Company was originally incorporated as Navpad Texturisers Private Limited on August 10, 1988 under the Companies Act, 1956, as amended. The
name of our Company was changed to ASC Enterprises Private Limited and a fresh certificate of incorporation reflecting the change in name was issued
on September 29, 1995 by the Registrar of Companies, Maharashtra, Bombay. Our Company was converted to a public company and a fresh certificate of
incorporation was issued by the Registrar of Companies, Maharashtra, Bombay on December 13, 1995. The name of our Company was then changed to
Dish TV India Limited and a fresh certificate of incorporation was issued by the Registrar of Companies, National Capital Territory of Delhi and
Haryana, New Delhi on March 7, 2007. The registered office of our Company was shifted from 135, Dr. Annie Baesant Road, Worli, Mumbai 400 018,
India to B-10, Essel House, Lawrence Road, Industrial Area, Delhi 100 035, India on October 4, 1999. For further details see “History of the Company
and Other Corporate Matters” on page 55.
Registered Office: B-10, Essel House, Lawrence Road, Industrial Area, Delhi 100 035, India.
Tel: +91 11 27101145; Fax: +91 11 27192172
Corporate Office: FC-19, Sector 16A, Noida 201 301, Uttar Pradesh, India. Tel: +91 120 2511 064; Fax: +91 120 4357 078
Compliance Officer: Mr. Jagdish Patra, Company Secretary and Compliance Officer
E-mail: rightsissue@dishtv.in; Website: www.dishtv.in
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY
LETTER OF OFFER
ISSUE OF 51,81,49,592 EQUITY SHARES OF RE. 1 EACH (“EQUITY SHARES”) OF DISH TV INDIA LIMITED FOR CASH AT A
PRICE OF RS. 22 PER EQUITY SHARE INCLUDING A PREMIUM OF RS. 21 PER EQUITY SHARE AGGREGATING TO RS.
1,13,992.91 LAKHS TO THE EQUITY SHAREHOLDERS OF DISH TV INDIA LIMITED ON RIGHTS BASIS IN THE RATIO OF 121
EQUITY SHARES FOR EVERY 100 EQUITY SHARES HELD ON THE RECORD DATE i.e. OCTOBER 16, 2008 IN TERMS OF THE
LETTER OF OFFER (“ISSUE”). THE TOTAL ISSUE PRICE IS 22 TIMES OF THE FACE VALUE OF THE EQUITY SHARE. THE
ISSUE PRICE FOR THE EQUITY SHARES WILL BE PAID IN THREE INSTALLMENTS: RS. 6 WILL BE PAYABLE ON
APPLICATION, RS. 8 WILL BECOME PAYABLE, AT THE OPTION OF THE COMPANY, AFTER 3 MONTHS BUT WITHIN 9
MONTHS FROM THE DATE OF ALLOTMENT AND THE BALANCE RS. 8 WILL BECOME PAYABLE, AT THE OPTION OF THE
COMPANY, AFTER 9 MONTHS BUT WITHIN 18 MONTHS FROM THE DATE OF ALLOTMENT. FOR MORE DETAILS, SEE
“TERMS OF THE ISSUE” ON PAGE 340.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can
afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this
Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risks involved. The
securities have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or
adequacy of this document. Investors are advised to refer to “Risk Factors” beginning on page ix before making an investment in this Issue.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard
to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true and correct in all
material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no
other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions
misleading in any material respect.
LISTING
The existing equity shares of our Company are listed on the Bombay Stock Exchange Limited (“BSE”), the National Stock Exchange of India Limited
(“NSE”) and the Calcutta Stock Exchange Association Limited (“CSE”). The Company has received “in-principle” approvals from BSE, NSE and
CSE for listing the Equity Shares arising from this Issue vide letters dated May 29, 2008, May 30, 2008 and July 10, 2008 respectively. The NSE shall
be the Designated Stock Exchange.
LEAD MANAGER TO THE ISSUE
REGISTRAR TO THE ISSUE
Enam Securities Private Limited
801, Dalamal Towers,
Nariman Point,
Mumbai 400 021,
India.
Tel: +91 22 6638 1800
Fax: +91 22 2284 6824
Email: dishtv@enam.com
Website: www.enam.com
Investor Grievance Email: complaints@enam.com
Contact Person: Mr. Sachin K. Chandiwal
SEBI Registration No.: INM000006856
ISSUE OPENS ON
DECEMBER 12, 2008
Sharepro Services (India) Private Limited
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Cardinal Gracious Road,
Chakala, Andheri (E),
Mumbai 400 099,
India.
Tel: +91 22 6772 0300 / 400 / 419 / 422
Fax: +91 22 2850 8927
Email: dishtv@shareproservices.com
Contact Person: Mr. Prakash Khare / Mr. Anand Moolya
SEBI Registration No.: INR000001476
ISSUE PROGRAMME
LAST DATE FOR REQUEST FOR
SPLIT APPLICATION FORMS
DECEMBER 26, 2008
ISSUE CLOSES ON
JANUARY 9, 2009
TABLE OF CONTENTS
PRESENTATION OF CURRENCY, FINANCIAL INFORMATION AND USE OF MARKET DATA .......iii
FORWARD-LOOKING STATEMENTS .............................................................................................................. iv
DEFINITIONS AND ABBREVIATIONS............................................................................................................... v
RISK FACTORS ...................................................................................................................................................... ix
SUMMARY................................................................................................................................................................ 1
THE ISSUE ................................................................................................................................................................ 4
SELECTED FINANCIAL INFORMATION.......................................................................................................... 5
GENERAL INFORMATION................................................................................................................................. 10
CAPITAL STRUCTURE........................................................................................................................................ 14
OBJECTS OF THE ISSUE..................................................................................................................................... 26
BASIS FOR ISSUE PRICE .................................................................................................................................... 30
STATEMENT OF TAX BENEFITS..................................................................................................................... 32
INDUSTRY OVERVIEW....................................................................................................................................... 40
OUR BUSINESS ...................................................................................................................................................... 46
REGULATIONS AND POLICIES ........................................................................................................................ 52
HISTORY OF THE COMPANY AND OTHER CORPORATE MATTERS ................................................... 55
DIVIDEND POLICY .............................................................................................................................................. 62
MANAGEMENT ..................................................................................................................................................... 63
PROMOTERS ......................................................................................................................................................... 73
GROUP COMPANIES ........................................................................................................................................... 87
OUR SUBSIDIARIES ........................................................................................................................................... 101
FINANCIAL STATEMENTS .............................................................................................................................. 104
STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY ................................................... 220
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS....................................................................................................................................................... 222
FINANCIAL INDEBTEDNESS........................................................................................................................... 274
OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ..................................................... 280
GOVERNMENT APPROVALS .......................................................................................................................... 320
STATUTORY AND OTHER INFORMATION................................................................................................. 329
TERMS OF THE ISSUE ...................................................................................................................................... 340
MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION.................................................................... 361
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION.......................................................... 372
DECLARATION ................................................................................................................................................... 374
i
NO OFFER IN THE UNITED STATES
The rights and the shares of the Company have not been and will not be registered under the United States
Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws and may not be offered,
sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof
(the ‘‘United States’’ or ‘‘U.S.’’) or to, or for the account or benefit of, “U.S. Persons” (as defined in Regulation S
under the Securities Act (‘‘Regulation S’’)), except in a transaction exempt from the registration requirements of
the Securities Act. The rights referred to in this Letter of Offer are being offered in India, but not in the United
States. The offering to which this Letter of Offer relates is not, and under no circumstances is to be construed as, an
offering of any shares or rights for sale in the United States or as a solicitation therein of an offer to buy any of the
said shares or rights. Accordingly, this Letter of Offer should not be forwarded to or transmitted in or into the
United States at any time.
Neither the Company nor any person acting on behalf of the Company will accept subscriptions from any person,
or the agent of any person, who appears to be, or who the Company or any person acting on behalf of the Company
has reason to believe is, a resident of the United States and to whom an offer, if made, would result in requiring
registration of this Letter of Offer with the United States Securities and Exchange Commission. The Company is
informed that there is no objection to a United States shareholder selling its rights in India. Rights may not be
transferred or sold to any U.S. Person.
ii
PRESENTATION OF CURRENCY, FINANCIAL INFORMATION AND USE OF MARKET DATA
All references to “Rs.”or “INR” refer to Rupees, the lawful currency of India, “USD” or “US$” refers to the United
States Dollar, the lawful currency of the United States of America. References to the singular also refers to the
plural and one gender also refers to any other gender, wherever applicable, and the words “Lakh” or “Lac” mean
“100 thousand” and the word “million” means “10 lakh” and the word “crore” means “10 million” or “100 lakhs”
and the word “billion” means “1,000 million” or “100 crores”. All figures presented in brackets “( )” should be read
as negative.
Unless stated otherwise, the financial information used in this Letter of Offer is derived from the Company’s
consolidated restated financial statements for the period between March 31, 2004 and June 30, 2008 prepared in
accordance with Indian GAAP and the Companies Act, 1956 and standalone restated financial statements in
accordance with applicable SEBI Guidelines, as stated in the report of our statutory auditors MGB & Co.,
Chartered Accountants, included in this Letter of Offer.
Unless stated otherwise, throughout this Letter of Offer, all figures have been expressed in lakhs.
Our fiscal year commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, reference
herein to a fiscal year (eg. Fiscal 2009), is to the fiscal year ended March 31 of a particular year.
All references to “Rupees” or “Rs.” are to Indian Rupees, the official currency of the Republic of India.
In this Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed may be
due to rounding off.
Market and industry data used in this Letter of Offer, has been obtained from industry publications and
governmental sources. Industry publications generally state that the information contained in those
publications has been obtained from sources believed to be reliable and that their accuracy and
completeness are not guaranteed and their reliability cannot be assured. Although we believe market data
used in this Letter of Offer is reliable, it has not been independently verified.
iii
FORWARD-LOOKING STATEMENTS
We have included statements in this Letter of Offer which contain words or phrases such as “will”, “aim”, “is likely
to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”,
“future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such
expressions, that are “forward looking statements”.
All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual
results to differ materially from those contemplated by the relevant forward-looking statement. Important factors
that could cause actual results to differ materially from our expectations include but are not limited to:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
General economic and business conditions in the markets in which we operate and in the local, regional
and national economies;
Increasing competition in or other factors affecting the industry segments in which we operate;
Controlling the customer churn that we are subjected to;
Changes in laws and regulations relating to the industries in which we operate;
Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch
and implement various projects and business plans;
Our ability to meet our capital expenditure requirements;
Fluctuations in interest rates and operating costs;
Our ability to attract and retain qualified personnel;
Changes in political and social conditions in India, the monetary policies of India and other countries,
inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; and
The performance of the financial markets in India.
The other risk factors discussed in this Letter of Offer, including those set forth under “Risk Factors”.
For a further discussion of factors that could cause our actual results to differ, please refer to the sections titled
“Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be
materially different from what actually occurs in the future. As a result, actual future gains or losses could
materially differ from those that have been estimated. Neither the Company nor the Lead Manager nor any of their
respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances
arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do
not come to fruition. In accordance with SEBI / Stock Exchanges requirements, the Company and Lead Manager
will ensure that investors in India are informed of material developments until the time of the grant of listing and
trading permission by the Stock Exchanges.
iv
DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this
Letter of Offer.
Company Related Terms
Term
Articles/Articles of Association
Auditors
Description
Articles of association of our Company.
MGB & Company, Chartered Accountants having their office at 21, Shankar Vihar
Vikas Marg, Delhi 1100 92, India.
Board of Directors/ Board
The board of directors of our Company or a duly constituted committee thereof.
Corporate Office
Corporate office of our Company situated at FC-19, Sector 16A, Noida, 201 301,
Uttar Pradesh, India.
“Dish TV India Limited” or “Dish Dish TV India Limited, a public limited company incorporated under the Companies
TV” or “the Company” or “our Act, 1956.
Company”
ESOP Scheme
The employee stock option plan of our Company as approved pursuant to a special
resolution passed by our shareholders at the AGM held on August 3, 2007.
Group Companies
The top five listed group companies of our Company in terms of market
capitalization, being Zee Entertainment Enterprises Limited, ETC Networks Limited,
Essel Propack Limited, Zee News Limited and Wire and Wireless (India) Limited.
Memorandum/
Memorandum
of The memorandum of association of our Company.
Association
“New Era Entertainment Network New Era Entertainment Network Limited, which had its registered office situated at
Limited” or “NEENL”
B-10, Essel House, Lawrence Road Industrial Area, New Delhi 110 035, India.
Promoters
Who are individuals:
Mr. Subhash Chandra, Mr. Laxmi Narain Goel, Mr. Ashok Goel, Mr. Ashok Mathai
Kurien and Ms. Sushila Goel.
And
Which are companies:
Veena Investment Private Limited, Delgrada Limited, Afro-Asian Satellite
Communications Limited, Jayneer Capital Private Limited, Ganjam Trading
Company Private Limited, Churu Trading Company Private Limited, Premier Finance
& Trading Company Limited, Prajatma Trading Company Private Limited, Lazarus
Investments Limited, Briggs Trading Company Private Limited, Essel Infraprojects
Limited (formerly, Pan India Paryatan Limited) and Ambience Business Services
Private Limited.
Registered Office
Registered office of our Company situated at B-10, Essel House, Lawrence Road,
Industrial Area, Delhi 100 035, India.
Scheme of Arrangement
The scheme of arrangement by which Zee Entertainment Enterprises Limited has
transferred its direct consumer services business to the Company; and Siti Cable
Network Limited and New Era Entertainment Network Limited have transferred their
entire business and whole of undertakings to our Company, as approved by the order
of the High Court of Judicature at Delhi dated December 18, 2006 and High Court of
Judicature at Bombay dated January 12, 2007.
“Siti Cable Network Limited” or “Siti Siti Cable Network Limited, which had its registered office at Continental Building,
Cable”
135 Dr Annie Besant Road, Worli, Mumbai 400 018, India.
Subsidiaries
Agrani Convergence Limited, Agrani Satellite Services Limited and Integrated
Subscriber Management Services Limited.
“We” or “us” or “our”
Unless indicated otherwise, refers to Dish TV India Limited and its Subsidiaries.
Issue Related Terms and Abbreviations
Term
Act
AGM
Allotment
Description
The Companies Act, 1956, as amended.
Annual General Meeting.
Unless the context otherwise requires, the allotment of partly paid up Equity Shares
pursuant to the Issue.
v
Term
Allotment Date
CAF
DP
DIPP
Designated Stock Exchange
Draft Letter of Offer
EGM
Equity Shares
Equity Shareholders
FDI
FII
FIPB
FVCI
Financial Year/Fiscal Year/Fiscal
Indian GAAP
Investor(s)
ISIN
Issue
Issue Closing Date
Issue Opening Date
Issue Price
Lead Manager
Letter of Offer
Mutual Fund
RoC
Record Date
Registrar/ Registrar to the Issue
Renouncees
Rights Entitlement
SEBI
SEBI Act
SEBI Guidelines
Stock Exchange(s)
Takeover Code
Description
The date on which Allotment is made.
Composite Application Form.
Depository Participant.
Department of Industrial Policy and Promotion, Ministry of Commerce and Industry,
Government of India.
NSE.
Draft Letter of Offer dated May 20, 2008 filed with SEBI.
Extra Ordinary General Meeting.
Equity shares of the Company of face value of Re. 1 each.
A holder of Equity Shares.
Foreign Direct Investment.
Foreign Institutional Investor (as defined under the Securities and Exchange Board of
India (Foreign Institutional Investors) Regulations, 1995) registered with SEBI under
applicable laws in India.
Foreign Investment Promotion Board, Ministry of Finance, Government of India.
Foreign Venture Capital Investors (as defined under the Securities and Exchange
Board of India (Foreign Venture Capital Investors) Regulations, 2000) registered
with SEBI under applicable laws in India.
Period of twelve months ended March 31 of that particular year, unless otherwise
stated.
Generally Accepted Accounting Principles in India.
Shall mean an Equity Shareholder as on the Record Date, i.e. October 16, 2008 and
Renouncee(s).
International Securities Identification Number.
Issue of 51,81,49,592 Equity Shares of the Company for cash at aprice of Rs. 22 per
Equity Share including a premium of Rs. 21 per Equity Share aggregating upto Rs.
1,13,992.91 lakhs to the Equity Shareholders of the Company on rights basis in the
ratio of 121 Equity Shares for every 100 Equity Shares held on the Record Date i.e.
October 16, 2008 in terms of the Letter of Offer. The total Issue Price is 22 times of
the face value of the Equity Share. The Issue Price for the Equity Shares will be paid
in three installments: Rs. 6 will be payable on application, Rs. 8 will become
payable, at the option of the Company, after 3 months but within 9 months from the
date of Allotment and the balance Rs. 8 will become payable, at the option of the
Company, after 9 months but within 18 months from the date of Allotment.
January 9, 2009.
December 12, 2008.
Rs. 22 per Equity Share.
Enam Securities Private Limited.
Letter of Offer dated November 26, 2008 to be filed with the Stock Exchanges after
incorporating SEBI comments on the Draft Letter of Offer.
A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations,
1996.
Registrar of Companies, National Capital Territory of Delhi and Haryana, New
Delhi.
October 16, 2008.
Sharepro Services (India) Private Limited having its registered office at Satam
Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious Road, Chakala, Andheri
(E), Mumbai 400 099, India.
Persons who have acquired Rights Entitlements from Equity Shareholders.
The number of Equity Shares that a shareholder is entitled to in proportion to his/her
shareholding in the Company as on the Record Date.
Securities and Exchange Board of India.
The Securities and Exchange Board of India Act, 1992, as amended from time to
time.
The SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI, as
amended, including instructions and clarifications issued by SEBI from time to time.
The BSE, NSE and CSE.
The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as
amended.
Abbreviations
Abbreviation
Full Form
vi
Abbreviation
AS
BSE
CDSL
CEO
CSE
CFO
DOT
EPS
FEMA
FLC
GoI
ICD
HUF
IDBI
IRS
IT
I T Act
ITAT
ISO
MIB
MF
MoU
NR
NRI
NSDL
NSE
OCB
PAN
RBI
RoNW
Rs./Rupees/INR
SEC
TDSAT
USD
Full Form
Accounting Standards issued by the Institute of Chartered Accountants of India.
The Bombay Stock Exchange Limited.
Central Depository Services Limited.
Chief Executive Officer.
The Calcutta Stock Exchange Association Limited.
Chief Financial Officer.
Department of Telecommunication and Information Technology, Government of
India.
Earnings Per Share.
The Foreign Exchange Management Act, 1999, as amended from time to time, and
the regulations framed thereunder.
Foreign Letter of Credit.
Inter Corporate Deposits.
Hindu Undivided Family.
Industrial Development Bank of India.
Indian Readership Survey.
Information Technology.
The Income Tax Act, 1961, as amended from time to time.
Income Tax Appellate Tribunal.
International Standards Organisation.
Ministry of Information and Broadcasting, Government of India.
Mutual Funds.
Memorandum of Understanding.
Non Resident.
Non Resident Indian.
National Securities Depository Limited.
The National Stock Exchange of India Limited.
Overseas Corporate Bodies.
Permanent Account Number under the IT Act.
Reserve Bank of India.
Return on Networth.
Indian Rupees.
Socio-Economic Class.
Telecom Dispute Settlement and Appellate Tribunal.
United States Dollars, the official currency of the United States of America.
Technical and Industry Terms and Abbreviations
Term
ARPU
ASIASAT
C&S
CAS
CPE
DCCs
DTH
EPG
FTA
HE
HITS
HPA
INSAT4A
INTELSAT
ISP
IVR
LNB
Mhz.
MDU
NSS6
NVOD
PAS10
SACFA
SAF
Description
Average Revenue Per User.
Asia Satellite Telecommunications Company Limited – A satellite.
Cable and Satellite
Conditional Access System.
Consumer Premise Equipments.
Dish Care Centers.
Direct to Home.
Electronic Program Guide.
Free to Air.
Head End.
Head-end in the Sky.
High Power Amplifiers.
Indian Satellite 4A.
Intelsat, a satellite.
Internet Service Provider.
Interactive Voice Recording.
Low Noise Block.
Megahertz.
Multi Dwelling Unit.
The satellite used by the Company for uplinking of channels.
Near Video on Demand.
A satellite.
Standing Advisory Committee on radio frequency allocations.
Subscriber Application Form.
vii
Term
SMS
STB
VAS
VC
VGA
VSAT
WPC
Description
Subscriber Management System.
Set Top Box.
Value Added Services.
Viewing Card.
Video Graphics Array.
Very Small Apperture Terminal.
Wireless and Planning Commission.
viii
RISK FACTORS
An investment in equity shares involves a high degree of risk. You should carefully consider all the information in
this Letter of Offer, including the risks and uncertainties described below, before making an investment in our
Equity Shares. If any of the following risks actually occur, our business, results of operations and financial
condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your
investment. The financial and other implications of material impact of risks concerned, wherever quantifiable, have
been disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not
quantifiable and hence the same has not been disclosed in such risk factors. The numbering of risk factors has been
done to facilitate ease of reading and reference and does not in any manner importance of one risk factor over
another.
Unless otherwise stated, the financial information used in this section is derived from our consolidated audited
financial statements under Indian GAAP, as restated.
Internal Risk Factors
Internal risk factors and risks relating to our business
1. Some of our Promoter companies and one of our Group Companies have been subject to orders and notices
by SEBI. Further, SEBI has, in the past, imposed a penalty on a company which has one of our Directors on its
board of directors.
SEBI has passed an order dated March 19, 2008 (order no. WTM/TCN/91/IVD2/03/2008) against ZEEL, one of
our Group Companies, and also against some of our Promoter companies, namely, Churu Trading Company
Private Limited (“Churu”), Briggs Trading Company Private Limited, Prajatma Trading Company Private
Limited, Ganjam Trading Company Private Limited, Premier Finance & Trading Company Limited (“Premier”)
on grounds of aiding and abetting certain entities related to Mr. Ketan Parekh in large scale market manipulation of
shares of ZEEL. Pursuant to the said order, SEBI has warned ZEEL and the said Promoter companies and has
cautioned that any similar activity or instances of violation or non-compliance of the provisions of the SEBI Act,
1992 and the rules and regulations framed thereunder shall be dealt with stringently.
Churu had received a letter dated December 20, 2004 (the “Letter”) from SEBI, stating that Churu was required to
disclose the change of more than 2% in its shareholding of the share capital in Cranes Software International
Limited (“Cranes”) under the provisions of Regulation 13(3) of SEBI (Prohibition of Insider Trading) Regulations,
1992 (the “Insider Trading Regulations”). Subsequently, SEBI, had issued a notice dated February 4, 2008 to
Churu (the “Notice”), alleging that Churu has failed to comply with the disclosure requirements under the Insider
Trading Regulations and it was asked to show cause as to why an inquiry should not be held against it in terms of
relevant SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 and
why a penalty should not be imposed under the provisions of the Section 15A(b) of the SEBI Act, 1992. In
response to the Notice, Churu has filed a consent application dated March 24, 2008 with SEBI requesting SEBI,
inter alia, to drop the enquiry and penalty proposed under the Notice. Subsequently, pursuant to a letter dated
September 11, 2008 issued by Churu seeking permission to offer Rs. 1,00,000 towards settlement terms and Rs.
50,000 towards administrative expense, and a letter dated October 21, 2008 issued by SEBI intimating its approval
to settle the matter on such payments, Churu paid a total amount of Rs. 1,50,000 pursuant to its letter dated October
31, 2008 to enable the issuance of an order by SEBI as per the consent terms. Pursuant to a consent order dated
November 11, 2008, SEBI has disposed the adjudication proceedings against Churu. However, notwithstanding the
consent order, SEBI has reserved the right to take enforcement actions against Churu in the event any
representations made by it are found to be untrue and that it has breached any clause in the undertakings filed by it
during the proceedings. For details regarding the Notice and other correspondences between Churu and SEBI in
this regard, see section titled “Outstanding Litigations and Material Developments” beginning on page 280.
Pursuant to its order dated March 2, 2001, SEBI had initiated an investigation against Premier for alleged
manipulation of the price of the scrip of Global Trust Bank. An ex-parte ad interim order dated December 31, 2002
was passed by SEBI restraining Premier from buying, selling, transferring, pledging, disposing off or dealing in
other manner, the shares of Global Trust Bank till the investigations were concluded. However, the said ex-parte ad
interim order was vacated pursuant to an order dated June 21, 2004 passed by SEBI.
Further, SEBI had, pursuant to its order dated June 30, 2004 (order no. SRO/ADJ/EIF/2002/I/3641), imposed a
ix
penalty of Rs. 25,000 on Shriram City Union Finance Limited, a company which has Mr. Arun Duggal, one of our
Directors, on its board of directors, for violation of Regulation 7(3) read with Clause (b) of Section 15A of the
SEBI Act.
2. Certain of our Promoters and Group Companies have been involved in criminal proceedings.
Certain of our Promoters and Group Companies have been involved in criminal proceedings. These proceedings
are at various stages of adjudication before various courts and tribunals and any adverse order or direction by the
concerned authorities could have a material adverse impact on our business or cause the price of our Equity Shares
to decline. A brief description of the criminal proceedings against such Promoters and Group Companies are as
described in the table below.
S.
No.
Complainant/
Applicant
Promoters
Mr. Subhash Chandra
1.
Mr. Sandeep Pal
Singh
Name & Address of the
Court/ Arbitration
Panel
Compensation
claimed, if any
Brief Description of Case
Fourth Additional Sessions
Judge, Thane
-
The complainant had filed the complaint
for alleged infringement of the
complainant’s copyright of the film
‘Jaan Se Badhkar’ against Mr. Subhash
Chandra in his capacity as a director of
ZEEL. This matter is currently pending.
Simultaneously, a revision petition
against this complaint filed by Mr.
Subhash Chandra and others was allowed
by the Sessions Judge. However, the
order of the Session Judge was stayed by
the order of the High Court dated
February 10, 2003.
Certain cheques issued by Singhal
Swaroop Ispat Limited in favour of the
complainant were dishonored. Hence the
complainant has filed this complaint
against Mr. Subhash Chandra in his
capacity as a director of Singhal Swaroop
Ispat Limited.
Certain cheques issued by Singhal
Swaroop Ispat Limited in favour of the
complainant were dishonored. Hence the
complainant has filed this complaint
against Mr. Subhash Chandra in his
capacity as a director of Singhal Swaroop
Ispat Limited.
The complainant has filed this complaint
against Singhal Swaroop Ispat Limited,
Mr. Subhash Chandra (in his capacity as
director of Singhal Swaroop Ispat
Limited) and others, on the grounds of
failure to make the requisite payments as
consideration for certain scrap materials
purchased by them.
The complainant has filed a complaint
against Singhal Swaroop Ispat Limited
and Mr. Subhash Chandra (in his
capacity as director of Singhal Swaroop
Ispat Limited), along with an application
under section 3(2) of the Criminal Law
(Amendment) Ordinance, 1944 seeking
attachment of certain specified properties
belonging to the Singhal Swaroop Ispat
Limited. Mr. Subhash Chandra has
moved an application stating that such
specified properties are not owned by
him and that he has no interest in the
2.
Abhudaya
Cooperative
Bank Limited
7th Metropolitan Magistrate,
Mumbai
Rs. 14,898,389
3.
Ceat
Financial
Services Limited
19th Court, Ballard Pier,
Mumbai
Rs. 9,45,440
4.
Maharashtra
State
Trading
Corporation
47th
Court,
Mumbai
Rs. 1,90,77,000
5.
Maharashtra
State
Trading
Corporation
Small
Causes
Mumbai
Esplanade,
Court,
-
x
S.
No.
6.
Complainant/
Applicant
Mr.
Kanitkar
Court/ Arbitration
Panel
Agasti
Junior Magistrate
Class, Pune
First
Compensation
claimed, if any
-
same. The application is currently
pending.
The complaint has been filed against Mr.
Subhash Chandra, in the capacity of the
Chairman and Managing Director, Zee
Marathi, the news editor, Zee Marathi
and Mr. Arun Mhetre before the Judicial
Magistrate First Class, Pune alleging
defamation in a news item telecast on
Zee Marathi channel on February 15,
2006. The matter is stayed by an adinterim order of High court dated
September 18, 2008.
Mr. Subhash Chandra and the other
respondents have filed a criminal writ
petition before the Bombay High Court
dated November 15, 2006 seeking to
quash the process issued against them by
the Judicial Magistrate First Class, Pune
in the above mentioned criminal
complaint on May 9, 2006. The Judicial
Magistrate First Class, Pune had, by an
order and direction dated August 8, 2008
directed Zee News Limited to telecast an
apology. The High court by an order
dated dated September 18, 2008 stayed
the proceedings before the Judicial
Magistrate First Class, Pune.
Mr. Ashok Goel
1.
Deputy Registrar
of
Companies,
Maharashtra,
Mumbai
19th Court, Metropolitan
Magistrate,
Esplanade,
Mumbai
Prajatma Trading Company Private Limited
1.
Registrar
of Additional
Chief
Companies,
Metropolitan
Magistrate,
Mumbai
19th Court, Esplanade,
Mumbai
2.
Registrar
Companies,
Mumbai
of
Additional
Chief
Metropolitan
Magistrate,
19th
Court,
Esplanade,
Mumbai
Zee Entertainment Enterprises Limited
1.
State
of 7th Additional Sessions
Maharashtra
Judge, Bhoiwada
-
The complaint has been filed against Mr.
Ashok Goel and the other directors,
erstwhile and present, and the erstwhile
company secretary of Essel Propack
Limited. It has been alleged that
company had failed to take the obtain the
approval of the general body of its
shareholders with respect to corporate
guarantee of Rs. 10 crores given by the
company to ICICI Bank Limited.
-
The complaint has been filed against
Prajatma Trading Company Private
Limited on the grounds of violation of
the provisions of section 305(1) of the
Companies
Act
pertaining
to
irregularities in disclosures to be made
by the company upon appointment or
relinquishment of office.
Limited under the provisions of section
629(A) of the Companies Act.
-
-
xi
The complaint has been filed pursuant to
a first information report filed by Mr.
Rajeev Suri before the 7th Additional
Sessions Judge, Bhoiwada, against Mr.
Santosh Shinde and Zee Entertainment
Enterprises Limited for telecasting the
song ‘Rim Jhim Barse” from the film
“Manzil” without obtaining requisite
permission for the same.
S.
No.
Complainant/
Applicant
Court/ Arbitration
Panel
Compensation
claimed, if any
2.
Mr.
Shinde
High Court of Bombay
-
3.
Registrar
Companies,
Mumbai
of
Additional
Chief
Metropolitan, Magistrate,
19th Court, Esplanade
-
4.
Registrar
Companies,
Mumbai
of
Additional
Chief
Metropolitan, Magistrate,
19th Court, Esplanade
-
The writ petition has been filed seeking
to quash the first information report filed
by Mr. Rajeev Suri based on a terms of
settlement executed between Mr. Rajeev
Suri and Zee Entertainment Enterprises
Limited
The complaint has been filed against Zee
Entertainment Enterprises Limited for
alleged non-refund of certain share
application money in violation of section
113 of the Companies Act and for refund
of the said application money.
Entertainment Enterprises Limited for
alleged failure to refund excess amounts
paid with respect to certain share
application money in violation of section
73(2B) of the Companies Act and for
refund of the share application money.
Chief Judicial Magistrate,
Saraikela
-
Santosh
ETC Networks Limited
1.
State
of
Jharkhand
2.
U.V Educational
Society
Kanpur
-
3.
Brihanmumbai
Municipal
Corporation
Metropolitan
Vile Parle
-
Zee News Limited
1.
Mr. Mukti Nath
Jha
2.
Mr.
Deepak
Nikhalje
Magistrate,
Howrah
Rs. 4,000,000
37th
Sessions
Court,
Esplanade, Mumbai
-
The matter has been filed against ETC
Networks Limited for alleged criminal
breach of trust and cheating by the
company under sections 406 and 420 of
the Indian Penal Code, 1860.
The matter has been filed against ETC
Networks Limited for alleged criminal
breach of trust and cheating under
sections 120B, 406 and 420 of the Indian
Penal Code, 1860.
ETC Networks Limited on the ground
that the company did not hold a valid
factory permit.
News Limited for the telecast of
allegedly defamatory material during the
course of the programme titled ‘Oder
Bolte Dao’ telecast in the Zee Bangla
channel.
News Limited for the telecast of
allegedly defamatory material in a news
item telecast on Zee News channel on
May 28, 2007.
Zee News Limited and the other
respondents have filed two criminal
revision applications (criminal revision
application nos. 963 of 2007 and 945 of
2007) against Mr. Deepak Nikhalje
before the 58th Sessions Court,
Esplanade, Mumbai seeking to quash the
order passed by the 37th Sessions Court
on June 26, 2007.
Wire and Wire (India) Limited
1.
State
of Additional
Chief
Maharashtra
Metropolitan
Magistrate,
Esplanade, Mumbai
-
The company has been alleged to have
violated the copyright of the film “Bhago
Bhoot Aya”.
For further details, see the section titled “Outstanding Litigations and Material Developments” on page 280.
xii
3. We intend to utilize a portion of the proceeds of the Issue towards part repayment of certain loans and
deposits received by our Company from one of our Promoters.
Our Company has availed of an unsecured loan from Churu Trading Company Private Limited, one of our
Promoters. We intend to utilize Issue proceeds of upto Rs. 30,000 lakhs towards repayment of a portion of such
loan availed by us. For further details regarding the loan, a portion of which shall be repaid out of the Issue
proceeds, see “Objects of the Issue” on page 26.
4. Our Company has not conducted any independent valuation for the acquisition of the DTH Equipment Unit
of Essel Agro Private Limited.
The Company had acquired the DTH Equipment Unit (“DEU”) business of Essel Agro Private Limited (“EAPL”)
in Fiscal 2007, pursuant to an agreement dated December 31, 2006. Pursuant to the said agreement, the DEU
business of EAPL was transferred in favour of the Company for a total consideration of Rs. 5,00,000, in addition to
the goodwill arising on acquiring of the business is Rs. 4,511.78 lakhs which was capitalized as intangible asset.
Our Company had not conducted any independent valuation in relation the acquisition of the DEU business. For
further details, see “History of the Company and other Corporate Matters” and “Financial Statements” on pages 55
and 104 respectively.
5. Our results of operations may not be exactly comparable to the past financials.
We have recently undertaken corporate restructuring wherein Zee Entertainment Enterprises Limited have
transferred its direct consumer services business to the Company; and Siti Cable Network Limited and New Era
Entertainment Network Limited have transferred their entire business and whole of undertakings to our Company.
Further, we have also reduced our share capital, by way of canceling three Equity Shares for every four Equity
Shares. Therefore, our results of financial operations, may not be exactly comparable with our past performance.
6. We have incurred losses in the past and have a negative networth.
We have incurred losses (PAT) for the three months period ending June 30, 2008 and during the year ended March
31, 2008 amounting to Rs. (13,245.86) lakhs and Rs. (41,042.20) lakhs respectively. Our networth as at June 30,
2008 and as at March 31, 2008 was Rs. (61,107.57) lakhs and was Rs. (47,861.71) lakhs, respectively. In the event
we continue to incur such losses in the future, it would adversely affect our results of operations.
7. Any negative operating cash flow in the future could have an adverse effect on our results of operations.
We had a net cash flow amounting to Rs. (11,227.24) lakhs for the three months period ending ending June 30,
2008 from investing activites and a negative net cash flow amounting to Rs. 2,020.41 lakhs for the three months
period ending ending June 30, 2008 from financing activites majorly because of our increased subscriber
acquisition cost, marketing, sales and distribution expenses.
There can be no assurance that we will not experience periods of negative cash flow in the future. If the negative
cash flow trend persists in future, our Company may not be able to generate sufficient amounts of cash flow to
finance our Company’s working capital and capital expenditure requirements.
8. Our lenders have imposed certain restrictive conditions on us under our financing arrangements.
Under certain of our existing financing arrangements, the lenders have the right to withdraw the facilities in the
event of any change in circumstances, including but not limited to, any material change in the ownership or
shareholding pattern or management of the Company. Further, certain of our financing arrangements impose
restrictions on the utilization of the loan for certain specified purposes only.
We are also required to obtain the prior consent from our lenders for, among other matters, paying any dividends to
the Equity Shareholders, undertaking any material change in the nature of our business and changing the
shareholding pattern of our Promoters or of our management. One of our financing documents provides that on
default in repayment of the facility availed, the lender may direct us to convert the whole or such part of the
amount outstanding to the lender into fully paid-up equity shares at the market rate prevalent on the date of such
conversion. Further, we cannot make any investments in excess of Rs. 500 lakhs in a Fiscal without the prior
written approval of the certain lenders. For more information please refer to “Financial Indebtedness” on page 274.
xiii
There can be no assurance that we will be able to obtain lender consents on time or at all. This may limit our ability
to pursue our growth plans and limit our flexibility in planning for, or reacting to, changes in our business or
industry.
9. Our logo and trademark is not owned by us.
We have made an application to the Registrar of Trademark, New Delhi dated April 10, 2008 for registration of our
logo which is currently pending approval of the necessary authorities. We are using logo of ZEEL in our logo, for
which we have taken the approval from ZEEL. Not being the license holder for such logos and trademark, we do
not enjoy the statutory protection accorded to registered logos and trademarks and may be subject to infringement
of our intellectual property by third parties. For more information, please refer to “Government Approvals” on
page 320.
10. DTH services may become obsolete with the development of technology.
As newer technologies are developed and implemented, the DTH technology, or the set top boxes, may be become
technologically obsolete and may be replaced by newer technology, potentially reducing or eliminating the need for
DTH services. A significant reduction in services that we provide as the result of product obsolescence and
technological improvements shall have a material adverse effect on our business.
11. Equity shares of one of our Group Companies, Solid Containers Limited, are currently suspended from
trading on the BSE.
The shares of the Solid Containers Limited are currently suspended from trading on the BSE. The BSE by its letter
(reference no. DCS/DL_SUSP/502460/47) dated October 11, 2004 issued to Solid Containers Limited, has
suspended the trading of the securities of the company for non compliance of listing agreement. In the year 2007,
an application was made by Solid Containers Limited to the BSE for revocation of suspension of trading in
securities of Solid Containers Limited. In this regard, BSE has replied and agreed to consider the application for
revocation subject to the certain conditions, based on their internal guidelines.
12. We are involved in certain legal and other proceedings in India due to which we may face certain liabilities.
We are defendants in legal proceedings incidental to our business and operations. These legal proceedings are
pending at different levels of adjudication before various courts and tribunals. Should any new developments arise,
such as a change in Indian law or rulings against us by appellate courts or tribunals, we may need to make
provisions in our financial statements, which could adversely impact our business results. Furthermore, if
significant claims are determined against us and we are required to pay all or a portion of the disputed amounts, it
could have a material adverse effect on our business and profitability. The details of litigations against us are as
under:
S.no
Type of Case
Number of Cases
1.
Criminal proceedings
2.
Civil cases
3.
Intellectual property cases
4.
Consumer disputes
Total amount involved
Approximate Amount claimed (if
quantifiable)
1
4
1
120
N.A
N.A
Rs. 5,00,000
Rs. 327.50 lakhs
Rs. 332.50 lakhs (approx)
For details please refer to “Outstanding Litigations and Material Developments” on page 280.
13. Wire and Wireless (India) Limited, one of our Group Companies is engaged in business activities of
digitalised cable which compete with our business and may adversely affect our subscriber base.
Wire and Wireless (India) Limited, one of our Group Companies is engaged in business activities of digitised
cable, wherein the targeted customers are same for our business and the business of Wire and Wireless (India)
Limited. This may result in loss of target subscribers to our business, affecting our subscriber base. While we have
not in the past faced any conflict, we cannot assure you that no such conflict will arise in the future that may
adversely affect our financial conditions and prospects.
xiv
14. Information contained in our restated financial statements included in this Letter of Offer has been
extracted from our audited financial statements and our auditor's reports on those financial statements are
qualified.
Auditors qualifications and remarks (Consolidated)
Auditors qualifications/remarks, which require any corrective adjustment in the financial information, are as
follows:I.
II.
Holding Company
a.
The auditors have qualified the report for the financial year ended 31st March, 2004 and 2005 for
non recoverable advances aggregating to Rs.12, 284.30 lacs included in other advances due from
foreign companies as a part of the project taken over. Accordingly, adjustments are made to the
financial statement, as restated for the year ended 31st March, 2004 to account for the loss of Rs.
12,084.30 lacs on such advances and balance Rs. 200.00 lacs recovered.
b.
The auditors have qualified the report for the financial year ended 31st March 2004, 2005 and
2006 regarding carrying value of investment in subsidiaries. The carrying value of investment in
subsidiaries as at 2006 is aggregating to Rs.10,687.15 lacs. Accordingly, adjustments for
Rs.1,247.05 lacs are made to the statement of financial statement, as restated for the year ended
31st March, 2004 to account for the loss on permanent diminution in the value of investment.
Balance Rs. 9,440.10 lacs are considered good and recoverable based on the subsequent event for
the project under implementation undertaken by the subsidiary and also in view of long term
involvement and relation with the subsidiary.
Subsidiaries
Agrani Wireless Services Limited (AWSL)
a.
The auditors in their audit report for financial year ended 31st March, 2004, 2005 and 2006 have
qualified the report for preparing the financial statement as going concern basis though there was
temporary suspension and no major development on the project. Accordingly group has made
necessary adjustment in these financial statements as might be necessary, where the subsidiary
may no longer be a going concern.
b.
The auditors in their audit report for financial year ended 31st March 2004, 2005 and 2006 have
qualified the report for non compliance of AS-28 “Impairment of Assets”. Necessary adjustment
has been made in respective previous year for impairment of assets.
Auditor qualification/ remarks, which do not require any corrective adjustment in the financial information
are as follows:I.
Holding Company
a.
2006 regarding recoverability of loans and advances to subsidiaries and other companies. Loans
and advances outstanding (due from subsidiaries) as at 2006 is aggregating to Rs. 3,275.34 lacs.
The said loans and advances is considered good and recoverable based on the subsequent event
for the project under implementation by the subsidiary and also in view of long term involvement
and relation with the subsidiary.
b.
The auditors have qualified the report for the financial year ended 31st March, 2004, 2005 and
2006, the Company has given interest free loans to certain companies, which is not in accordance
with provision of sub section (3) of section 372 A of the Companies Act, 1956.
c.
The auditors have qualified the report for the financial year ended 31st March, 2004 and 2005 for
not providing exchange difference loss of Rs 1,029.05 lacs and Rs. 1072.79 lacs respectively as
required by AS -11 on realignment of foreign exchange advances Rs. 12,284.30 lacs. The
Company has not adjusted the same in restated account as the said foreign exchange advances is
fully provided in the accounts.
xv
II.
d.
The auditors have qualified the report for the financial year ended 31st March, 2007, for the
managerial remuneration amounting to Rs. 12.94 paid to managing director pending approval of
the Central Government. The Company has not adjusted the restated account as subsequently
approved by the Central Government.
e.
The auditors in their audit report for financial year ended 31 March 2007, has drawn reference to
note on preparing the financial statements on going concern basis.
Subsidiary Companies
•
•
•
•
Bhilwara Telenet Services Private Limited (BTSL)
a.
The auditors have qualified the report for the financial year ended 31st March, 2004 and
2005, that BTSL has given interest free loans to fellow subsidiaries, which is not in
accordance with the provision of sub section (3) of section 372 A of the Companies Act,
1956. These loans are to fellow subsidiaries hence the qualification has no effect on the
restated summary statement of profit and loss of the group as being inter company
transaction eliminated in the process of consolidation.
b.
The auditors in their audit report for the year ended March 31, 2004 has drawn reference
regarding status of the BTSL, being considered by management as a private limited
company. The Company has applied to the Registrar of Companies, Delhi for restoration of
its private limited company status. Pending approval, the financial statements of the
company are audited considering the company as a public limited company.
Smart Talk Private Limited (STPL)
a.
2005 that STPL has given interest free loans to fellow subsidiaries, which is not in
restated summary statement of profit and loss of the group.
b.
regarding status of the STPL, being considered by management as a private limited
company are audited considering the company as a public limited company
Quick Calls Private Limited (QCPL)
a.
2005 that QCPL has given interest free loans to fellow subsidiaries, which is not in
b.
regarding status of the QCPL, being considered by management as a private limited
Agrani Convergence Limited (ACL)
2007 that in view of discontinuation of major part of business activity going concern status is in
doubt. Accordingly fixed assets, current assets, loans and advances have been carried at estimated
net realizable value by ACL.
•
Agrani Satellite Services Limited (ASSL)
xvi
2006 that pre-operative expenses incurred on satellite service project are for doing ground work
and creating capabilities for promoting and implementing such project. In case, these expenses
can not be capitalized with the fixed assets on completion of the project, these will be treated
otherwise, which may erode the net worth of ASSL. Further the auditor in the report for the
financial year ended 31st March, 2005 and 2006 have expressed doubt on going concern basis of
ASSL. In view of significant progress towards in the project, renewed authorization from Govt.
of India, entering into a satellite capacity agreement with the vendor and additional funds
provided by the holding company, the financial statements for the year ended 31st March, 2007
have been prepared on going concern basis.
•
Agrani Telecom Limited (formerly known as Essel Telecom Holding Limited) (ATL)
The auditors have qualified the report for financial year ended 31st March, 2005 and 2006, for
non compliance of AS-13 “Accounting for Investment” related to investment in fellow
subsidiaries and effect of this on loss for the year and net worth of ATL. These investments are in
fellow subsidiaries hence the qualification has no effect on the restated summary statement of
profit and loss of the group as being inter company transaction eliminated in the process of
consolidation.
•
a.
The auditors have qualified the report for financial year ended 31st March, 2004, 2005 and
2006 that AWSL has given interest free loans, not in accordance with the provision of
section 372A (3) of the Companies Act, 1956.
b.
The auditors have reported for the financial year ended 31st March, 2005 and 2006 regarding
non providing for permanent diminution in the value of investment as required by AS-13
‘Accounting for Investment’ in fellow subsidiaries. These investments are in fellow
subsidiaries hence the qualification has no effect on the restated summary statement of profit
and loss of the group as being inter company transaction eliminated in the process of
consolidation.
c.
The Auditors in their report for the year ended 31st March, 2004 and 2005 expressed their
inability to comment on the recoverability of interest free loans Rs. 1,511.64 lacs and Rs.
5,275.64 lacs outstanding on 31.03.2004 and 31.03.2005. The loans realized in subsequent
years, hence no adjustment required.
Auditors qualifications and Remarks (Standalone)
Audit qualification / remarks, which require any corrective adjustment in the financial
information, are as follows:
a)
2005 for non recoverable advances aggregating to Rs. 12,284.30 lacs included in other
advances due from foreign companies as a part of the project taken over. Accordingly,
adjustments are made to the financial statement, as restated for the year ended 31st March,
2004 to account for the loss of Rs. 12084.30 lacs on such advance and balance Rs. 200.00
lacs recovered.
b) The auditors have qualified the report for the financial year ended 31st March 2004, 2005
and 2006 regarding carrying value of investment in subsidiaries. The carrying value of
investment in subsidiaries as at 31st March, 2006 is aggregating to Rs.10,687.15 lacs.
Accordingly, adjustments for Rs. 1,247.05 lacs are made to the statement of financial
statement, as restated for the year ended 31st March, 2004 to account for the loss on
permanent diminution in the value of investment. Balance Rs. 9,440.10 lacs is considered
good and recoverable based on the subsequent event for the project under implementation
undertaken by the subsidiary and also in view of long term involvement and relation with the
subsidiary.
xvii
Other audit qualification / remarks, which do not require any corrective adjustment in the
financial information are as follows:
The auditors have qualified the report for the financial year ended 31st March 2004, 2005
and 2006 regarding recoverability of loans and advances to subsidiaries and other
companies. Loans and advances outstanding (due from subsidiaries) as at 2006 is
aggregating to Rs. 3,275.34 lacs. The said loans and advance is considered good and
recoverable based on the subsequent event for the project under implementation by the
subsidiary and also in view of long term involvement and relation with the subsidiary.
The auditors have qualified the report for the financial year ended 31st March, 2004, 2005
and 2006, that the Company has given interest free loans given to certain companies, which
are not in accordance with provision of sub section (3) of section 372 A of the Companies
Act, 1956.
2005 for not providing exchange difference loss of Rs 1,029.05 and Rs. 1072.79 lacs
respectively as required by AS -11 on realignment of foreign exchange advances Rs.
12,284.30 lacs. The Company has not adjusted the same in restated account as the loss on
such advance in foreign exchange is fully provided in the accounts (Refer Note 12.1.1 of
Para C Annexure G of Standalone Restated Financial Statements).
managerial remuneration amounting to Rs. 12.94 lacs paid to managing director pending
approval of Central Government. The Company has not adjusted the restated account as
subsequently approved by the Central Government.
The auditors in their audit report for the financial year ended 31 March 2007, has drawn
reference to note on preparing the financial statements on going concern basis.
Auditors comment under MAOCARO 1988/ CARO 2003
Fixed Assets:•
In the financial year ended 31st March, 2006 and 2007, auditors have reported that there
is a phased program of Physical verification of fixed assets except for consumer
premises equipments installed at the customers premises, which is reasonable having
regard to the size of the Company and nature of its assets. Pursuant to the program, the
physical verification of certain assets was carried out during the period. The
reconciliation of the fixed assets physically verified with the books is in progress and
differences, if any, will be accounted on its determination.
•
In the financial year ended 31st March, 2008, auditors have reported that the fixed
assets, except consumer premises equipments installed at the customer premises have
been physically verified by the management as per the phased program of verification
and no discrepancies were noticed on such verification.
•
Interest free loan granted to parties covered u/s 301 of the Companies Act, 1956:In the financial year ended 31st March, 2005 and 2006, the auditors have reported, that
the Company has granted interest free unsecured loans to companies covered in the
register maintained under section 301 of the Act. The maximum amount involved during
the financial year ended 31st March, 2006 and 2005 was Rs. 50.73 crores and Rs. 69.12
crores respectively and outstanding balance as at 31st March 2006 and 2005 was Rs. Nil
and Rs. 50.73 crores respectively. Further in financial year ended 31st March, 2007
auditor has reported that loans given to parties covered in the register maintained u/s 301
of the Companies Act, 1956, aggregating to Rs. 12.40 Crores are provided at the interest
rate prejudicial to interest to the Company.
Internal Audit:-
xviii
In the financial year ended 31st March, 2007, auditors have reported that the Company has
an internal audit system commensurate with its size and nature of its business. However,
the same needs to be strengthened as regard scope and periodicity.
Statutory Dues:•
In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008 auditors have
reported that the Company is regular in depositing undisputed statutory dues including,
investor education and protection fund, employees state insurance, income tax, sales tax,
wealth tax, custom duty, excise duty, cess, provident fund and other statutory dues,
wherever applicable, with appropriate authorities except delay in few cases.
•
In the financial year ended 31st March 2007 and 2008. The auditors have reported that,
there is no dues of Income Tax, Sales Tax, Custom Duty, Wealth Tax, Excise Duty and
Cess which have not been deposited on account of any dispute except the following:
(Rs. In lacs)
Name of Statue
Utter Pradesh
Entertainment &
Betting Tax Act, 1979
Utter Pradesh
Entertainment &
(As Applicable to
Uttarakhand)
Nature of dues
Period to
which
pertain
Forum
where
dispute is
pending
Amount
stand as at
31st March,
2008
Amount
stand as at
31st March,
2008
Entertainment
Tax
2003-2004
to 20062007
Allahabad
High Court
920.20
920.20
Entertainment
Tax
2003-2004
to 20062007
High Court
of
Uttarakhand
88.36
-
Accumulated losses:In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008, auditors have
reported that the accumulated losses (without considering audit qualifications) are more than
fifty percent of its net worth. Further, the Company has incurred cash losses in all the above
financial years.
In the financial year ended 31st March, 2004, 2005 and 2008 auditors have reported, default
in repayment to financial institutions / banks as under:(Rs. in lacs)
Particulars
During the year ended 31st March
2004
Financial Institutions
Banks
2005
Banks
2008
Axis Banks
Axis Banks
Axis Banks
IDBI Banks
Principal
Interest
Period of default
50.00
-
1.56
45.06
1-3 Month
1-2 Month
1,000.00
126.53
1-30 Days
3,750.00
500.00
3,250.00
-
65.49
31 days
16 days
28 days
23 days
Fund utilization:In the financial year ended 31st March, 2004, 2007 and 2008 auditors have reported that the
company has used short term funds amounting to Rs. 2,479.50 lacs, Rs. 51,626.07 lacs and
25,300.93 lacs respectively for long term investments.
Other Non Compliance:
xix
For the financial year ended 31st March, 2004, the Company did not form an audit
committee of its Board of Directors as required under section 292A of the Companies Act,
1956.
For the financial year ended 31st March, 2004 and 2005, the Company did not have a whole
time company secretary as required under section 383A of the Companies Act, 1956.
For more details see “Financial Statements” on page 104.
15. There were shortfalls in the performance of Essel Propack Limited, one of our Group Companies, when
compared to the promises made in its last public issue.
Essel Propack Limited, one of our Group Companies, undertook a rights offering in 1995. There were shortfalls in
the performance of the offering when compared against the projections made in the offer documents. The amount
of shortfalls in performance as compared to the projections are as described hereinunder.
(Rs. in lakhs)
Sales
PBT
PAT
1994-95
Projected
Actual
6,397
8000
1,390
1,501
1,390
1,501
1995-96
Projected
Actual
10,686
11,356
2,352
2,113
2,352
2,113
1996-97
Projected
Actual
12,979
15,267
2,899
2,858
2,899
2,083
In the financial year 1995-96, the variation between the projected and the actual figures was attributable to the
devaluation of Rupee by 12%, rise in polymer prices for most of the financial year, import of 53% of the raw
materials consumed by the company, and delay in anticipated changes in aluminium tubes in view of the product
design changes.
In the financial year 1996-97: The variation between the projected and actual figures is attributable to the revision
in the schedule of project implementation resulting in the issue proceeds partly remaining unutilized which were
thereafter invested in interest bearing short term instruments.
16. We have not placed any orders for acquisition of Consumer Premises Equipments.
We intend to utilize Rs. 79,012 Lakhs from the net proceeds of the Issue towards acquisition of consumer premises
equipments (“CPEs”). We have received quotes from various suppliers for the estimated supplies of 28 lakhs units
of CPEs over the next two Fiscals. Out of the estimated purchase of 28 lakhs units, our Company has already
acquired 8.5 lakh units for a total consideration of Rs. 22,905.50 lakhs. In addition, our Company would be
required to purchase an additional 19.5 lakhs units for which we have not placed any orders. There can be no
assurance that we would be able to acquire the additional CPEs at the prices quoted by the suppliers in such orders.
For more details see “Objects of the Issue” on page 26.
17. We import a major part of the Consumer Premises Equipments and there can be no assurance of regular
supply of such equipments at competitive prices.
We are dependant on external vendors for a regular supply of CPEs and majority of such equipments are imported
from foreign suppliers. We import nearly 85% of all our CPEs from certain external suppliers and our liabilities on
account of import duty and other taxes amount to 21.26% on such imports.
We have not entered into any firm/long term arrangements for supply of such equipments with the vendors. We
may not guarantee a regular supply of such equipments at competitive prices. Further, any change in government
policy on imports of such goods, including import duties, may affect our procurement of such equipments at a
reasonable cost, which may adversely affect our business and results of operations.
18. Significant competition from new entrants, existing players and cable operators.
Significant additional competition in the DTH industry may result in reduced market share and thereby negatively
affect our revenues and profitability. They may also benefit from greater economies of scale and operating
efficiencies. Maintaining or increasing our market share will depend on effective marketing initiatives including
advertising spend and our ability to improve our processes. We cannot assure you that we will be able to compete
effectively with other competitors like Tata Sky, Big TV, Airtel Digital TV, Sun Direct and IP TV. Further, we
xx
face significant competition from Multi System Operators and Local Cable Operators which may result in reduced
market share and thereby negatively affect our revenues and profitability. Such competition may also lead to
increase in churn rate of our customers. Failure by us to compete effectively may adversely affect our pricing and
margins and may have a material adverse effect our business and profitability.
19. The success of our business is substantially dependent on our management and technical team, our inability
to retain them could adversely affect our business.
Our ability to sustain our growth depends, in large part, on our ability to attract, train, motivate and retain skilled
personnel. Our ability to hire and retain additional qualified personnel will impact our ability to continue to expand
our business. We believe that there is a significant demand for personnel who possess the skills needed in our
business areas. An increase in the rate of attrition for our experienced employees, would adversely affect our
business. We cannot assure you that we will be successful in recruiting and retaining a sufficient number or
personnel with the requisite skills to replace those personnel who leave. This may adversely affect our business and
results of operations. Further we cannot assure you that we will be able to re-deploy and re-train our personnel to
keep pace with continuing changes in our business.
20. We operate in a highly capital intensive sector.
We are in a capital-intensive industry. The cost of launch of additional channels and new transponders is highly
capital intensive. The returns on our ventures would only start at a later date. Our return on capital investment
depends upon, among other things, competition, subscriber acquisition cost, demand, government policies, rate of
interest and general economic conditions.
21. Our business plans may need substantial capital and additional financing to meet our requirements.
Our proposed business plans are being partly proposed to be funded through the proceeds of this Issue. However
the actual amount and timing of future capital requirements may differ from estimates including but not limited to
unforeseen delays or cost overruns, unanticipated expenses, market developments or new opportunities. We might
not be able to generate internal cash in our Company as estimated and may have to resort to alternate sources of
funds. If we decide to raise additional funds through the debt route, the interest obligations may increase and we
may be subject to additional covenants, which could limit our ability to access cash flows from operations.
22. We may not be able to sustain or increase our ARPU.
In the growing phase of competition, our cost of acquisition of customers may increase and our average revenue
per user may decrease. This reduction in ARPU may adversely impact our financial performance. We cannot assure
you that we will be able to increase or sustain our average revenue per user and compete effectively with other
players, which could have a material adverse effect on our business and profitability.
23. We enter into related party transactions.
During the course of our business, we enter into related party transactions majorly with Zee Entertainment
Enterprises Limited for advertising our services over the television media, Zee Turner Limited for purchase of
content and with various other related parties for purposes of payment of rent of office premises. For more
information please refer to “ Notes to Risk Factors- Related Party Transactions” on page xxix.
24. Our business is largely depended on broadcasters and satellite transponders.
We depend on the broadcasters for their signal input and on the transponders to reach up to the end subscribers.
Our business operation forms a vital link between the broadcaster and transponders. There can be no assurance that
we will have unrestricted access to the signals or with respect to their quality, each of which could have an adverse
impact on our ability to offer quality DTH services and could adversely affect our results of operations.
25. Our insurance coverage may not be adequately protect us against certain operational risks or claims, and we
may be subject to losses that might not be covered in whole or in part by existing insurance coverage.
We maintain insurance for a variety of risks, including, among others, for risks relating to fire, burglary and certain
other losses and damages. There could be other risks and/or losses for which we are not insured, such as loss of
xxi
business, environmental liabilities and natural disasters. Moreover consumer premises equipments installed at the
subscribers place is not covered by any insurance. Any such losses could adversely affect on our financial
conditions and prospects.
26. Our Subsidiaries have incurred losses in the past and have had negative networth.
Our Subsidiaries have incurred losses (as per audited financial statements) in the recent Fiscal Years, as set forth in
the table below:
(Rs. in lakhs)
Name of the Company
2008
3.47
(95.77)
Agrani Convergence Limited
Integrated Subscriber Management Services Limited
Year ending March 31
2007
(43.28)
(22.71)
2006
(205.52)
167.04
Some of our Subsidiaries have negative networth (as per audited financial statements) in the recent Fiscal Years, as
set forth in the table below:
(Rs. in lakhs)
Name of the Company
2008
(1,610.24)
(16.92)
2007
(1,613.72)
78.85
2006
(1,570.44)
101.39
27. Some of our Promoter companies have incurred losses in the past and have had negative networth.
Some of our Promoter companies have incurred losses (as per audited financial statements) in the recent Fiscal
Years, as set forth in the table below:
(Rs. in lakhs)
Name of the Company
2008
(2.03)
(518.33)
(454.8)
(209.2)
(889.38)*
271.50
(365.1)
(31.9)
Afro-Asian Satellite Communications Limited
Ganjam Trading Company Private Limited
Premier Finance and Trading Company Limited
Prajatama Trading Company Private Limited
Lazarus Investments Limited
Briggs Trading Company Private Limited
Jayneer Capital Private Limited
Ambience Business Services Private Limited
* As at year ended December 31, 2007
** As at year ended December 31, 2006
*** As at year ended December 31, 2005
2007
(2.83)
720.6
(1,145.4)
(341.9)
192.77**
887.7
490.6
18.9
2006
(2.63)
(555.0)
611.8
(776.9)
(250.69)***
(1,073.7)
540.9
232.7
Some of our Promoter companies have negative networth (as per audited financial statements) in the recent Fiscal
Years, as set forth in the table below:
(Rs. in lakhs)
Name of the Company
2008
807.2
(69.1)
7,180.2
2,001.7
(79.3)
Prajatama Trading Company Private Limited
Veena Investments Private Limited
2007
1,325.5
385.7
(15,234.1)
(17,993.8)
(8.1)
2006
(6,283.0)
(1,856.5)
(14,892.2)
(18,881.5)
(14.16)
28. Some of our Group Companies have incurred losses in the past and have had negative networth.
Some of our Group Companies have incurred losses in the recent Fiscal Years, as set forth in the table below:
xxii
(Rs. in lakhs)
Name of the Company
2008
10,746.28
Wire and Wireless (India) Limited
2007
15,491.06
2006
-
Further, ETC Networks Limited, one of our Group Companies has negative networth in the recent Fiscal Years, as
set forth in the table below:
(Rs. in lakhs)
Name of the Company
2008
9669.1
(10,015.50)
Financial Year
2007
163.8
530.08
2006
(6.2)
-
29. Contingent liabilities.
Contingent Liabilities not provided for the last five financial years and for the three months period ending June 30,
2008, on consolidated basis, is as follows:
(Rs. in lacs)
Particulars
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Year ended
March 31,
2007
Year ended
March 31,
2006
Year ended
March 31,
2005
Year ended
March 31,
2004
Estimated amount of
contract remaining to be
executed on capital
account
and
not
provided for (Net of
advance)
4,262.18
4,453.93
4,523.07
1,754.86
0.20
0.20
Bank guarantees given
on
behalf
of
subsidiaries
-
-
-
-
100.00
400.00
Guarantees given on
behalf
of
other
company
-
-
240.00
40.00
540.00
540.00
6,056.40
6,056.40
5,011.10
5,050.05
5,043.27
5,063.27
Guarantees
bank
given
by
[Above
Includes
guaranteed by a related
party]
4,908.60
4,908.60
4,000.00
4,000.00
4,000.00
4,000.00
Claim
against
the
company
not
acknowledge as Debts
479.85
479.85
991.44
961.44
31.44
167.75
Legal Cases against the
company.
Unascertained Unascertained Unascertained Unascertained Unascertained Unascertained
•
The Entertainment Tax Authorities, Noida has raised a demand of Rs. 404.60 lacs on account of
entertainment tax for the period from November, 2003 to February, 2004. The Company has filed petition
against the demand, which is pending. Further the authorities have intimated a total demand of Rs. 920.20
lacs till 31st March, 2007.
•
Entertainment Tax demand Rs. 116.75 lacs (estimated on the basis of various notices issued from time to
time) raised by various entertainment tax authorities of Utrakhand state have been challenged and the
petition is pending before the High Court. The demand has been stayed by the High Court. Notice for
further period has been issued wherein the demand has not been quantified.
xxiii
•
The Company has given a guarantee for the performance of the term and conditions of satellite capacity
agreement between a subsidiary of the company namely Agrani Satellite Services Limited and the vendor,
which is strategically important for the business of the Company.
•
One of the subsidiary company has received a demand notice from Sales Tax Authorities amounting to Rs.
960.00 lacs against which the Sales Tax Authorities had recovered Rs. 22.31 lacs directly by attaching
company’s bank account. This liability was disputed by the Company and appeal filed before the appellate
authorities and the said demand was cancelled by them. The Sales Tax Department issued refund orders
for the amount recovered by them, which is under process.
In the event any of these liabilities fructify in the future, it will adversely affect our results of operations.
30. Grants of stock options under our ESOP Scheme will result in a charge to our profit and loss account and will to
that extent reduce our profits.
We have adopted the ESOP Scheme, under which eligible employees of our Company and our Subsidiaries are
able to participate, subject to such approvals as may be necessary. The total number of Equity Shares arising as a
result of full exercise of options already granted, as on June 30, 2008, would amount to 18,83,550 Equity Shares. For
further details on the exercise price of the option please refer to the section titled “Notes to the Capital StructureESOP Scheme” on page 23.
Under Indian GAAP, the grant of these stock options may result in a charge to our profit and loss account based on
the difference between the fair market value determined on the date of the grant of the stock options and the
exercise price. This expense will be amortised over the vesting period of the stock options.
As per applicable laws, stock options are subject to fringe benefit tax. The fringe benefit tax is payable on the fair
market value of the specified security on the date which the option vests with the employees as reduced by the
amount actually paid by, or recovered from, the employee in respect of such securities. The implementation of
fringe benefit tax may increase our tax costs.
31. Our Registered Office, our Corporate Office and all the properties and premises from which we operate are
not owned by us.
We do not own the premises on which our Registered Office and Corporate Office is located. Further, we do not
own any property or premise used for our operational activities. We operate from rented and leased premises. The
lease agreements for these premises are renewable at our option upon payment of such rates as stated in these
agreements. If any of the owners of these premises do not renew the agreements under which we occupy the
premises or renew such agreements on terms and conditions that are unfavourable to us, we may suffer a disruption
in our operations which could have a material adverse effect on our business, financial condition and results of
operations.
32. Our Registered Office and our Corporate Office are taken on lease from some of our Promoter Group
companies.
Our Registered Office has been taken on leave and licence basis to the Company by Rama Associates Limited, one
of our Promoter Group Companies, for a monthly rental of Rs. 2,12,564. Our Corporate Office has been taken on
right to use basis to the Company by Zee Entertainment Enterprises Limited, one of our Group companies for a
monthly rental of Rs. 35.50 lakhs. For further details, see “Notes to Risk Factors – Related Party Transactions” on
page xxix.
33. We have not entered into any definitive agreements to utilize the proceeds of the Issue.
We intend to use the net proceeds of the Issue for funding our subscriber acquisition cost, repayment of loans
availed by us and general corporate purposes. For more information, see “Objects of the Issue” on page 26. We
propose to raise Rs. 113,121.91 lakhs from the net proceeds of the Issue, out of which we have already deployed an
amount of Rs. 22,905.50 lakhs, till October 31, 2008, towards acquisition of consumer premises equipments.
However, we do not have definitive arrangements for Rs. 60,216.41 lakhs, which is 53.23% of the net proceeds of
the Issue.
xxiv
Further, out of the net proceeds of the Issue, we propose to use Rs. 79,012 lakhs for funding our subscriber
acquisition cost. In addition, we propose to use Rs. 30,000 lakhs for repaying the loans availed by us. If we are
unable to spend the amount on funding the subscriber acquisition costs and repayment of the loans, the balance
funds will be used for augmentation of our working capital and/or for general corporate purposes.
The objects of the Issue have not been appraised by any bank or other financial institution. We have not entered
into any definitive agreements to utilize such net proceeds. Pending any use of the net proceeds of the Issue, we
intend to invest the funds in high quality, liquid instruments including deposits with banks.
34. We operate in a highly regulated industry and our DTH business is subject to government regulation. Any
changes in these regulations or in their implementation could disrupt our operations and adversely affect our
results of operations.
We operate in a highly regulated industry structure. Currently we are regulated by the license agreement entered
with the MIB. Further, our business is subject to extensive government regulation. To conduct our business, we
must obtain various licenses, permits and approvals. Even when we obtain the required licenses, permits and
approvals, our operations are subject to continued review and the governing regulations and their implementation
are subject to change. We cannot assure you that we will be able to obtain and comply with all necessary licenses,
permits and approvals required for our operations, or that changes in the governing regulations or the methods of
implementation will not occur. If we fail to comply with all applicable regulations or if the regulations governing
our business or their implementation change, we may incur increased costs or be subject to penalties, which could
disrupt our operations and adversely affect our business and results of operations.
Also, any changes in the rules, regulations or requirements governing our business may require us to incur
significant expenditure and/or significantly increase our potential liabilities which may impact our financial
position adversely. Further, we may incur loss of revenue and market share if there are any changes in the policies
of Government of India.
35. If the investors who are issued partly paid-up Equity Shares do not pay the amount payable on calls, the
amount raised through the Issue will be lower than the proposed Issue size.
The money payable through further calls for the partly paid-up Equity Shares may not be paid and the amount
raised through the Issue may be lower than the proposed Issue size and may require us to take steps for forfeiture of
such partly paid-up Equity Shares. In the event of such shortfall, the extent of the shortfall will be made by way of
such means available to our Company and at the discretion of the management, including by way of incremental
debt or cash available with us.
36. If we provide inadequate or delayed service, our customers may have claims for substantial penalties against
us.
We may not be able to provide timely and efficient services to our customers. Further, any significant failure of our
equipments and systems will impede our ability to provide services to our clients, have a negative impact on our
reputation, cause us to lose clients, reduce our income and harm our business. This may also lead to claims by our
customers before consumer dispute redressal forums and other judicial authorities resulting in substantial penalties
against us.
37. We may develop or acquire businesses, technologies and personnel, but we may fail to realize the anticipated
benefits of such development or acquisitions and we may incur costs that could significantly negatively impact
our profitability.
In future, we may develop or acquire technologies and products that we believe are a strategic fit with our business.
If we undertake any activity of this sort, we may not be able to successfully develop or integrate such technologies
or products without a significant expenditure of operating, financial and management resources, if at all. Further,
we may fail to realize the anticipated benefits of any such development or acquisition. Future developments or
acquisitions could dilute our shareholders interest in us and could cause us to incur substantial debt, expose us to
contingent liabilities and could negatively impact our profitability.
38. The Equity Shares will be partially paid after the Allotment Date at the option of the Company.
The Equity Shares are being issued on a partly paid basis. The Issuer Price will be paid in three installments: Rs. 6
will be payable on application, Rs. 8 will become payable, at the option of the Company, after 3 months but within
xxv
9 months from the date of Allotment and the balance Rs. 8 will become payable, at the option of the Company,
after 9 months but within 18 months from the date of Allotment (the “Additional Payment”).
The price movements of partly paid shares may be greater in percentage terms than price movements if the Equity
Shares were fully paid. Investors in the Issue will be required to pay the Additional Payment when due, even if, at
that time, the market price of the Equity Shares is less than the Issue Price. If the holder fails to pay the Additional
Payment with any interest that may have accrued thereon after notice has been delivered by the Company, then any
partly paid-up Equity Shares in respect of which such notice has been given may, at any time thereafter before
payment of the Additional Payment and interest and expenses due in respect thereof, be forfeited by resolution of
the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and
actually paid before the forfeiture.
Notwithstanding such forfeiture, a person whose partly paid-up Equity Shares have been forfeited shall remain
liable to pay to the Company the Additional Payment and interest and expenses owing upon or in respect of such
partly paid-up Equity Shares at the date of forfeiture with interest thereon from the date of forfeiture until payment
at such rate not exceeding nine percent per annum as the Directors may determine. For more information, see
“Terms of the Issue” on page 340 and “Main Provisions of the Articles of Association” on page 361.
39. Partly paid-up Equity Shares will not be traded from the issue of the Call Money Notice. Further, if
investors do not pay the amount payable on calls, trading in those paid-up Equity Shares will be discontinued
and such Equity Shares will be liable for forfeiture by the Company.
The Company will fix a record date to determine the list of shareholders to whom the Call Money Notice would be
sent for each call. As per the present regulatory framework, trading of our partly paid Equity Shares is expected to
be suspended, starting five days prior to such record date for the call concerned. The process of corporate action for
credit of fully paid shares to the demat account of the shareholder may take about two weeks from the date of
payment of the amount payable on call. During this period shareholders who pay the amount payable on call for the
partly paid Equity Shares will not be able to trade in those shares. For more details see “Procedure For Calls” on
page 341.
Further, if the amount due on calls in not paid, these Equity Shares will be liable for forfeiture by the Company in
accordance with its Articles of Association. Since trading of the partly paid-up Equity Shares would be suspended
five days prior to the record date for the concerned call, the partly paid-up Equity Shares would cease to trade from
such date and there would be no market for the same. For more details see “Procedure For Calls” on page 341 and
“Main Provisions of the Articles of Association” on page 361.
40. Our operations are concentrated in a single facility in Noida, and we are vulnerable to natural disasters or
other events that could disrupt those operations.
Substantial parts of our operations are located in one facility in Noida. We are therefore vulnerable to the effects of
a natural disaster, such as an earthquake, flood or fire, or other calamity or event that disrupts our ability to conduct
our business or that causes material damage to our property at this location. Although we have backup facilities for
many aspects of our operations, we would have to contract with third parties for broadcasting capabilities and it
could be difficult for us to maintain or resume quickly our operations in the event of a significant disaster at this
facility.
41. Technological failures could adversely affect our business.
We rely on sophisticated production and broadcast equipment, communications equipment and other information
technology to conduct our business. Although we have backup equipment in some cases, if we were to experience
significant damage to certain equipment or other technological breakdowns to equipment or systems, it could
disrupt our ability to produce or broadcast our programming, our internal decision-making or other critical aspects
of our business.
Further, all of our broadcasting is done by uplink to a single satellite. If this satellite were to cease to be available to
us for any reason, we would have to secure access to an alternative satellite, and we cannot assure you that such
access would be available on equally favourable terms or at all or the time frame within which such access would
be available. Though we do maintain insurance for our assets except CPEs, any equipment or technological failure
or damage that results in a disruption of our services could lead to loss of revenues.
42. Exchange rate fluctuations may affect our results of operations and financial condition.
xxvi
The exchange rate between the Rupee and the U.S. Dollar has changed substantially in recent years and may
continue to fluctuate significantly in the future. We import a large portion of our consumer premise equipments
thus, factors associated with international operations, including changes in foreign currency exchange rates, could
significantly affect our results of operations and financial condition. We expect that a majority of our consumer
premise equipments will continue to be bought in foreign currencies and that a significant portion of our income
will continue to be denominated in Indian Rupees. Accordingly, our operating results have been and will continue
to be impacted by fluctuations in the exchange rate between the Indian Rupee and the U.S. Dollar and other foreign
currencies. Any adverse fluctuations in the exchange rate would adversely affect our financial condition and results
of operations.
43. We have applied for delisting of our Equity Shares from the CSE.
Our Company has made an application dated September 22, 2008 to the CSE for voluntary de-listing of our Equity
Shares from the CSE pursuant to the resolution of our shareholders at the AGM dated August 28, 2008. Although
we have received the in-principle approval for listing of Equity Shares arising from the Issue on the CSE, in the
event we receive approval for de-listing of our Equity Shares from the CSE, trading of our Equity Shares would be
discontinued from the CSE.
External Risk Factors
44. A slowdown in economic growth in India could cause our business to suffer.
Our performance and growth are dependent on the health of the Indian economy. The economy could be adversely
affected by various factors such as political or regulatory action, including adverse changes in liberalization
policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates,
commodity and energy prices and various other factors. Any significant change may adversely affect our business
and financials.
45. A significant change in the government of India’s economic liberalization and deregulation policies could
disrupt our business and cause the price of our Equity Shares to decline.
Our assets and customers are predominantly located in India. The government of India has traditionally exercised
and continues to exercise a dominant influence over many aspects of the economy. Its economic policies have had
and could continue to have a significant effect on private sector entities, including us, and on market conditions and
prices of Indian securities, including the Equity Shares. The present government, which was formed after the Indian
parliamentary elections in April-May 2004, is headed by the Indian National Congress and is a coalition of several
political parties. Any significant change in the Government’s policies or any political instability in India could
adversely affect business and economic conditions in India and could also adversely affect our business, our future
financial performance and consequently the market price of our Equity Shares.
46. There is no guarantee that the partly paid-up Equity Shares will be listed on the BSE, NSE and CSE in a
timely manner or at all.
In accordance with Indian Law and practice, permission for listing of the partly-paid up Equity Shares will not be
granted until after those partly paid-up Equity Shares have been issued and allotted. Approval will require all other
relevant documents authorizing the issuing of partly-paid up Equity Shares to be submitted. In addition, there
would be a suspension in trading for few days before the partly paid-up Equity Shares are made fully paid-up,
during which period you may not be able to sell your partly-paid up Equity Shares. There could be a failure or
delay in listing of the Equity Shares on the Stock Exchanges. Any failure in obtaining the approval would restrict
your ability to dispose of your Equity Shares.
47. Future issues or significant transactions of our Equity Shares may affect the trading price of our Equity
Shares.
The future issue of Equity Shares by us or the disposal of Equity Shares by any of our major shareholders or the
perception that such issuance or sales may occur may significantly affect the trading price of the Equity Shares.
Subject to these restrictions, no assurance may be given that we will not issue Equity Shares or that such
shareholders will not dispose of or transfer the Equity Shares or interests thereof, in the future, which could impact
the trading price of our Equity Shares.
xxvii
48. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could
adversely affect the financial markets and our business.
Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which our Equity
Shares trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of
business confidence, make travel and other services more difficult and ultimately adversely affect our business.
49. Natural calamities could have a negative impact on the Indian economy and cause our business to suffer.
India has experienced natural calamities such as earthquakes, tsunami, floods and droughts in the past few years.
The extent and severity of these natural disasters determines their impact on the Indian economy. Prolonged spells
of below normal rainfall or other natural calamities could have a negative impact on the Indian economy, adversely
affecting our business and the price of our Equity Shares.
50. Any downgrading of India’s debt rating by an independent agency may harm our ability to raise debt
financing.
Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies
may adversely affect our ability to raise additional financing and the interest rates and other commercial terms at
which such additional financing is available. This could have a material adverse effect on our capital expenditure
plans, business and financial performance.
51. You may be subject to Indian taxes arising out of capital gains.
Under current Indian tax laws and regulations, capital gains arising from the sale of shares in an Indian company
are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for
more than 12 months will not be subject to capital gains tax in India if the Securities Transaction Tax (“STT”) has
been paid on the transaction. The STT will be levied on and collected by a domestic stock exchange on which
equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months to an Indian
resident, which are sold other than on a recognised stock exchange and as result of which no STT has been paid,
will be subject to capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a
period of 12 months or less will be subject to capital gains tax in India. For more information, see “Statement of
Tax Benefits” on page 32.
Capital gains arising from the sale of our Equity Shares will be exempt from tax in India in cases where such
exemption is provided under the tax treaty between India and the country of which the seller is a resident.
Generally, Indian tax treaties, including those with the United States, do not limit India’s ability to impose tax on
capital gains. As a result, residents of countries such as the United States may be liable for tax in India, as well as
in their own jurisdictions on gain upon a sale of our Equity Shares. For more information, see the section titled
“Statement of Tax Benefits” on page 32 in this Letter of Offer.
Notes to risk factors:
1.
Net worth of the Company on a consolidated basis as on June 30, 2008 and as on March 31, 2008 are Rs.
(61,107.57) lakhs and Rs. (47,861.71) lakhs, respectively. The net asset value per Equity Share on a
consolidated basis as on June 30, 2008 and as on March 31, 2008 are Rs. (14.27) per Equity Share and Rs.
(11.18) per Equity Share, respectively.
2.
Issue of 51,81,49,592 Equity Shares of the Company for cash at aprice of Rs. 22 per Equity Share
including a premium of Rs. 21 per Equity Share aggregating upto Rs. 1,13,992.91 lakhs to the Equity
Shareholders of the Company on rights basis in the ratio of 121 Equity Shares for every 100 Equity Shares
held on the Record Date i.e. October 16, 2008 in terms of the Letter of Offer. The total Issue Price is 22
times of the face value of the Equity Share. The Issue Price for the Equity Shares will be paid in three
installments: Rs. 6 will be payable on application, Rs. 8 will become payable, at the option of the
Company, after 3 months but within 9 months from the date of Allotment and the balance Rs. 8 will
become payable, at the option of the Company, after 9 months but within 18 months from the date of
Allotment.
xxviii
3.
Before making an investment decision in respect of this Issue, you are advised to refer to ‘Basis for Issue
Price’ on page 30.
4.
Please refer to ‘Basis of Allotment’ on page 352 for details on basis of allotment.
5.
Average cost of acquisition of Equity Shares by our Promoters as on and of September 30, 2008 is as
follows:
Promoter
Mr. Subhash Chandra
Mr. Laxmi Narain Goel
Mr. Ashok Goel
Mr. Ashok Mathai Kurien
Ms. Sushila Goel
Veena Investment Private Limited
Delgrada Limited
Churu Trading Company Private Limited
Premier Finance & Trading Company Limited
Essel Infraprojects Limited (formerly, Pan India Paryatan
Average cost of acquisition per Equity
Share (In Rs.)
4.00
0.001
3.99
0.00
1.27
3.99
0.00
108.16
0.00
0.64
2.50
2.33
1.01
0.00
1.98
0.00
Limited)
0.00
6.
For details of transactions in Equity Shares by our Promoters, Promoter Group and Directors in the last six
months, see “Capital Structure” on page 14.
7.
For details of interests of our Directors and key managerial personnel, see “Management - Interest of
Promoters, Directors and Key Managerial Personnel” on page 72. For details of interests of our Promoters
and Promoter Group, see “Promoters - Interests of Promoters in the Company” on page 84.
8.
You may contact the Compliance Officer or the Lead Manager for any complaints pertaining to the Issue
including any clarification or information relating to the Issue. Lead Manager is obliged to provide the
same to you. The contact details of the Compliance Officer are detailed below:
Mr. Jagdish Patra
Dish TV India Limited
FC-19, Sector 16A,
Noida 201 301,
Uttar Pradesh, India.
Tel: +91 120 2599 391
Fax: +91 120 4357 078
Email: rightsissue@dishtv.in
9.
The name of our Company was changed from ASC Enterprises Limited to Dish TV India Limited on
March 7, 2007. The name of our Company was changed to make the name of our Company synonymous
with the brand name of our product ‘Dish TV’ as registered with the Registrar of Trademarks,
10.
The standalone cumulative value of related party transactions for the year ending March 31, 2008 is Rs.
174,261.95 lakhs and for three months ending June 30, 2008 is Rs. 37,762.64 lakhs. The consolidated
cumulative value of related party transactions for the year ending March 31, 2008 is Rs. 156,554.22 lakhs
and for three months ending June 30, 2008 is Rs. 36,972.61 lakhs.
11.
We had entered into certain related party transactions, which includes the details of all the loans and
advances made to any persons or companies in whom our Directors are interested as discussed below
(consolidated):
xxix
.
Name of Subsidiary
List of parties where control exists.
Extent of Holding (In Percentage) as at
30 June '08
31 Mar '08
31 Mar '07
31 Mar '06
31 Mar '05
(Holding reduced to 51% on
51.00
51.00
51.00
51.00
100.00
March 31, 2006)
100.00
100.00
100.00
100.00
100.00
Agrani Satellite Services Limited
Agrani Wireless Services
98.80
Limited*@
Agrani Satellite Communication
100.00
Enterprises (Gibraltor) Limited *
Integrated Subscribers
Management Services Ltd
100.00
100.00
100.00
(Formerly known as Agrani
Telecom Limited)#
50.96
Quick Call Private Limited*
50.96
Smart Talk Private Limited*
Bhilwara Telenet Services Private
50.96
Limited*
99.37
Procall Private Limited*
Agrani Telecom Limited.
(Formerly known as Essel Telecom
98.01
Holding Limited)*
* Ceased to be subsidiary on 31st March '2006.
# Ceased to be subsidiary on 28 August '2003 and again became subsidiary on 1 April '2006 on transfer of
investment to the
parent company under the Scheme of Arrangement.
@ Holding reduced to 52.294% on April 13, 2005
Other Related Parties
Period ended 30th
June, 2008
Afro-Asian
Satellite
Communication
(Gibraltar) Limited,
Afro-Asian
Satellite
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today
Limited, Ayepee
Lamitubes Limited,
Agrani Satellite
Communication
(Gibraltar.)
Limited,
Agrani Telecom
Limited, Brio
Academic,
Churu Trading
Company Private
Limited,
Diligent Media
Year ended
31st March, 2008
Smart Talk Private
Limited
Essel Corporate
Services Private
Limited,
Essel Agro Private
Limited,
Cyquator
Technologies
Limited (Now
merged with PAN
India Network
Infravest Limited)
Zee Entertainment
Enterprises Limited,
Pan India Network
Infravest Private
Limited,
Pan India Paryatan
Limited
Ayepee Lamitubes
Limited,
Procall Private
Limited,
Suncity Projects
Year ended
31st March, 2007
Smart Talk Private
Limited
Essel Corporate
Services Private
Limited
Essel Agro Private
Ltd
Cyquator
Technologies Limited
Zee Entertainment
Enterprises Limited
Pan India Network
Infravest Private
Limited
Pan India Paryatan
Limited
Ayepee Lamitubes
Limited
Procall Private
Limited
Suncity Projects
Limited
Afro-Asian Satellite
Communication
(Gibraltar) Limited
xxx
Year ended
31st March, 2006
Smart Talk Private
Limited*
Essel Corporate
Services Private
Limited
Essel Agro Private
Ltd
Cyquator
Zee Telefilms Ltd
(Now known as Zee
Entertainment
Enterprises Limited)
Pan India Network
Infravest Private
Limited,
Ayepee Lamitubes
Limited
Procall Private
Limited*
Suncity Projects
Private Limited
Communication
(Gibraltar) Limited
Year ended
31st March, 2005
Essel Corporate
Services Private
Limited
Essel Agro Private
Ltd
Cyquator
Technologies
Private Limited
Zee Telefilms Ltd
(Now known as
Zee Entertainment
Enterprises
Limited)
Pan India Network
Infravest Private
Limited
Ayepee Lamitubes
Limited
Suncity Projects
Private Limited,
Afro-Asian
Satellite
Communication
(Gibraltar) Limited
Afro-Asian
th
Period ended 30
June, 2008
Corporation
Limited,
Dakshin Media
Gamming
Solutions Private
Limited, Essel
Corporate
Resources Private
Limited,
Essel Agro Private
Limited,
E-City
Entertainment (I)
Private Limited,
ETC Networks
Limited, Essel
Shyam Technology
Limited,
Essel Sports Private
Limited,
Ganjam Trading
Co. Private
Limited,
ITZ Cash Card
Limited, Indian
Cable Network
Company Limited,
Intrex India
Limited,
Intrex Tradex
Private Limited,
Pan India Network
Infravest Private
Limited, PAN India
Network
Investment
Privated, Quick
Call Private
Limited, Procall
Private Limited,
Rama Associates
Limited, Rupee
Finance and
Management
Private Limited,
Smart Talk Private
Limited, Suncity
Projects Private
Limited,
Wire and Wireless
India Limited,
Zee Turner
Limited,
Zee News Limited,
Zee Aakash News
Private Limited,
Zee Entertainment
Enterprises
Year ended
31st March, 2008
Limited,
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited,
Zee News Limited,
Ganjam Trading Co.
Private Limited,
Rupee Finance &
Management Private
Limited,
ITZ Cash Card
Limited,
Wire and Wireless
India Limited,
Dakshin Media
Gamming Solutions
Private Limited,
Rama Associates
Limited,
Zee Turner Limited,
Zee Interactive
Learning Systems
Limited (Now known
as ETC Networks
Limited)
Kenlott Gamming
Solutions Private
Limited
Brio Academic
Zee Foundation
Zee Akash News
Private Limited
E City Entertainment
(I) Private Limited
Zee Sports Limited
Bhilwara Telenet
Services Private
Limited
Quick Call Private
Limited
ETC Networks
Limited
Diligent Media
Corporation Limited
Indian Cable Net
Company Limited,
PAN India Network
Infravest Limited,
Zee Multi-Media
Worldwide Mauritus
Year ended
31st March, 2007
Communication
(U.K.) Limited
ASC
Telecommunication
Limited
Asia Today Limited
Asia TV Limited
Zee News Limited
Ganjam Trading Co.
Private Ltd
Rupee Finance &
Management Private
Limited
ITZ Cash Card
Limited
Wire and Wireless
India Limited
Dakshin Media
Gamming Solutions
Private Limited
Rama Associates
Limited
Zee Turner Limited
Zee Interactive
Learning Systems
Limited
Kenlott Gamming
Solutions Private
Limited
Brio Academic
Zee Foundation
Zee Akash News
Private Limited
(I) Private Limited
Zee Sports Limited
Bhilwara Telenet
Services Private
Limited
Quick Call Private
Limited
ETC Networks
Limited
Diligent Media
Corporation Limited
Indian Cable Net
Company Limited
Mr Jawahar Lal Goel
xxxi
Year ended
31st March, 2006
Communication
(U.K.) Limited
ASC
Telecommunication
Limited
Asia Today Limited
Asia TV Limited
Ganjam Trading Co
Private Ltd
Intrex India Limited
Zee Turner Limited
Bhilwara Telenet
Services Private
Limited*
Quick Call Private
Limited*
Essel Telecom
Holding Limited*
Siti Cable Network
Limited
New Era
Entertainment
Network Limited
Integrated
Subscribers
Management
Services Limited
Jay Properties Private
Limited
Prajatma Trading
Company Private
Limited
Veena Investment
Private Limited
Kenllot Gaming
Solution Private
Limited
Intrective Tredex
Private Limited
Agrani Wireless
Services Ltd.*
* Ceased to be
subsidiary on March
31st, 2006
Year ended
31st March, 2005
Satellite
Communication
(U.K.) Limited
ASC
Telecommunication
Limited
Asia Today
Limited
Asia TV Limited
Ganjam Trading
Co. Private Ltd
Intrex India
Limited
Zee Turner Limited
Siti Cable Network
Limited
New Era
Entertainment
Network Limited
Integrated
Subscribers
Management
Services Limited
Jay Properties
Private Limited
Prajatma Trading
Company Private
Limited
Veena Investment
Private Limited
Jawahar Goel,
Intrective Tredex
Private Limited
Kavita Goel
Zee Interactive
Learning System
Limited
ASC (UK) Limited
ASC (Mauritius)
th
Period ended 30
June, 2008
Limited,
Zee Multi-Media
Worldwide
Mauritus Limited,
Year ended
31st March, 2008
Limited,
Intrex Tradex Private
Limited,
Agrani Satellite
Communication
(Gib) Limited,
Essel Shyam
Communication
Limited,
Essel Shyam
Technologies
Limited,
Churu Trading
Company Private
Limited,
Agrani Telecom
Limited,
Year ended
31st March, 2007
Year ended
31st March, 2006
Year ended
31st March, 2005
Director/Key Managerial Personnel
Mr.
Subhash
Chandra
Mr. Jawahar Lal
Goel
Mr. Ashok Kurien
Mr. B.D.Narang
Mr. Arun Duggal
Mr. Pritam Singh
Mr.
Eric
Zinterhofer
Mr.
Subhash
Chandra
Mr. Jawahar Lal
Goel
Mr. Ashok Kurien
Mr. B.D.Naran,
Mr. Arun Duggal
Mr. Pritam Singh*
Mr. Eric Zinterhofer$
* w.e.f April 27 ,
2007
$ w.e.f October 22,
2007
Mr. Subhash Chandra
Mr. Jawahar Lal
Goel#
Mr. Ashok Kurien#
Mr. B.D.Naran,#
Mr. Arun Duggal#
Mr. Laxmi Narayan
Goel*
Mr. Punit Goenka*
Mr. Rajagopalan
Chandrashekhar*
Mr. Ashok Goel*
* Upto January 6,
2007
# w.e.f. January 6,
2007
xxxii
Mr. Subhash Chandra
Mr. Laxmi Narain
Goel
Mr. Ashok Goel
Mr. Puneet Goenka
Mr. Rajagopalan
Chandrashekhar
Mr.
Subhash
Chandra
Mr. Laxmi Narain
Goel
Mr. Ashok Goel
Mr. Puneet Goenka
Mr. Rajagopalan
Chandrashekhar
Particular
With Other Related Parties:
Sales, Services & Recoveries (Net
of Taxes)
Zee Entertainment Enterprises
Limited
Zee News Limited
Asia Today Limited
Asia TV Limited
Zee Turner Limited
Essel Agro Private Limited
New Era Entertainment Network
Limited
Others
Purchase of Goods & Services
Zee Turner Limited
Limited
ITZ Cash Card Limited
New Era Entertainment network Ltd.
Integrated Subscribers Management
Services Limited
Others
Rent Paid
Limited
E-City Entertainment (I) Private
Limited
Rama Associates Limited
Interest Paid
Limited
Rupee Finance & Management
Private Ltd.
Churu Trading Company Private
Limited
Others
Donation
Zee Foundation
Interest Received
ASC Telecommunication Limited
Ganjam Trading Company Private
Limited
Wire & Wireless India Limited
Purchase of Fixed Assets
Limited
Others
Sale of Fixed Assets
Agrani Telecom Limited
Siti Cable Network Limited
Sale of Investment
3 Months
Period ended
30 June 2008
(Rs. In lacs)
Year ended
Year ended
March 31,
March 31,
2006
2005
Year ended
March 31,
2008
Year ended
March 31,
2007
333.50
1,261.10
4726.63
1,200.13
644.63
67.35
213.55
1,783.22
85.94
83.23
84.59
121.66
-
300.85
419.57
6.37
-
711.45
348.97
248.05
745.21
-
46.45
177.53
172.25
591.44
27.42
19.01
67.51
-
-
-
87.50
415.19
59.90
3,637.33
2,196.53
320.76
10,025.83
5,549.87
889.73
9,877.73
8,025.22
39.02
5,163.27
26.24
32.27
89.54
-
423.51
1,295.82
674.52
360.80
46.05
833.54
-
1,041.70
1,426.63
-
255.66
710.25
-
54.90
7.81
3,714.87
32.63
-
-
-
-
937.23
0.20
183.75
193.28
711.81
140.99
212.08
55.72
61.42
8.64
10.66
-
186.90
106.29
43.34
8.64
-
-
11.51
12.38
-
-
6.38
1,256.52
23.19
2,425.55
520.12
67.41
-
233.58
1,974.81
496.25
67.41
-
21.36
401.43
9.51
-
-
976.92
40.66
-
-
-
24.66
178.65
152.55
26.10
8.65
592.90
502.18
86.45
14.36
25.00
25.00
528.19
460.18
68.01
3.81
3.81
-
248.55
-
-
-
-
-
248.55
-
4.27
388.73
388.73
7,289.34
29.61
6,943.18
-
640.13
-
-
-
7,256.46
6,930.34
639.96
-
-
3.27
5.96
5.96
-
12.84
12.16
12.16
2,022.17
0.17
-
xxxiii
Particular
Loan, Advance and Deposit Taken
(Including advance against share
application money)
Limited
Limited
Private Ltd.
New Era Entertainment Network Ltd.
Ganjam Trading Co. Private Limited
Zee News Limited
Services Limited
Others
Repayment of Loan, Advance and
Deposit Taken
Private Ltd.
Kenlott Gaming Solutions Private
Limited
Limited
Limited
Zee News Limited
Limited
Zee Interactive Learning Systems
Limited
Others
Loan, Advance and Deposit Given
ITZ Cash Card Limited.
Limited
Pan India Network Infravest Private
Limited
Others
Refund Received against Loan,
Advance and Deposit Given
Ganjam Trading Co. Private Ltd.
Jay Properties Private Ltd.
Limited
3 Months
Period ended
30 June 2008
-
Year ended
March 31,
2008
-
Year ended
March 31,
2007
-
Year ended
March 31,
2006
2,022.17
Year ended
March 31,
2005
-
7,836.36
78,790.90
6,421.28
10,141.85
2,690.26
6.31
31,770.00
3,263.25
31.11
-
3,200.00
30,000.00
-
-
-
130.00
217.50
1,053.00
-
-
2,500.00
16,800.00
2,100.00
-
-
2,000.00
-
-
6,900.00
830.00
1,787.83
-
2,541.21
-
-
-
500.00
-
0.05
3.40
5.03
92.91
149.05
5,017.61
46,320.15
2,922.49
81.00
518.02
-
-
250.00
1,053.00
-
-
2,200.00
17,300.00
1,600.00
-
-
-
-
-
21.00
-
-
-
-
-
433.27
810.00
-
-
-
2,000.00
-
-
-
-
6.31
29,000.00
-
-
-
-
-
-
-
73.00
1.30
4,456.12
1,934.51
32.00
5.20
-
20.15
273.81
267.07
6.74
19.49
4,236.41
3,136.46
941.00
-
60.00
13,896.42
11,986.06
584.59
36.25
11.75
9,381.88
-
-
-
-
355.00
2,070.00
-
-
-
700.00
-
2,055.00
5,184.08
2,483.91
-
-
-
-
0.50
-
158.95
234.52
72.80
-
40.96
2,508.78
13,017.44
6,406.89
-
15.00
18.00
-
155.11
2,312.82
-
293.86
982.42
5,073.23
4,201.66
1,839.00
-
-
-
3,430.75
355.00
xxxiv
Particular
Others
Amount Written Off
Zee Turner Limited
Corporate Guarantee Given
Procall Private Limited
Quick Call Private Limited
Smart Talk Private Limited
Bhilwara Telenet Services Limited
Corporate Guarantee received
Limited
Release of Corporate Guarantee
received
Limited
Provision for Doubtful Advances
Brio Academic
Others
Assets & Liabilities Received
Pursuant to Scheme of
Arrangement
DCS undertaking of Zee
Entertainment Enterprises Limited
Total Assets
Total Liabilities
Total Assets
Total Liabilities
Limited
Total Assets
Total Liabilities
Assets & Liabilities Received
pursuant to Slump Sale
Total Assets
Total Liabilities
Purchase Consideration
Key Management Personnel
Remuneration to Managing
Director
Jawahar Lal Goel
Salary & Allowances
Jawahar Lal Goel
Balance at the end of period:
Loan, Deposit and Advances Given
Afro-Asian Satellite Comm. (UK)
Limited
Afro-Asian Satellite Comm. (Gib.)
Limited
Agrani Satellite Comm. (Gib.)
Limited
3 Months
Period ended
30 June 2008
8000.00
Year ended
March 31,
2008
7.96
4.56
4.56
6,227.00
Year ended
March 31,
2007
40.85
240.00
200.00
15.00
15.00
10.00
22,240.31
Year ended
March 31,
2006
2,755.00
482.18
-
Year ended
March 31,
2005
11.23
-
8000.00
6,227.00
22,240.31
-
-
6,047.81
10,000.00
22,240.31
-
-
6,047.81
10,000.00
22,240.31
-
-
-
-
80.31
79.50
0.81
-
-
-
-
13,856.07
-
-
-
-
17,119.52
3,263.45
(4,245.84)
10,118.49
14,364.33
-
-
-
-
98.20
-
-
-
-
11,414.15
11,315.95
-
-
-
-
(4511.78)
15,249.00
19,755.78
5.00
-
-
15.43
61.74
12.94
-
-
15.43
-
61.74
-
12.94
10.15
10.15
-
-
27,582.88
25,405.06
23,991.35
22,029.49
23,457.77
3,768.82
3,768.82
3,768.82
3,768.82
3,768.82
8,277.08
8,277.08
8,277.08
8,277.08
8,277.08
38.41
38.41
38.41
38.41
-
1,688.08
9,679.14
587.21
11,091.60
1,331.28
8,996.56
9,233.33
-
xxxv
Particular
Jay Properties (P) Ltd.
Limited
Pan India Network Infravest Private
Limited
Others
Provision outstanding against
advances given
Afro-Asian Satellite Comm. (UK)
Limited
Afro-Asian Satellite Comm. (Gib.)
Limited
Others
Loan, Deposit and Advances
Taken (Including advance share
application money)
Suncity Project Limited
Limited
Kenlott Gaming Solutions Private
Limited
Ayepee Lamitube Limited
Limited
Private Limited
Play Win Infrawest Private Limited
Others
Creditors for expenses and other
liabilities
Limited
Services Limited
Zee Turner Limited
ASC (UK) Limited
ASC (Martitus)
Others
Debtors
Asia Today Limited
Asia TV Limited
Zee News Limited
Limited
Interactive Traders India Limited
Others
3 Months
Period ended
30 June 2008
1,512.01
-
Year ended
March 31,
2008
1,506.81
-
Year ended
March 31,
2007
1,439.82
-
Year ended
March 31,
2006
585.93
-
Year ended
March 31,
2005
5,073.23
2,055.00
-
-
-
-
3,075.75
2,483.91
-
-
-
-
135.43
135.13
139.38
125.92
1,207.89
12,164.61
12,164.61
12,164.61
12,084.31
12,084.31
3,768.82
3,768.82
3,768.82
3,768.82
3,768.82
8,277.08
8,277.08
8,277.08
8,277.08
8,277.08
118.71
118.71
118.71
38.41
38.41
40,695.22
36,981.31
2,454.08
1,844.83
6,055.70
27.00
27.00
27.00
27.00
27.00
33,398.37
30,040.65
-
-
-
-
-
19.00
19.00
-
10.78
10.78
10.78
10.78
10.78
4,205.14
4,323.83
-
-
139.45
347.50
217.50
38.06
-
-
725.03
403.67
506.37
-
-
1,787.83
193.57
1,787.83
170.05
1,787.83
65.04
1,787.83
0.22
4,364.78
1,370.00
143.69
23,556.85
21,224.96
15,876.05
8,661.74
2,857.24
8,718.43
8,629.81
7,399.69
4,616.88
452.66
-
-
-
2,670.53
-
-
-
-
1,164.44
-
13,912.60
925.82
3,848.38
354.89
438.51
11,826.20
768.95
3,865.42
386.37
343.46
8,006.33
470.03
3,757.00
237.72
164.73
468.82
35.69
174.20
702.50
178.58
172.25
-
34.49
1,868.41
496.57
5.12
199.48
27.42
-
2,006.34
1,931.05
1,933.22
0.53
0.89
1,048.64
-
1,204.54
-
952.51
240.00
153.33
85.54
101.37
10.90
40.00
61.84
2.22
101.37
5.74
500.00
xxxvi
3 Months
Period ended
30 June 2008
Particular
Bhilwara Talenet Services Limited
Corporate Guarantee Received
Limited
Note:
20,527.00
Year ended
March 31,
2008
18,467.31
Year ended
March 31,
2007
200.00
15.00
15.00
10.00
22,240.31
Year ended
March 31,
2006
15.00
15.00
10.00
4,000.00
Year ended
March 31,
2005
500.00
4,000.00
20,527.00
18,467.31
22,240.31
4,000.00
4,000.00
1 The related party transaction disclosed are as per the requirement of Accounting standard ‘18’.
2 Accounting Standard 'AS-18' became applicable to the Company for the financial year ended March
31, 2005 hence above statement is for the financial year ended March 31, 2005 and onwards.
3 Entities who account for less then 10% of the aggregate for that category of transaction are grouped
under ‘others’.
4 The above Statement should be read with the Significant Accounting Policies and selected notes to
accounts Restated Summary Statement as appearing in Annexure D of the Auditors Report disclosed
in this Letter of Offer.
Standalone Restated Summary Statement of Related Party Transactions
List of Related Parties
Name of Subsidiary
List of Parties where control exists.
30 June '08 31 Mar '08
31 Mar '07
31 Mar '06
(Holding reduced to 51% on
March 31, 2006)
51.00
51.00
51.00
51.00
100.00
100.00
100.00
100.00
Limited*@
Enterprises (Gibraltor) Limited *
(Formerly known as Agrani
Telecom Limited)#
100.00
100.00
100.00
Bhilwara Telenet Services Private
Limited*
Agrani Telecom Limited.
(Formerly known as Essel Telecom
Holding Limited)*
# Ceased to be subsidiary on 28 August '2003 and again became subsidiary on 1 April '2006 on
transfer of investment to the parent Company under the Scheme of Arrangement.
Period ended
30th June, 2008
Year ended
31st March, 2008
Year ended
Year ended
31st March, 2007
31st March, 2006
xxxvii
31 Mar '05
100.00
100.00
98.80
100.00
50.96
50.96
50.96
99.37
98.01
Year ended
31st March, 2005
Period ended
30th June, 2008
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Ayepee Lamitubes
Limited, Agrani
Satellite
Communication
Brio Academic,
Churu Trading
Company Private
Limited,
Diligent Media
Corporation Limited,
Dakshin Media
Gamming Solutions
Private Limited, Essel
Corporate Resources
Private Limited,
Essel Agro Private
Ltd,
E-City Entertainment
(I) Private Limited,
ETC Networks
Limited,
Essel Shyam
Technology Limited,
Limited, ITZ Cash
Card Limited,
Indian Cable Network
Company Limited,
Limited,
Pan India Network
Infravest Private
Limited,
Rama Associates
Limited,
Rupee Finance and
Management Private
Limited, Suncity
Projects Private
Limited,
Wire and Wireless
India Limited,
Zee Turner Limited,
Zee News Limited,
Zee Aakash News
Private Limited,
Zee Entertainment
Enterprises Limited
Year ended
31st March, 2008
Smart Talk Private
Limited,
Essel Corporate
Services Private
Limited,
Essel Agro Private
Ltd ,
Cyquator
(merged with Pan
India Network
Infravest Private
Limited),
Zee Entertainment
Pan India Network
Infravest Private
Limited,
Pan India Paryatan
Limited, Ayepee
Lamitubes Limited,
Procall Private
Limited,
Suncity Projects
Private Limited,
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited
(UK),
Zee News Limited,
Rupee Finance and
Management Private
Limited,
ITZ Cash Card
Limited,
Wire and Wireless
India Limited,
Dakshin Media
Gamming Solutions
Private Limited,
Rama Associates
Limited,
Zee Turner Limited,
Zee Interactive
Learning Systems
Limited (now known
as ETC Networks
Limited),
Kenlott Gamming
Solutions Private
Limited,
Brio Academic,
Zee Foundation,
Zee Akash News
Private Limited,
Year ended
31st March, 2007
Smart Talk Private
Limited,
Essel Corporate
Services Private
Limited,
Essel Agro Private
Ltd,
Cyquator
Technologies
Limited,
Zee Entertainment
Pan India Network
Infravest Private
Limited,
Pan India Paryatan
Limited,
Ayepee Lamitubes
Limited,
Procall Private
Limited,
Suncity Projects
Private Limited,
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited,
Zee News Limited,
Ganjam Trading Co.
Private Ltd,
Rupee Finance &
Management Private
Limited,
ITZ Cash Card
Limited,
Wire and Wireless
India Limited,
Dakshin Media
Gamming Solutions
Private Limited,
Rama Associates
Limited,
Zee Turner Limited,
Zee Interactive
Learning Systems
Limited,
Kenlott Gamming
Solutions Private
Limited,
Brio Academic,
Zee Foundation,
Zee Akash News
Private Limited,
Zee Sports Limited,
Bhilwara Telenet
xxxviii
Year ended
31st March, 2006
Smart Talk Private
Limited,*
Essel Corporate
Services Private
Limited,
Essel Agro Private
Ltd , Cyquator
Technologies
Limited,
Zee Telefilms Ltd
(Now known as Zee
Entertainment
Pan India Network
Infravest Private
Limited,
Ayepee Lamitubes
Limited,
Procall Private
Limited,*
Suncity Projects
Private Limited,
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited,
Ganjam Trading
Co.Private Ltd,
Intrex India Limited,
Zee Turner Limited,
Bhilwara Telenet
Services Private
Limited,*
Quick Call Private
Limited,*
Essel Telecom
Holding Limited,*
Siti Cable Network
Limited,
New Era
Entertainment
Network Limited,
Integrated
Subscribers
Management Services
Limited,
Limited,
Kenllot Gaming
Solution Private
Limited,
Agrani Wireless
Services Ltd.*
Agrani Sattelite
Services Limited
(Gib.)
* Ceased to be
Year ended
31st March, 2005
Essel Corporate
Services Private
Limited,
Cyquator Technologies
Private Limited,
Zee Telefilms Ltd
(Now known as Zee
Entertainment
Pan India Network
Infravest Private
Limited,
Ayepee Lamitubes
Limited,
Suncity Projects
Private Limited,
Communication
Communication (U.K.)
Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Ganjam Trading Co.
Private Ltd,
Siti Cable Network
Limited,
New Era Entertainment
Network Limited,
Management Services
Limited,
Limited,
Jawahar Goel,
Kavita Goel.
Zee Interactive
Learning System
Limited
ASC (UK) Limited
ASC (Mauritus)
Period ended
30th June, 2008
Mr. Subhash Chandra
Mr. Jawahar Lal Goel
Mr. Ashok Kurien
Mr. B.D.Narang
Mr. Arun Duggal
Mr. Pritam Singh
Mr. Eric Zinterhofer
Year ended
31st March, 2008
Zee Sports Limited,
Bhilwara Telenet
Services Private
Limited,
Quick Call Private
Limited,
ETC Networks
Limited,
Diligent Media
Indian Cable Net
Company Limited,
Limited, Pan India
Network Infravest
Private Limited,
Agrani Telecom
Limited,
Agrani Satellite
Communication
(Gib.)Limited,
Essel Shyam
Communication
Limited,
Essel Shyam
Technology Limited,
Churu Trading
Company Private
Limited.
Year ended
31st March, 2007
Services Private
Limited,
Quick Call Private
Limited,
ETC Networks
Limited,
Diligent Media
Indian Cable Net
Company Limited,
Mr Jawahar Goel.
Year ended
31st March, 2006
subsidiary on March
31st, 2006
Mr. Subhash Chandra Mr. Subhash Chandra Mr. Subhash Chandra
Mr. Jawahar Lal Goel Mr. Jawahar Lal Mr. Laxmi Narain
Goel
Mr. Ashok Kurien
Goel#
Mr. B.D.Narang
Mr. Ashok Kurien#
Mr. Ashok Goel
Mr. Arun Duggal
Mr. B.D.Narang#
Mr. Puneet Goenka
Mr. Pritam Singh*
Mr. Arun Duggal#
Mr. Rajagopalan
Mr. Eric Zinterhofer$ Mr. Laxmi Narayan Chandrashekhar
Goel*
Mr. Punit Goenka*
Mr. Rajagopalan
Chandrashekhar*
Mr. Ashok Goel*
* w.e.f April 27 ,
2007
$ w.e.f October 22,
2007
* Upto January 6,
2007
# w.e.f. January 6,
2007
xxxix
Year ended
31st March, 2005
Mr. Subhash Chandra
Mr. Laxmi Narain
Goel
Mr. Ashok Goel
Mr. Puneet Goenka
Mr. Rajagopalan
Chandrashekhar
Particular
(i) With
Subsidiries
Companies
Purchase of
Goods &
ServicesIntegrated
Subscribers
Management
Services
Limited
Quick Call
Private
Limited
Smart Talk
Private
Limited
Others
Sales,
Services &
Recoveries
(Net of
Taxes)
Integrated
Subscribers
Management
Services
Limited
Agrani
Convergance
Limited
Purchase of
Fixed Assets
Agrani
Satellite
Services
Limited
Loan,Advanc
e and Deposit
Given
(including
Share
Application
Money)
Agrani
Satellite
Services
Limited
Agrani
Convergance
Limited
Agrani
Wireless
Service
Limited
Agrani
Telecom
Limited
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
2,006.22
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
5,698.03
(Rs. in Lacs)
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
2,747.33
-
8.06
2,006.22
5,698.03
2,747.33
-
-
-
-
-
-
5.06
-
-
-
-
2.50
-
-
-
-
0.50
0.92
233.10
-
0.92
233.10
-
-
-
-
-
466.61
-
-
-
-
-
-
-
482.54
-
-
3,021.83
482.54
23.82
-
66.36
-
23.82
1,688.55
-
260.30
466.61
3,021.83
66.36
288.31
158.09
-
-
-
608.33
102.11
-
-
-
428.75
-
-
-
-
274.31
-
xl
Particular
Others
Refund
Received
against
Loan,Advanc
e and Deposit
Given
Agrani
Satellite
Services
Limited
Agrani
Convergence
Limited
Agrani
Wireless
Service
Limited
Quick Call
Private
Limited
Others
Customer
Security
transferred
by
Integrated
Subscribers
Management
Services
Limited
Repayment
of Loan,
Advance and
Deposit
Agrani
Convergence
Limited
Diminution
in the value
of
Investment
Agrani
Convergence
Limited
(ii) With
Other
Related
Parties:
Sales,
Services &
Recoveries
(Net of
Taxes)
Zee
Entertainment
Enterprises
Limited
Zee News
Limited
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
-
810.00
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
-
30.00
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
88.85
-
2,069.14
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
0.10
56.28
810.00
30.00
-
356.17
32.31
-
-
-
715.05
7.94
-
-
-
699.30
16.00
-
-
-
298.62
-
-
-
-
-
0.03
-
8,806.78
-
-
-
8,806.78
3.25
-
-
-
-
326.03
-
3.25
-
-
-
1,247.05
1,228.52
-
-
-
-
-
-
4,675.99
-
-
1,247.05
-
-
-
-
1,188.72
-
490.53
67.35
213.55
1,783.22
83.55
53.11
84.59
300.85
711.45
46.45
-
xli
Particular
Asia Today
Limited
Asia TV
Limited
Zee Turner
Limited
Essel Agro
Private
Limited
New Era
Entertainment
Network
Limited
Others
Purchase of
Goods &
Services
Zee Turner
Limited
Zee
Entertainment
Enterprises
Limited
ITZ Cash
Card Limited
Essel Agro
Private
Limited
New Era
Entertainment
Network
Limited
Integrated
Subscribers
Management
Services
Limited
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
Rent Paid
Zee
Entertainment
Enterprises
Limited
E-City
Entertainment
(I) Private
Limited
Rama
Associates
Limited
Interest Paid
Zee
Entertainment
Enterprises
Limited
Rupee
Finance &
Management
Private Ltd.
1,256.52
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
419.57
348.97
177.53
27.42
-
-
248.05
172.25
-
-
-
738.40
-
-
-
-
-
591.44
-
-
-
-
87.50
410.00
52.43
294.55
845.9
30.00
-
10,003.68
9,877.73
5,140.04
56.71
2,196.53
5,547.87
8,025.22
26.24
-
423.01
1,273.67
674.52
360.80
46.05
833.54
1,041.70
255.66
32.29
-
-
1,426.63
710.25
7.81
-
-
-
-
3,714.87
-
-
-
-
937.23
0.20
183.75
193.28
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
121.66
3,636.83
Others
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
711.81
134.27
212.08
49.00
60.80
8.64
10.46
-
186.90
99.57
36.62
8.64
-
-
11.51
12.38
-
-
6.38
23.19
-
-
-
2,425.55
520.12
67.41
-
233.58
1,974.81
496.25
67.41
-
21.36
401.43
9.51
-
-
xlii
Particular
Churu
Trading
Company
Private
Limited
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
976.92
Others
Sale of
Investment
Essel Agro
Private
Limited
Loan,
Advance and
Deposit
Taken
(including
against share
apllication
money)
Essel Agro
Private
Limited
Zee
Entertainment
Enterprises
Limited
Wire &
Wireless
India Limited
Churu
Trading
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
40.66
24.66
Others
Donation
Zee
Foundation
Interest
Received
Essel Agro
Private
Limited
Ganjam
Trading
Company
Private
Limited
ASC
Telecmmunic
ation Limited
Wire &
Wireless
India Limited
Purchase of
Fixed Assets
Wire &
Wireless
India Limited
Zee
Entertainment
Enterprises
Limited
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
178.65
-
8.65
-
-
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
592.90
-
14.36
25.00
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
-
25.00
528.19
-
-
3.81
248.55
152.55
502.18
460.18
3.81
-
-
-
-
-
248.55
26.10
86.45
68.01
-
-
-
4.27
-
-
-
-
388.73
7,289.34
6,943.18
639.96
-
388.73
29.61
-
-
-
-
7,256.46
6,930.34
639.96
-
-
3.27
12.84
-
-
-
7,836.31
-
78,787.50
2,022.17
-
6,416.25
2,022.17
8,354.02
-
2,690.26
-
-
-
830.00
-
6.31
31,770.00
3,263.25
31.11
-
130.00
217.50
1,053.00
-
-
3,200.00
30,000.00
-
-
-
xliii
Particular
Company
Private
Limited
Rupee
Finance &
Management
Private Ltd.
New Era
Entertainment
Network
Limited
Zee News
Limited
Integrated
Subscribers
Management
Services
Limited
Others
Repayment
of Loan,
Advance and
Deposit
Taken
Essel Agro
Private
Limited
Zee
Entertainment
Enterprises
Limited
Wire &
Wireless
India Limited
Rupee
Finance &
Management
Private Ltd.
Kenlotte
Gaming
Solution
Private
Limited
New Era
Entertainment
Network
Limited
Churu
Trading
Company
Private
Limited
Zee News
Limited
Zee
Interactive
Learning
Systems
Limited
Others
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
2,500.00
16,800.00
2,100.00
-
-
-
-
-
6,900.00
2,541.21
2,000.00
-
-
-
-
-
-
-
500.00
-
-
-
-
92.91
149.05
46,319.00
5,016.31
2,903.00
21.00
518.02
-
-
250.00
-
-
6.31
29,000.00
-
-
-
-
-
1,053.00
-
-
2,200.00
17,300.00
1,600.00
-
-
-
-
-
21.00
-
-
-
-
-
433.27
810.00
-
-
-
-
2,000.00
-
-
-
-
-
-
-
73.00
19.00
-
-
11.75
xliv
Particular
Loan,Advanc
e and Deposit
Given
ITZ Cash
Card Limited
Essel Agro
Private
Limited
ASC
Telecommuni
cation
Limited
Ganjam
Trading
Company
Private
Limited
Others
Refund
Received
against
Loan,Advanc
e and Deposit
Given
ASC
Telecommuni
cation
Limited
Essel Agro
Private
Limited
Ganjam
Trading
Company
Private
Limited
Jay properties
Private
Limited
Others
Corporate
Guarantee
Given
Procall
Private
Limited
Quick Call
Private
Limited
Smart Talk
Private
Limited
Bhilwara
Telenet
Services
Limited
Corporate
Guarantee
received
Zee
Entertainment
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
1,971.71
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
267.07
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
4,173.37
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
9,248.90
5,251.84
1,934.51
267.07
-
-
-
32.00
-
3,136.46
8,434.62
-
5.20
-
941.00
584.59
-
-
-
-
-
5,184.08
-
-
95.91
229.69
67.76
-
33.00
2,473.93
6,802.00
6,044.58
-
15.00
155.11
293.86
-
-
18.00
2,312.82
-
-
-
-
-
982.42
4,201.66
-
-
-
5,073.23
1,839.00
-
-
6.00
452.49
3.92
-
-
240.00
-
-
-
-
200.00
-
-
-
-
15.00
-
-
-
-
15.00
-
-
-
-
10.00
-
-
8,000.00
6,227.00
8,000.00
22,240.31
6,227.00
xlv
22,240.31
-
-
Particular
Enterprises
Limited
Release of
Corporate
Guarantee
received
Zee
Entertainment
Enterprises
Limited
Provision for
Doubtful
Advances
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
6,047.81
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
10,000.00
6,047.81
-
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
-
10,000.00
-
-
-
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
80.31
-
-
-
-
-
Brio Acedmic
-
-
79.50
-
-
Others
Assets &
Liabilities
Received
Pursuant to
Scheme of
Arrangement
DCS
undertaking
of Zee
Entertainme
nt
Enterprises
Limited
-
-
0.81
-
-
Total Assets
Total
Liabilities
Siti Cable
Network
Limited
Total Assets
Total
Liabilities
New Era
Entertainmet
Network
Limited
Total Assets
Total
Liabilities
Assets &
Liabilities
Received
pursuant to
Slump Sale
Essel Agro
Private
Limited
Total Assets
Total
Liabilities
Purchase
Consideration
Key
Management
-
-
13,856.07
-
-
-
-
17,119.52
-
-
-
-
3,263.45
-
-
-
-
(4,245.84)
-
-
-
-
10,118.49
-
-
-
-
14,364.33
-
-
-
-
98.20
-
-
-
-
11,414.15
-
-
-
-
11,315.95
-
-
-
-
(4,511.78)
-
-
-
-
15,249.00
-
-
-
-
19,755.78
-
-
-
-
5.00
-
-
xlvi
Particular
Personnel
Remuneratio
n to
Managing
Director
Jawahar Lal
Goel
Salary &
Allowances
Jawahar Lal
Goel
Balance at
the end of
period:
With
Subsidiaries
Companies:
Investment
Agrani
Satellite
Services
Limited
Agrani
Convergence
Limited
Integrated
Subscribers
Management
Services
Limited
Others
Loan,
Deposit and
Advances
Given
Agrani
Satellite
Services
Limited
Integrated
Subscribers
Management
Services
Limited
Agrani
Convergence
Limited
Agrani
Wireless
Service
Limited
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
15.44
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
61.74
15.44
-
10.15
-
10,692.15
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
-
14.62
-
10,692.15
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
14.62
61.74
-
-
-
10.15
10,692.15
-
-
10,687.15
-
12,510.66
9,440.10
9,440.10
9,440.10
9,440.10
9,440.10
1,247.05
1,247.05
1,247.05
1,247.05
2,445.20
5.00
5.00
5.00
-
-
-
-
-
-
625.36
10,288.65
10,729.51
Others
Debtors
Agrani
Convergence
Limited
Agrani
Satellite
Services
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
3,341.70
3,275.34
5,999.89
5,990.14
6,333.53
3,341.70
3,275.34
3,246.52
4,739.37
3,955.12
-
-
-
-
-
-
-
1,232.12
-
-
-
-
521.31
-
-
-
-
999.94
-
-
-
-
206.34
-
-
-
-
106.72
-
-
-
-
99.62
xlvii
Particular
Limited
Creditors for
expenses and
other
liabilities
Integrated
Subscribers
Management
Services
Limited
Agrani
Convergence
Limited
Corporate
Guarantee
Given
Quick Call
Private
Limited
Smart Talk
Private
Limited
Bhilwara
Telenet
Services
Limited
Agrani
Convergence
Limited
With Other
Related
Parties:
Loan,
Deposit and
Advances
Given
Afro-Asian
Satellite
Comm. (UK)
Limited
Afro-Asian
Satellite
Comm. (Gib.)
Limited
Agrani
Satellite
Comm. (Gib.)
Limited
ITZ Cash
Card Limited
Essel Agro
Private
Limited
ASC
Telecommuni
cation
Limited
Jay Properties
Limited
Others
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
9.27
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
9.27
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
6,766.07
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
-
-
-
-
6,753.55
-
-
9.27
9.27
12.52
-
-
-
-
-
-
140.00
-
-
-
-
15.00
-
-
-
-
15.00
-
-
-
-
10.00
-
-
-
-
100.00
25,360.89
25,054.20
23,941.55
22,011.53
18,314.51
3,768.82
3,768.82
3,768.82
3,768.82
3,768.82
8,277.08
8,277.08
8,277.08
8,277.08
8,277.08
38.41
38.41
38.41
38.41
-
1,688.08
587.21
1,331.28
-
-
9,679.14
11,091.60
8,996.56
9,233.33
-
1,512.01
1,506.81
1,439.82
585.93
-
-
-
-
-
5,073.23
90.66
90.96
89.58
107.96
1,195.38
xlviii
Particular
Provision
outstanding
against
advances
given
Afro-Asian
Satellite
Comm. (UK)
Limited
Afro-Asian
Satellite
Comm. (Gib.)
Limited
Others
Loan,
Deposit and
Advances
Taken
New Era
Entertainment
Network
Limited
Suncity
Project
Limited
Kenlott
Gaming
Solutions
Private
Limited
Ayepee
Lamitube
Limited
Churu
Trading
Company
Private
Limited
Zee
Entertainment
Enterprises
Limited
Wire &
Wireless
India Limited
Rupee
Finance &
Management
P.Ltd.
Others
Creditors for
expenses and
other
liabilities
Zee
Entertainment
Enterprises
Limited
New Era
Entertainment
Network
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
12,164.61
12,164.61
12,164.61
12,084.31
12,084.31
3,768.82
3,768.82
3,768.82
3,768.82
3,768.82
8,277.08
8,277.08
8,277.08
8,277.08
8,277.08
118.71
118.71
118.71
38.41
38.41
35,126.11
38,841.26
601.21
56.78
4,481.62
-
-
-
-
4,364.78
27.00
27.00
27.00
27.00
27.00
-
-
19.00
19.00
-
10.78
10.78
10.78
10.78
10.78
33,398.37
30,040.66
-
-
-
4,205.14
4,323.61
-
-
-
347.50
217.50
38.06
-
-
725.03
403.67
506.37
-
-
127.34
102.89
-
-
79.06
23,426.77
21,083.68
15,733.31
8,626.05
448.85
8,597.21
8,508.59
7,305.84
4,616.88
447.77
-
-
-
2,670.53
-
xlix
Particular
Limited
Period ended 30th
June 2008
Total
Amount
Amount
for
Major
Parties
Integrated
Subscribers
Management
Services
Limited
Zee Turner
Limited
Essel
Corporate
Services
Limited
Others
Corporate
Guarantee
Given
Procall
Private
Limited
Quick Call
Private
Limited
Smart Talk
Private
Limited
Bhilwara
Telenet
Services
Limited
Suncity
Project
Limited
Corporate
Guarantee
Received
Zee
Entertainment
Enterprises
Limited
Note: 1
Year ended 31st
March, 2007
Total
Amoun
Amount
t for
Major
Parties
Year ended 31st
March, 2006
Total
Amount
Amount
for
Major
Parties
Year ended 31st
March, 2005
Total
Amount
Amount
for
Major
Parties
-
-
-
1,164.44
-
13,912.60
11,826.20
8,006.33
-
-
-
-
-
-
-
916.96
Others
Debtors
Asia Today
Limited
Asia TV
Limited
Zee News
Limited
Zee
Entertainment
Enterprises
Limited
Essel Agro
Private
Limited
New Era
Entertainment
Network
Limited
Year ended 31st
March 2008
Total
Amount
Amount
for
Major
Parties
748.89
3,632.94
3,607.82
421.14
3,645.08
174.20
529.65
1.08
27.42
354.89
386.37
237.72
178.58
27.42
-
-
164.73
172.25
-
438.51
343.46
468.82
-
-
2,006.34
1,931.05
1,933.22
-
-
-
-
-
91.49
-
-
-
-
85.54
-
808.08
972.06
840.59
1.79
-
-
-
240.00
40.00
500.00
-
-
200.00
-
-
-
-
15.00
15.00
-
-
-
15.00
15.00
-
-
-
10.00
10.00
-
-
-
-
-
500.00
20,527.00
18,467.31
20,527.00
22,240.31
18,467.31
4,000.00
22,240.31
4,000.00
4,000.00
Major parties denote who account for 10% or more of the aggregate for that category of transaction.
l
4,000.00
2. The related party transaction disclosed are as per the requirement of accounting standard ‘18’.
3. Accounting Standard 'AS-18' became applicable to the Company for the financial year ended March
4. The above Statement should be read with the Significant Accounting Policies and selected notes to
accounts Restated Summary Statement as appearing in Annexure 4 of the Auditors Report disclosed
in this Letter of Offer.
li
SUMMARY
Summary of Business
We are one of the group companies of the Essel group. The Essel Group has diverse national and global
business interests, encompassing Packaging – Laminated tubes (Essel Propack Limited (EPL) & Engoron),
Media - Television/ Electronic media (ZEEL, Zee News, WWIL and Dish TV), Online Lotteries (Playwin),
Outdoor Family entertainment & multiplexes (Pan India Paryatan and E City Entertainment), Newspaper
publishing (DNA), Real estate business and Indian Cricket League (in partnership with IL&FS). The Essel
Group is headed by Mr. Subhash Chandra.
We are the pioneers of the DTH business in India, where our core business is distribution of multiple television
channels and allied video/ audio services to subscribers on a monthly subscription basis. Our business
commenced operations in October 2003 (pursuant to a DTH license issued by the Ministry of Information &
Broadcasting, Government of India in 2003) with 47 channels. Currently, we offer over 200 digital channels
(including approx 20 voice channels) to approx. 4 million subscribers across India.
We also provide various Value added services like Electronic Program Guide, Parental Lock, Sports Active,
News Active, Games and Near Video on Demand. Our current subscription packages include Silver Pack with
110 channels, Gold Pack with 125 channels, Diamond Pack with 140 channels, Platinum Pack with 165
channels; We also offer multi-room pricing at Rs. 155 (plus taxes), and package customization to suit regional
needs. Infrastructure wise we have 9 Ku band transponders on the New Skies Satellite (NSS) which provide
footprint across the country. We also have bookings on the Protostar satellite which will enable access for upto
12 additional transponders. We have approx. more than 100 Dish Care Centers (DCCs) and service franchisees,
which function as our service face in the market providing installation and after sale-service. We currently have
a 500 seat call centre, operating 24*7, answering calls from across all over India, related to content provisioning,
prospective customers & dealers, complaints & suggestions, service packages etc. Our 675 distributors and
approx. 38,000 dealers present in 6,500 towns ensure proximity with the consumers across India. Further we
have over 200 ‘Dish Shoppe’ which are exclusively involved in sale of Set Top Box, and other customer related
services. The Dish TV Shoppe will also provide the demo product experience to prospective users and will serve
as collection and service points for existing subscribers.
We also hold the permission from the MIB for the implementation of the HITS (Head-end In the Sky) platform
where we will be able to provide digital signals to our subscribers on mass scale. The Company is also in the
business of providing teleport services (uplinking and space segments) to the broadcasters of various channels.
We believe, following are the strengths that will differentiate us from the competitors:
•
Wide subscriber base: The Company has created a Zonal structure comprising of 7 zones to create a
wide spread distribution capability across India. Our emphasis is to build capability in the team to
develop subscriber relationship management and CRM calendars which will help in timely collection
and to upgrade offers. We have a geographically diverse subscriber base. Maharashtra, Gujarat and
Karnataka contribute approx. 30% to the subscriber base.
•
Distribution & customer service network: We have a network of 625 distributors and approx. 38,000
dealers (dealership presence in 4,200 towns). We have systems for collections and customer service
with over 12,500 service personnel and 100 Dish Care Centers, over 200 ‘Dish Shoppe’ and offering
customer care in 9 different languages through call centers.
•
Infrastructure: We have 9 transponders and each transponder can host atleast 15 channels and more.
We have partnered with following software providers:
o
Open TV for middle ware
o
CONAX for encryption and authentication
o
SCOPUS for compression systems
o
HARRIS for automation and broadcasting software
•
First Mover Advantage: On account of being the first DTH service provider in India, with a large
footprint of trade and subscribers in both urban and rural markets the company has secured relatively
larger scale and market share.
1
•
Promoter backing: Our company is promoted by Essel - Zee group., a experienced player in Media and
Entertainment Industry with requisite industry domain knowledge and wide spread awareness of the
brand i.e. Zee.
•
Multi-tiered / Regional packages: The content is offered at various price points to customers based on
the viewer preference and capacity to pay. This helps us in driving numbers from different consumer
segments – both demographically as well as geographically.
•
Cost conscious: The entire set-up is under continuous monitoring to derive economies of scale from
content providers and equipment suppliers.
•
Transponder capacity: We are using nine transponders as on date on the NSS-6 Satellite comprising
four transponders of 54 Mhz. and 5 transponders of 36 Mhz. Distributed in horizontal and vertical
polarizations.
Strategy
In 2007, the E&M industry recorded a growth of 17% over the previous year. The industry reached an estimated
size of Rs. 513 billion in 2007, up from Rs. 438 billion in 2006. In the last four years 2004-2007, the industry
recorded a cumulative growth of 19% on an overall basis (Source: FICCI - PWC report March 2008).
Television and entertainment media are reportedly on a high growth trajectory, as is the consumers’ capacity &
propensity to spend on lifestyle products. Dish TV is expected to be one of the leading player in the digital
services space, Leveraging strengths built for marketing and brand building, distribution, service quality,
consumer friendly packaging and pricing and by providing a wide choice of content to the customers. The
Revenue stream is expected to be strengthened through a mix of value added services, customized packages and
growth in the number of subscribers. The Company is also looking to enhance the corporate and MDU sales
network to cater to large customers for bulk deals and for builders and /or Apartments and Resident Welfare
Associations.
Summary of industry
Key Trends in Media Consumption - 2007
•
•
•
Growth in media audience as per the data released in IRS 2007, in the last four years, India’s
population has grown by 92 million individuals i.e. a growth of 12.5%. Of this, the media audience has
increased by 86 million individuals i.e. a growth of 18.4%. High growth in television- cable and
satellite subscribers is driving the growth in media audience as per the research carried out. This clearly
indicates positive implications for the current as well as potential players in the television distribution
industry.
Rural is the new urban as per IRS 2007, the country is witnessing higher growth in literacy rates, better
growth in females working and moving towards smaller household sizes. Further, rapid urbanization is
concurrently escalating the working population along with growth in the extreme ends of the strataSEC A as well as Sec E.
The cumulative effect of the above factors has put the DTH market on a high-growth trajectory.
Recent Key Trends in Television Industry
•
•
•
•
•
Digitalization of delivery platforms
Launch of new TV channels
Implementation of CAS in select areas
Increased investments in the sector
Television content on the mobile handsets
The key drivers for the DTH business are expected to be as follows:
•
CAS implementation & digitalization in 55 cities
•
Increased spends by competition in educating subscribers
•
Adult content
•
Content superiority & expansion
•
Brand Strategy
2
•
•
•
•
•
Service Excellence
Distribution reach
Continuing growth of high end televisions
Robust 8 - 9% growth of the Indian economy
Launch of new technology like VGA Box, DVR etc.
The above ‘industry summary’ has been prepared by taking the subject matter and the data points from “The
Indian Entertainment & Media Industry – Sustaining Growth, Report 2008” (FICCI – PWC report March 2008)
prepared by PricewaterhouseCoppers (PWC) and FICCI. For more details see “Industry Overview” on page 40
of the Letter of Offer
3
THE ISSUE
Equity Shares proposed to be issued by the Company
Rights Entitlement
Record Date
Issue Price per Equity Share
Equity Shares outstanding prior to the Issue
Equity Shares outstanding after the Issue
Use of Issue proceeds
Terms of the Issue
51,81,49,592
121 Equity Shares for every 100 Equity Shares
October 16, 2008
Rs. 22
42,82,22,803
42,82,22,803 fully paid-up Equity Shares and 51,81,49,592
partly paid up Equity Shares
For more information, see “Objects of the Issue” on 26
For more information, see “Terms of Issue” on page 340
Terms of Payment
Due Date
On application
Payable after 3 (three) months but within 9 (nine) months from
the date of Allotment, at the option of the Company
Payable after 9 (nine) months but within 18 (eighteen) months
from the date of Allotment, at the option of the Company
4
Amount
Rs. 6
Rs. 8
Rs. 8
SELECTED FINANCIAL INFORMATION
Restated Summary Statement of Assets and Liabilities of the Group (Consolidated)
(Rs. in Lacs)
Particulars
A
Fixed Assets
a) Intangible Assets
Goodwill on Consolidation
Gross Block
Less : Depreciation/Amortization
upto date
Net Block
Total (a)
b) Tangible Assets
Gross Block
Less : Depreciation/Amortization
upto date
Net Block
c) Capital Work in Progress
B
C
Total (A) (a+b+c)
Investments
Current Assets, Loans and
Advances :
Accrued Interest on Investments
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Total (C)
D
Unsecured Loans
Current Liabilities and Provisions
Advance Share Application Money
Minority Interest
Deferred Tax Liability
F
i
ii
J
March 31,
2008
March 31,
2007
March 31,
2006
March 31,
2005
March 31,
2004
7,282.22
7,268.35
7,797.63
1,000.61
1,008.26
1,000.33
1,008.26
1,008.59
2,636.81
2,280.80
989.88
250.16
150.09
53.13
4,645.41
4,987.55
6,807.75
750.45
850.24
955.46
4,645.41
92,738.85
4,987.55
83,926.35
6,807.75
58,002.60
750.45
5,847.03
1,858.50
3,797.75
1,963.72
3,625.74
25,221.20
20,854.82
6,439.00
350.84
2,438.20
2,370.52
67,517.65
27,844.90
100,007.96
0.26
63,071.53
27,932.45
95,991.53
0.26
51,563.60
24,476.85
82,848.20
0.26
5,496.19
17,759.00
24,005.64
0.26
1,359.55
12,299.25
15,517.30
0.26
1,255.22
12,460.99
15,679.93
7.76
-
-
-
-
-
0.14
440.25
583.17
117.62
51.39
171.20
866.77
3,959.09
4,031.81
4,183.93
1,011.48
447.94
582.45
1,442.33
5,114.50
1,277.72
772.27
833.48
1,074.44
23,141.42
28,983.09
18,760.85
28,490.33
15,551.16
21,130.43
11,486.18
13,321.32
12,049.20
13,501.82
9,247.92
11,771.72
Liabilities and Provisions
Secured Loans
E
As at
June 30,
2008
Total (D)
Networth (A+B+C-D)
Represented by
Share Capital
Less: Share Suspense (Refer Note 6
of Annexure D)
Reserves & Surplus (Excluding
Revaluation Reserve)
Less Debit Balance of Profit and Loss
Account
Less Miscellaneous Expenditure to
the extent not written off or adjusted
Reserves & Surplus (Net)
Networth (i+ii)
802.01
6,840.03
14,449.67
780.85
1,493.98
219.51
52,330.22
136,886.07
80.58
190,098.88
(61,107.57)
47,611.66
117,813.28
78.86
172,343.83
(47,861.71)
4,850.98
91,429.17
68.58
110,798.40
(6,819.51)
1,844.61
18,831.89
7,400.00
28,857.35
8,469.87
162.41
9,047.87
5,141.72
48.08
15,894.06
13,125.32
1,852.41
7,205.72
1,372.17
61.80
10,711.61
16,747.80
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
7,156.88
-
-
(2,874.65)
-
-
-
4,282.23
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
16,958.57
16,958.57
16,958.57
37,282.45
36,869.22
36,928.07
82,348.37
69,102.51
28,060.31
35,969.46
30,900.54
27,336.34
-
-
-
-
0.24
0.81
(65,389.80)
(61,107.57)
(52,143.94)
(47,861.71)
(11,101.74)
(6,819.51)
1,312.99
8,469.87
5,968.44
13,125.32
9,590.92
16,747.80
The above statement should be read with the Significant Accounting Policies and selected notes to accounts for Restated
Summary Statements as appearing in Annexure D of the Financial Statements.
Notes: Current liabilities and provisions consist primarily of liabilities to sundry creditors, advances & deposits received and
temporary overdrafts as well as provisions for leave travel allowance, medical allowance, fringe benefit tax and income
taxes. Current liabilities and provisions for FY 2007 were Rs. 91,429.17 Lacs and for FY 2008 were Rs. 1,17,813.28 Lacs.
5
Restated Summary Statement of Profit and Loss of the Group (Consolidated)
(Rs. in Lacs)
Particulars
INCOME
Sales & Services (Refer Annexure J)
Other Income (Refer Annexure K )
Increase/(Decrease) in Inventories
Total
EXPENDITURE
Purchases
Operating Costs
Personnel Cost
Administrative and Other Expenses
Selling and Distribution Expenses
Financial Charges
Depreciation/Amortization
Total
Profit/(Loss) before Tax &
Exceptional item
Exceptional item (Refer Note 10.1 to
Annexure D)
Profit/(Loss) before Tax but after
Exceptional item
Provision for Taxation-Current Tax
-Deffered Tax
-Fringe Benefit Tax
-Wealth Tax
Excess/ (Short) Provision for earlier
years Written Back/Provided
Profit/(Loss) after Tax but before
Minority Interest
Minority Interest
Profit/(Loss) after Tax and Minority
Interest
Balance Brought Forward
Impact of Change in Ownership Interest
Profit on sale of Subsidiary (Refer Note
1 below)
Less:Transfer to Restructuring Account
(Refer Annexure D)
Add: Balance received from Subsdiary
pursuant to the Scheme
Balance Carried to Balance Sheet
Net Profit/(Loss) Before Adjustment
Total of Adjustments (See para D.2 of
annexure D )
Net Profit/(Loss) After Adjustment
For the three
months ended
June 30, 2008
For the year
ended
March 31,
2008
For the year
ended
March 31,
2007
For the year
ended
March 31,
2006
For the year
ended
March 31,
2005
For the year
ended
March 31,
2004
16,468.87
210.06
16,678.93
(142.93)
16,536.00
41,278.51
993.14
42,271.65
465.55
42,737.20
19,203.07
887.68
20,090.75
66.23
20,156.98
5,273.78
149.18
5,422.96
(119.81)
5,303.15
4,558.44
412.40
4,970.84
(695.57)
4,275.27
10,259.63
478.85
10,738.48
368.58
11,107.06
1,472.66
12,103.96
2,488.80
33,327.70
120.31
22,512.34
984.64
8,048.05
2,148.79
2,715.56
8,587.28
742.07
1,594.80
4,204.23
2,201.33
701.26
803.19
859.03
1,413.64
5,815.62
2,635.31
4,726.81
29,762.80
4,138.62
18,057.54
5,786.53
15,703.29
83,706.71
3,114.52
9,086.44
1,760.95
6,236.26
45,032.15
1,104.21
3,086.69
434.30
488.44
14,847.59
1,240.89
137.40
334.85
476.91
7,857.59
1,313.29
118.66
186.10
480.42
12,286.85
(13,226.80)
(40,969.51)
(24,875.17)
(9,544.44)
(3,582.32)
(1,179.79)
-
-
-
-
-
12,084.30
(13,226.80)
(40,969.51)
(24,875.17)
(9,544.44)
(3,582.32)
(13,264.09)
1.72
10.28
(29.03)
-
-
0.56
-
17.21
60.92
26.61
18.91
-
-
0.13
0.51
0.58
-
-
-
-
(0.98)
-
-
4.40
1.68
(13,245.86)
(41,042.20)
(24,873.33)
(9,563.35)
(3,577.92)
(13,262.97)
-
-
-
1.82
13.72
15.68
(13,245.86)
(41,042.20)
(24,873.33)
(9,561.53)
(3,564.20)
(13,247.29)
(69,102.51)
(28,060.31)
(35,969.46)
(30,900.54)
(27,336.34)
(14,089.15)
-
-
-
177.00
-
-
-
-
-
4,315.61
-
0.10
-
-
32,685.92
-
-
-
-
-
96.56
-
-
-
(82,348.37)
(14,002.59)
(69,102.51)
(41,412.76)
(28,060.31)
(24,007.08)
(35,969.46)
(21,489.65)
(30,900.54)
(3,970.45)
(27,336.34)
(854.84)
756.73
370.56
(866.25)
11,926.30
392.53
(12,408.13)
(13,245.86)
(41,042.20)
(24,873.33)
(9,563.35)
(3,577.92)
(13,262.97)
Note:
Profit on Sale of Investment represents reversal of losses, reserves and goodwill on sale of investment in
subsidiaries.
The above statement should be read with the Significant Accounting Policies and Selected Notes on Accounts for
Restated Summary Statements, as appearing in Annexure D of the Financial Statements.
Our sales and services for FY 2008 was Rs. 41,278.51 Lacs as compared to Rs. 19,203.07 Lacs for FY 2007,
which is an increase of 114.96%. Our total revenues increased from Rs. 20,090.75 Lacs for FY 2007 to Rs.
42,271.65 Lacs for FY 2008, which is an increase of 110.40% over FY 2007.
Our total expenditure for FY 2008 was Rs. 83,706.71 Lacs and increase of 85.88% over Rs. 45,032.15 for FY
2007. Operating costs increased 48.04% due to increased number of subscribers. While the selling and distribution
6
expenses increased 98.73% in a bid to acquire more number of subscribers. Depreciation for the assets including
for CPE increased 151.81% mainly on account of increased CPEs leased. Financial charges increased 228.60% due
to increased debt financing to fund the subscriber acquisition costs. Personnel costs increased 90.99% due to
increased hiring of personnel.
During the financial year ended 31st March, 2007, the Scheme of Arrangement (the Scheme) under
Section 391 to 394 read with Section 78, 100 and other applicable provisions of the Companies Act,
1956 between Zee Entertainment Enterprises Limited. (ZEEL) (formerly known as Zee Telefilms
Limited), Siti Cable Network Limited (SITI) and New Era Entertainment Network Limited. (NEENL)
and Dish TV India Limited (the Company) (formerly known as ASC Enterprises Limited) and their
respective shareholders have been sanctioned by the Hon’ble High Court of Judicature at Mumbai and
High Court of Judicature at New Delhi vide their respective order dated 12th January, 2007 and 18th
December, 2006 and a copy of these orders have been filed with the respective Registrar of Companies
on 17th January, 2007 and 19th January, 2007 respectively. The Scheme has been given effect in
financial statements for the year ended 31st March 2007 except actual allotment and reorganization of
share capital which has taken place in the financial year ended 31st March, 2008.
Therefore, our results of financial operations, are not comparable with our past performance.
•
Prior to Financial Year 2006, the Company had transmission rights only for the ‘Zee’ and ‘ESPN’
channels which had comparatively limited content availability at its platform and low subscription
rates. Consequently, the Company could not reach mass markets especially in the metropolitan cities.
The Company received transmission rights for the ‘Star’ and ‘Sony’ in approximately June 2006,
which has contributed in a substantial increase in the revenues.
•
Due to the mandatory implementation of CAS in some parts of Delhi, Mumbai and Kolkata, consumers
were compelled to opt either for DTH services or CAS. Many customers opted for DTH services which
led to increased activation in such cities resulting in higher revenues.
•
In terms of Direct to Home (DTH) license agreement, the license fee was being provided on revenue
received from DTH related activities. However in August 2008, Telecom Dispute Settlement and
Appellate Tribunal in the case of one of the DTH service provider passed an order stating that the
license fee should also be paid on all the revenue including sales of set top boxes. Therefore the license
fee of Rs. 756.73 lacs is provided for Financial Year ended March 31, 2004, 2005, 2006, 2007, 2008
and period ended June 30, 2008.
7
Restated Summary Statement of Assets and Liabilities of the Company (Standalone)
(Rs. In lacs)
Particulars
June 30,
2008
As at
March 31,
March 31,
2007
2006
March 31,
2008
March 31,
2005
March 31,
2004
Fixed Assets
Gross Block
Less : Depreciation/Amortization upto
date
7,281.89
7,268.02
7,253.25
1,000.28
1,000.00
1,000.00
2,636.51
2,280.52
855.74
250.00
150.00
50.00
Net Block
4,645.38
4,987.50
6,397.51
750.28
850.00
950.00
Gross Block
Less : Depreciation/Amortization upto
date
85,042.13
77,535.78
54,449.08
5,567.92
713.18
101.20
23,459.91
19,360.73
5,881.28
259.10
81.06
25.98
Net Block
61,582.22
58,175.05
48,567.80
5,308.82
632.12
75.22
14,189.01
13,797.66
11,264.06
5,365.24
-
260.90
Total (A) (a+b+c)
80,416.61
76,960.21
66,229.37
11,424.34
1,482.12
1,286.12
9,445.10
9,445.10
9,445.10
9,440.10
11,263.61
11,271.11
b) Tangible Assets
Investments
Current Assets, Loans and Advances
420.33
471.22
113.71
47.47
-
-
Sundry Debtors
3,765.08
3,843.70
3,906.44
753.30
233.76
460.36
1,269.98
1,994.23
1,133.17
593.62
441.08
464.01
30,757.71
28,441.50
18,694.06
14,680.02
12,545.49
13,166.91
-
-
-
-
-
0.14
36,213.10
34,750.65
23,847.38
16,074.41
13,220.33
14,091.42
Inventories
Loans and Advances
Accrued Interest on Investments
Total (C)
Secured Loans
Unsecured Loans
801.01
6,838.68
14,446.96
780.85
1,394.48
213.47
50,542.39
45,823.83
3,063.15
56.78
97.78
1,787.78
133,666.48
114,518.00
86,974.13
18,507.77
5,467.05
3,114.98
-
-
-
7,400.00
-
0.45
Total (D)
185,009.88
167,180.51
104,484.24
26,745.40
6,959.31
5,116.68
Networth (A+B+C-D)
(58,935.07)
(46,024.55)
(4,962.39)
10,193.45
19,006.75
21,531.97
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
7,156.88
-
-
(2,874.65)
-
-
-
4,282.23
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
16,958.57
16,958.57
16,958.57
37,282.45
37,282.45
37,282.45
80,175.87
67,265.35
26,203.19
34,245.88
25,432.58
22,907.36
(63,217.30)
(50,306.78)
(9,244.62)
3,036.57
11,849.87
14,375.09
Networth (i+ii)
(58,935.07)
(46,024.55)
(4,962.39)
10,193.45
19,006.75
21,531.97
Represented by
Share Capital
Less: Share Suspense (Refer Note 5 of
Annexure 4)
Less: Debit Balance of Profit and Loss
Account
Note: The above Statement should be read with the Significant Accounting Policies and selected notes to
accounts for Restated Summary Statement as appearing in Annexure 4 of Financial Statements.
8
Restated Summary Statement of Profit and Loss of the Company (Standalone)
(Rs. In lacs)
Particulars
For the three
months period
ended June 30,
2008
For the year
ended
March 31,
2008
For the year
ended
March 31,
2007
For the year
ended
March 31,
2006
For the year
ended
March 31,
2005
For the year
ended
March 31,
2004
16,445.91
41,328.35
19,132.05
3,144.04
964.06
1,054.94
INCOME
Sales & Services (Refer Annexure 10 )
Other Income (Refer Annexure 11)
Total
209.08
890.02
876.68
77.46
284.67
25.46
16,654.99
42,218.37
20,008.73
3,221.50
1,248.73
1,080.40
(50.89)
357.51
66.23
47.46
-
-
16,604.10
42,575.88
20,074.96
3,268.96
1,248.73
1,080.40
EXPENDITURE
Purchases
1,472.66
2,402.77
120.31
611.77
469.52
716.39
Operating Costs
12,407.17
34,425.47
22,801.51
7,316.22
2,469.55
487.26
Personnel Cost
1,138.62
2,950.76
1,487.21
214.87
200.16
135.55
1,314.68
1,017.86
2,966.47
2,528.04
186.91
159.77
6,499.67
20,149.81
10,250.30
3,264.47
0.62
0.50
Financial Charges
2,505.71
5,779.09
1,752.91
201.28
306.47
131.19
Total
Profit/(Loss) before Tax and
Exceptional items
Exceptional items (Refer Note 9.1 to
Annexure 4 )
Exceptional items
-Deffered Tax
-Fringe Benefit Tax
-Wealth Tax
years Written Back /(Provided)
4,456.81
14,904.73
5,752.84
283.45
172.26
56.70
29,498.50
83,579.10
44,693.12
12,078.97
3,778.35
2,842.27
(12,894.40)
(41,003.22)
(24,618.16)
(8,810.01)
(2,529.62)
(1,761.87)
-
-
-
12,084.30
(24,618.16)
(8,810.01)
(2,529.62)
(13,846.17)
-
-
-
-
(12,894.40)
(41,003.22)
-
-
-
-
-
16.00
57.44
24.50
3.29
-
-
0.13
0.51
0.58
-
-
-
-
(0.98)
-
-
4.40
1.67
Profit/(Loss) after Tax
(12,910.53)
(41,062.15)
(24,643.24)
(8,813.30)
(2,525.22)
(13,844.50)
Less:Transfer to Restructuring
Account(Refer Annexure 4 )
(67,265.34)
(26,203.19)
(34,245.88)
(25,432.58)
(22,907.36)
(9,062.86)
-
-
32,685.93
-
-
-
(80,175.87)
(67,265.34)
(26,203.19)
(34,245.88)
(25,432.58)
(22,907.36)
(13,667.26)
(41,320.46)
(25,188.15)
(20,783.26)
(2,788.40)
(77.41)
Net Profit/(Loss) Before Adjustment as
per Audited Statement
annexure 4)
756.73
258.31
544.91
11,969.96
263.18
(13,767.09)
(12,910.53)
(41,062.15)
(24,643.24)
(8,813.30)
(2,525.22)
(13,844.50)
Note: The above statement should be read with the Significant Accounting Policies and Selected Notes to
Accounts for Restated Summary Statements, as appearing in Annexure 4 of the Financials Statements.
9
GENERAL INFORMATION
Dear Equity Shareholder(s),
Pursuant to the resolution passed by the Board of Directors at its meeting held on April 24, 2008 and October 3,
2008, it has been decided to make the following offer to the Equity Shareholders, with a right to renounce:
ISSUE OF 51,81,49,592 EQUITY SHARES FOR CASH AT APRICE OF RS. 22 PER EQUITY SHARE
INCLUDING A PREMIUM OF RS. 21 PER EQUITY SHARE AGGREGATING TO RS. 1,13,992.91
LAKHS TO THE EQUITY SHAREHOLDERS OF DISH TV INDIA LIMITED ON RIGHTS BASIS IN
THE RATIO OF 121 EQUITY SHARES FOR EVERY 100 EQUITY SHARES HELD ON THE
RECORD DATE i.e. OCTOBER 16, 2008 IN TERMS OF THE LETTER OF OFFER (“ISSUE”). THE
TOTAL ISSUE PRICE IS 22 TIMES OF THE FACE VALUE OF THE EQUITY SHARE. THE ISSUE
PRICE FOR THE EQUITY SHARES WILL BE PAID IN THREE INSTALLMENTS: RS. 6 WILL BE
PAYABLE ON APPLICATION, RS. 8 WILL BECOME PAYABLE, AT THE OPTION OF THE
COMPANY, AFTER 3 MONTHS BUT WITHIN 9 MONTHS FROM THE DATE OF ALLOTMENT
AND THE BALANCE RS. 8 WILL BECOME PAYABLE, AT THE OPTION OF THE COMPANY,
AFTER 9 MONTHS BUT WITHIN 18 MONTHS FROM THE DATE OF ALLOTMENT.
REGISTERED OFFICE OF THE COMPANY
CORPORATE OFFICE OF THE COMPANY
B-10, Essel House
Lawrence Road
Industrial Area
Delhi 100 035, India
Tel: +91 11 2710 1145
Fax: +91 11 2719 2172
Website: www.dishtv.in
FC-19, Sector 16A
Noida, 201 301, Uttar Pradesh, India
Tel: : +91 120 2511 064
Fax: +91 120 4357 078
Website: www.dishtv.in
Registration No: 55-101836
Corporate Identification Number: L51909DL1988PLC101836
The Equity Shares are listed on the BSE, NSE and CSE. The Equity Shares are infrequently traded on CSE and
the Company has made an application dated September 22, 2008 for voluntary delisting of our Equity Shares
from the CSE.
ADDRESS OF THE REGISTRAR OF COMPANIES:
The Registrar of Companies
National Capital Territory of Delhi and Haryana
B-Block, Paryavaran Bhawan
CGO Complex, Lodhi Road
New Delhi 110 003, India
BOARD OF DIRECTORS
Name
Mr. Subhash Chandra
Chairman
Non-Executive Director
Non-Independent Director
Managing Director
Age
(in years)
58
Address
Flat 4, 1 Hyde Park Street, Paddington, London, W2 JW, United
Kingdom.
53
Nandtara, 22, Oak Drive, Sultanpur, Mehrauli, New Delhi 110 030,
India.
Mr. Bhagwan Dass Narang
Independent Director
63
Flat No. 29, Ground Floor, ‘F’ Block, DDA Apartments, SES (Near
Market), Sheikh Sarai, Phase I, New Delhi 110 017, India.
Mr. Arun Duggal
62
A-4, 3rd Floor, West End Colony, New Delhi 110 021, India.
10
Name
Age
(in years)
Dr. Pritam Singh
Mr. Eric Louis Zinterhofer
Mr. Mintoo Bhandari
Alternate Director to Mr. Eric
Louis Zinterhofer
Address
67
House No. A2/14, PWO Complex, Plot No. 1A, Sector 43, Gurgaon
122 001, Haryana, India.
58
252, Tahnee Heights Co-operative Housing Society, D – Building, Petit
Hall, 66 Nepeansea Road, Mumbai 400 006, India
37
660 Park Avenue, New York, N.Y. 10021, U.S.A
43
8th Floor, Kubelisque, Nargis Dutt Road, Bandra(W), Mumbai – 400
050, India
For more details regarding our Directors refer to “Management” on page 63.
Company Secretary and Compliance Officer
Mr. Jagdish Patra
FC-19, Sector 16A
Noida 201 301
Uttar Pradesh, India
Tel: +91 120 2599 391
Fax: +91 120 4357 078
Investors may contact the Compliance Officer or the Registrar for any pre-Issue / post-Issue related matters,
such as non receipt of letter of allotment, credit of Allotted Equity Shares in the respective beneficiary account
or refund orders.
Bankers to the Company
ICICI Bank Limited
K-1, Senior Mall, Sector-18
Noida 201 301, Uttar Pradesh, India
Tel: : +91 120 4059893
Fax: +91 120 4059843
Email:ruma.bhattacharya@icicibank.com
Contact Person: Ms. Ruma Bhattacharya
Standard Chartered Bank
2nd Floor, Client Relationship
90 MG Road, Fort
Mumbai 400 001, India
Tel: : +91 9833214313/ +91 22 22683373
Fax: +91 22 22624912
Email: suryakant.sohoni@standardchartered.com;
shruti.vegrecha@standardchartered.com
Contact Persons: Mr. Suryakant Sohoni and Ms.
Shruti Vegrecha
Axis Bank Limited
Ground Floor
Atlanta, Nariman Point
Mumbai 400 021
Tel: : +91 9821487888/ +91 22 22875366
Fax: +91 22 186944
Email: Jayendra.shetty@axisbank.com
Contact Person: Mr. Jayendra Shetty
Issue Management Team
Lead Manager to the Issue
Enam Securities Private Limited
11
801, Dalamal Towers
Nariman Point, Mumbai 400 021, India
Tel: +91 22 6638 1800
Fax: +91 22 2284 6824
Email: dishtv@enam.com
Website: www.enam.com
Contact Person: Mr. Sachin K. Chandiwal
Enam Securities Private Limited shall be responsible for and shall coordinate the following activities in relation
to this Issue:
No
1.
2.
3.
4.
5.
6.
7.
Activities
Capital structuring with the relative components and formalities such as composition of debt and equity, type of
instruments.
Drafting and Design of the offer document and of advertisement / publicity material including newspaper
advertisements and brochure / memorandum containing salient features of the offer document. To ensure
compliance with the SEBI Guidelines and other stipulated requirements and completion of prescribed
formalities with Stock Exchange and SEBI.
Retail/Non-institutional marketing strategy which will cover, inter alia, preparation of publicity budget,
arrangements for selection of (i) ad-media, (ii) bankers to the issue, (iii) collection centres (iv) distribution of
publicity and issue material including composite application form and the abridged letter of offer and the draft
letter of offer to the extent applicable.
Institutional marketing strategy to the extent applicable.
Selection of various agencies connected with the issue, namely Registrars to the Issue, Printers, and
Advertisement agencies.
Follow-up with bankers to the issue to get quick estimates of collection and advising the issuer about closure of
the issue, based on the correct figures.
The post-issue activities will involve essential follow-up steps, which must include finalisation of basis of
allotment / weeding out of multiple applications, listing of instruments and dispatch of certificates and refunds,
with the various agencies connected with the work such as registrars to the issue, bankers to the issue, and bank
handling refund business. Even if many of these post-issue activities would be handled by other intermediaries,
the Lead Manager shall be responsible for ensuring that these agencies fulfill their functions and enable him to
discharge this responsibility through suitable agreements with the Issuer Company.
Advisors to the Issue
Standard Chartered- STCI Capital Markets Limited
Dheeraj Arma
First Floor, Ananth Kanekar Marg
Bandra (East)
Mumbai 400 051
India
Tel: +91 22 6751 5999/ +91 22 6751 5800
Fax: +91 22 6702 3194
Email: dtil.rights@standardcharteredcapitalmarkets.com
Contact Person: Mr. Jaya Kumar Subramanian
Domestic Legal Counsel to the Issue
Luthra and Luthra Law Offices
103, Ashoka Estate,
24, Barakhamba Road,
New Delhi 110 001, India
Tel: +91 11 4121 5100
Fax: +91 11 2372 3909
Email: luthra@luthra.com
Auditors of the Company
MGB & Co., Chartered Accountants
21, Shankar Vihar
Vikas Marg, Delhi 1100 92, India
Tel: + 91 11 4244 0490
12
Fax: +91 11 2250 8300
Email: ljain@mgbco.com
Contact Person: Mr. Lalit Kumar Shrishrimal
Registrar to the Issue
Sharepro Services (India) Private Limited
Satam Estate, 3rd Floor
Above Bank of Baroda
Cardinal Gracious Road
Chakala, Andheri (E)
Mumbai 400 099
Tel: +91 22 6772 0300 / 400 / 419 / 422
Fax: +91 22 2850 8927
Email: dishtv@shareproservices.com
Contact Person: Mr. Prakash Khare/Mr. Anand Moolya
Note: Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any preissue/post-issue related problems such as non-receipt of Abridged Letter of Offer/letter of allotment/ share
certificate(s)/ refund orders.
Monitoring Agency
IDBI Bank Limited
SSAD, 14th Floor
Cuffe Parade
Mumbai – 400 049
Tel: +91 22 6655 2081
Fax: +91 22 2215 5742
Email: raj.kumar@idbi.co.in
Contact Person: Mr. Rajeev Kumar
Bankers to the Issue
ICICI Bank Limited
K-1, Senior Mall, Sector-18
Noida 201 301, Uttar Pradesh, India
Tel: : +91 120 405 9893
Fax: +91 120 405 9843
Email: venkataraghavan.t@icicibank.com
Contact Person: Mr. Venkataraghavan T. A.
SEBI Registration No.: INBI00000004
Axis Bank Limited
B2-B3, Sector 16
Nodia 201 301
Uttar Pradesh, India
Tel: : +91 120 427 9586
Fax: +91 120 251 0737
Email: Chandni.garg@axisbank.com
Contact Person: Ms. Chandni Garg
SEBI Registration No.: INBI00000017
270, D.N. Road
Fort, Mumbai 400 001
India
Tel: +91 22 2268 38965
Fax: +91 22 2209 6069
Email: rajesh.malwade@in.standardchartered.com
Contact Person: Mr. Rajesh Malwade
SEBI Registration no.: INBI00000885
Credit rating
This being an issue of Equity Shares, no credit rating is required.
13
CAPITAL STRUCTURE
Aggregate
nominal value
(In Rs. lakhs)
Authorized share capital1
10,000,00,000
equity shares of face value Re. 1 each
Issued, subscribed and paid-up share capital
428,222,803
equity shares of face value Re. 1 each
Present Issue being offered to the shareholders through the Letter of Offer*
51,81,49,592 equity shares of face value Re. 1 each
Paid up Equity Share capital after the Issue*
94,63,72,395 equity shares of face value Re. 1 each
Share Premium Account
Existing share premium account
Share premium account after the Issue
Aggregate
Value at Issue
Price (In Rs.
lakhs)
10,000.00
4,282.23
-
5,181.49
113,992.91
9,463.72
-
Nil
1,08,811.41
1
The equity shares of our Company were split from a face value of Rs. 100 per equity share to Rs.10 per equity
share as per the resolution passed by the shareholders of our Company dated May 31, 1995.
The authorized share capital of our Company was increased from Rs. 1 lakh divided into 1,000 equity shares of
Rs. 100 each to Rs. 5,000 lakhs divided into 500 lakhs equity shares of Rs. 10 each through a resolution of the
shareholders of our Company dated May 31, 1995.
The authorized share capital of our Company was further increased from Rs. 5,000 lakhs divided into 500 lakhs
equity shares of Rs. 10 each to Rs. 7,300 lakhs divided into 730 lakhs equity shares of Rs. 10 each through a
resolution of the shareholders of our Company dated July 30, 2002. The equity shares of our Company were
split from a face value of Rs. 10 per equity share to Re. 1 per equity share as per the resolution of our
shareholders dated September 16, 2006.
The authorized share capital of our Company was further increased from Rs. 7,300 lakhs divided into 7,300
lakhs Equity Shares to Rs. 10,000 lakhs divided into 10,000 lakhs Equity Shares through a resolution of the
shareholders of our Company dated May 29, 2008.
* Comprising 42,82,22,803 fully paid up Equity Shares and 51,81,49,592 partly paid up Equity Shares at the price
of Rs. 6 at the time of application. Further Rs. 8 will become payable, after 3 (three) months but within 9
(nine) months from the date of Allotment, at the option of the Company, and the balance Rs. 8 will become
payable, after 9 (nine) months but within 18 (eighteen) months from the date of Allotment at the option of the
Company.
Notes to the Capital Structure
1.
Build up of Equity Share Capital as on September 30, 2008 is as follows:
Date of
Allotment
August 11,
1988
October 18,
19952
No. of Equity
Shares
Allotted
Face
Value
(Rs.)
Issue Price
per Equity
Shares
(Rs.)
Cumulative
Paid-up
Capital (Rs.)
Consideration
Remarks
20
100
100
2,000
Cash
Subscription on signing
of the Memorandum of
Association.
2,50,000
10
10
25,02,000
Cash
Preferential allotment of
shares made to Churu
Trading
Company
Private Limited, Briggs
Trading
Company
Private Limited, Ganjam
Trading
Company
14
Date of
Allotment
No. of Equity
Shares
Allotted
Face
Value
(Rs.)
Issue Price
per Equity
Shares
(Rs.)
Cumulative
Paid-up
Capital (Rs.)
Consideration
Remarks
Private
Limited,
Prajatma
Trading
Company
Private
Limited, Premier Finance
& Trading Company
Private Limited
Trading
Company
Private Limited
June 2,
2000
85,18,773
10
10
8,76,89,730
Cash
June 2,
2000
12,68,942
10
10
10,03,79,150
Cash
shares made to Premier
Finance and Trading
Company Limited
June 2,
2000
10,50,000
10
10
11,08,79,150
Cash
shares made to Briggs
Trading
Company
Private Limited
June 2,
2000
12,87,000
10
10
12,37,49,150
Cash
shares made to Ganjam
Trading
Company
Private Limited
June 2,
2000
24,75,000
10
10
14,84,99,150
Cash
shares made to Prajatma
Trading
Company
Private Limited
June 2,
2000
1,00,000
10
10
14,94,99,150
Cash
shares made to Ms.
Sushila Goel
June 2,
2000
2,50,000
10
10
15,19,99,150
Cash
shares made to Mr.
Ashok Goel
December
6, 2000
17,75,000
10
10
16,97,49,150
Cash
Trading
Company
Private Limited
December
6, 2000
38,25,000
10
10
20,79,99,150
Cash
shares made to Premier
Finance and Trading
Company Limited
December
6, 2000
45,50,000
10
10
25,34,99,150
Cash
shares made to Ganjam
Trading
Company
Private Limited
December
6, 2000
14,50,000
10
10
26,79,99,150
Cash
shares made to Prajatma
Trading
Company
Private Limited
December
10, 2000
2,00,000
10
10
26,99,99,150
Cash
shares made to Mr.
Subhash Chandra
15
Date of
Allotment
No. of Equity
Shares
Allotted
Face
Value
(Rs.)
Issue Price
per Equity
Shares
(Rs.)
Cumulative
Paid-up
Capital (Rs.)
Consideration
Remarks
December
10, 2000
2,35,300
10
265
27,23,52,150
Cash
shares made to AfroAsian
Satellite
Communications Limited
December
11, 2000
1,38,33,550
10
265
41,06,87,650
Cash
shares made to AfroAsian
Satellite
Communications Limited
August 27,
2002
3,05,00,000
10
10
71,56,87,650
Cash
shares made to Veena
Investment
Private
Limited
April 10,
20073
24,93,00,890
1
-
42,82,22,803
Other than cash
Allotted to shareholders
of ZEEL pursuant to the
Scheme
of
Arrangement.#
Total
42,82,22,803
42,82,22,803
2
The equity shares of our Company were split from a face value of Rs. 100 per equity share to Rs.10 per equity
share as per the resolution of our shareholders dated May 31, 1995.
3
The equity shares of our Company were split from a face value of Rs. 10 per equity share to Re. 1 per equity
share as per the resolution of our shareholders dated September 16, 2006. The Equity Share capital of our
Company was then reduced by way of canceling three Equity Shares for every four Equity Shares through a
resolution of our shareholders of our Company dated September 16, 2006 under the Scheme of Arrangement as
approved by the order of the High Court of Judicature at Delhi by its order dated December 18, 2006 and High
Court of Judicature at Bombay by its order dated January 12, 2007, thereby canceling 53,67,65,737 Equity
Shares. The paid up Equity Share capital post reduction was Rs. 17,89,21,913.
In addition, entire of the Equity Shares, that is 17,89,21,913 Equity Shares, issued prior to the allotment made
under the Scheme of Arrangement are locked in till April 17, 2010, i.e. till a period of three years from date of
listing of these Equity Shares on the Stock Exchange.
# For details of the Scheme of Arrangement, see “History of the Company and Other Corporate Matters” on
page 55.
2.
Build-up of share capital by the Promoters
Name of the
Promoter
Mr. Subhash
Chandra
Date of
No. of equity
Allotment/transfer
shares*
December 10, 2000
April 10, 2007
Total
Mr. Laxmi Narain April 24, 1995
Goel
Face
Value
2,00,000
(15,00,000)
Issue/
Nature of
Nature of
Acquisition Consideration
Transaction
Price per
Equity Share
(Rs.)**
10
10 Cash
Preferential allotment
1
NA Other than
cash
Reduction of ¾ of
share capital as per
Scheme
of
Arrangement
100 Cash
Shares Transferred
from Mr. Ramesh
Kumar
Khanted
(Subscriber to the
Memorandum)
5,00,000
10
100
16
Name of the
Promoter
Mr. Ashok Goel
Date of
No. of equity
Allotment/transfer
shares*
April 10, 2007
(750)
April 10, 2007
10,06,250
Total
10,06,500
April 24, 1995
June 2, 2000
April 10, 2007
Total
Ms. Sushila Goel
Mr. Ashok
Mathai Kurien
Face
Value
Issue/
Nature of
Nature of
Transaction
Price per
Equity Share
(Rs.)**
1
NA NA
Reduction of ¾ of
Scheme
of
Arrangement
1
- Other than
Allotment made as a
cash
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
10
100
100 Cash
Shares
transferred
from Mr. Mahendra
H
Khanted
(Subscriber
to
Memorandum)
2,50,000
10
10 Cash
(18,75,750)
1
- Other than
cash
6,25,250
June 2, 2000
1,00,000
10
April 10, 2007
(7,50,000)
1
- Other than
cash
April 10, 2007
5,34,750
1
- Other than
cash
Total
784,750
1
- Other than
cash
April 10, 2007
Total
Veena Investment August 27, 2002
Private Limited
11,74,150
10 Cash
10
April 10, 2007
(22,87,50,000)
1
- Other than
cash
April 10, 2007
247,825
1
- Other than
cash
1
- Other than
cash
Delgrada Limited April 10, 2007
Reduction of ¾ of
Scheme
Of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
11,74,150
3,05,00,000
Total
Reduction of ¾ of
Scheme
of
Arrangement
10 Cash
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
7,64,97,825
47,169,206
17
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
Name of the
Promoter
Date of
No. of equity
Allotment/transfer
shares*
April 13, 2007 to
April 20, 2007
July 20, 2007 to July
27, 2007
Total
Face
Value
(36,748,913)
(2,30,000)
1,01,90,293
December 10, 2000
2,35,300
Afro-Asian
Satellite
December 11, 2000
1,38,33,550
Communications
Limited
April 10, 2007
(10,55,16,375)
Jayneer Capital
Private Limited
Issue/
Nature of
Nature of
Transaction
Price per
Equity Share
(Rs.)**
1
- Cash
Sold at the secondary
market
1
- Cash
market
10
265 Cash
10
265 Cash
1
- Other than
cash
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
Purchased from the
secondary market
Total
3,51,72,125
April 10, 2007
3,00,99,354
1
- Other than
cash
43,00,000
1
- Cash
April 13, 2007 to
April 20, 2007
Total
Churu Trading October 18, 1995
Company Private June 2, 2000
Limited
December 6, 2000
3,43,99,354
50,000
10
10 Cash
85,18,773
10
10 Cash
17,75,000
10
10 Cash
April 10, 2007
(7,75,78,297)
1
- NA
April 10, 2007
20,56,200
1
- Other than
cash
(10,57,125)
1
- Cash
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
market
50,000
10
10 Cash
12,87,000
10
10 Cash
45,50,000
10
10 Cash
April 10, 2007
(4,41,52,500)
1
- NA
April 10, 2007
3,459,487
1
- Other than
cash
(13,00,000)
1
- Cash
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
market
April 13, 2007 to
April 20, 2007
Total
Ganjam Trading October 18, 1995
Limited
December 6, 2000
2,68,58,508
April 13, 2007 to
April 20, 2007
Total
1,68,76,987
Premier Finance October 18, 1995
& Trading
June 2, 2000
50,000
10
10 Cash
12,68,942
10
10 Cash
18
Name of the
Promoter
Date of
No. of equity
Allotment/transfer
shares*
Company Limited December 6, 2000
(3,85,79,565)
1
- NA
April 10, 2007
35,51,200
1
- Other than
cash
Total
1,64,11,055
10
10 Cash
24,75,000
10
10 Cash
14,50,000
10
10 Cash
April 10, 2007
(2,98,12,500)
1
- Other than
cash
April 10, 2007
43,55,337
1
- Other than
cash
(22,93,962)
1
- Cash
1
- Other than
cash
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
market
1,19,98,875
April 10, 2007
66,12,500
Total
66,12,500
Briggs Trading October 18, 1995
Limited
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
50,000
10
10 Cash
10,50,000
10
10 Cash
April 10, 2007
(82,50,000)
1
- Other than
cash
April 10, 2007
25,59,475
1
- Other than
cash
(13,00,000)
1
- Cash
1
- Other than
cash
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
1
- Other than
Allotment made as a
April 13, 2007 to
April 20, 2007
Total
April 10, 2007
(formerly, Pan
India Paryatan
Total
Limited)
Ambience
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
50,000
April 13, 2007 to
April 20, 2007
Total
Essel
Infraprojects
Limited
38,25,000
Issue/
Nature of
Nature of
Transaction
Price per
Equity Share
(Rs.)**
10
10 Cash
April 10, 2007
Prajatma Trading October 18, 1995
Limited
December 6, 2000
Lazarus
Investments
Limited
Face
Value
April 10, 2007
Reduction of ¾ of
Scheme
of
Arrangement
Allotment made as a
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
market
40,09,475
36,80,000
36,80,000
13,08,125
19
Name of the
Promoter
Date of
No. of equity
Allotment/transfer
shares*
Face
Value
Business Services
Private Limited
Total
3.
Issue/
Nature of
Nature of
Transaction
Price per
Equity Share
(Rs.)**
cash
shareholder of ZEEL
pursuant
to
the
Scheme
of
Arrangement
13,08,125
Current shareholding pattern of the Company as on November 14, 2008 is as follows:
The table below represents the shareholding pattern of our Company:
Description
Category of Shareholder
Shareholding of Promoter and
Promoter Group (A)
Indian
Individuals/Hindu Undivided Family
Pre Issue
Post Issue
Total number
of Equity Shares
Total
Total number Total shareholding as
shareholding as a of Equity
a percentage of total
percentage of total
Shares*
number of Equity
number of Equity
Shares
Shares
35,90,650
0.84
79,35,336
0.84
Nil
19,20,40,204
Nil
44.84
Nil
42,44,08,850
Nil
44.84
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
500,000
0.12
11,05,000
0.12
12.14
11,48,64,568
12.14
Nil
Nil
24,81,05,772
Nil
Nil
57.94
Nil
Nil
54,83,13,756
Nil
Nil
57.94
Institutions (B1)
Mutual Funds/ UTI
1,49,50,832
1,24,31,234
3.49
2.90
3,30,41,339
2,74,73,027
3.49
2.90
Banks
Foreign Institutional Investors
1,55,828
4,25,86,233
0.04
9.94
3,44,380
9,41,15,575
0.04
9.94
0.00
74,872
0.00
Central Government/State Government(s)
Bodies Corporate
Financial Institutions/Banks
Any Other
Foreign
Individuals (Non-Resident
Individuals/Foreign Individuals)
Bodies Corporate**
5,19,74,918
Institutions/FII
Any Other
Total Shareholding of Promoter and
Promoter Group (A)
Public shareholding (B)
Foreign Bodies
33,879
Sub-Total (B)(1)
7,01,58,006
16.38
15,50,49,193
16.38
Non-institutions (B2)
Bodies Corporate
Non Resident
OCBs**
Trust
Individuals
2,92,50,894
28,16,914
18,025
28,937
7,78,44,255
6.83
0.66
0.00
0.00
18.18
6,46,44,475
6.83
0.66
0.00
0.00
18.18
20
62,25,380
39,835
63,951
17,20,50,501
Description
Pre Issue
Category of Shareholder
Post Issue
Total number
of Equity Shares
Sub-Total (B)(2)
Total Public Shareholding (B) =
(B)(1)+(B)(2)
Total
Total number Total shareholding as
shareholding as a of Equity
a percentage of total
percentage of total
Shares*
number of Equity
number of Equity
Shares
Shares
10,99,59,025
25.68 24,30,28,431
25.68
18,01,17,031
42.06
39,80,58,639
42.06
100 94,63,72,395
42,82,22,803
GRAND TOTAL (A)+(B)
* Assuming all Equity Shareholders are issued their total Rights Entitlement pursuant to the Issue.
** OCBs would be allotted Equity Shares only after they obtain prior approval from the RBI. Such approval shall be
submitted along with the CAF
4.
100
Details of shareholding of the Promoters, Promoter Group and Directors of the promoter
companies of the Company as on November 26, 2008
Name of the Shareholder
Total Shares
% of pre issue capital
Promoters
Mr. Subhash Chandra
Mr. Ashok Goel
Ms. Sushila Goel
Delgrada Limited
Essel Infraprojects Limited (formerly, Pan India Paryatan
Limited)
Promoter Group
Directors of Promoter Companies
5,00,000
0.12
10,06,500
0.24
6,25,250
0.15
11,74,150
0.27
7,84,750
0.18
7,64,97,825
17.86
1,01,90,293
2.38
3,51,72,125
8.21
3,43,99,354
8.03
2,68,58,508
6.27
1,68,76,987
3.94
1,64,11,055
3.83
1,19,98,875
2.80
66,12,500
1.54
40,09,475
0.94
36,80,000
0.86
13,08,125
0.31
Nil
Nil
Nil
Nil
5.
Our Promoters, Directors and Group Companies have not purchased or sold any Equity Shares in the
six months preceding the date of filing of this Letter of Offer with SEBI.
6.
Top ten Shareholders
a)
Top ten shareholders as on November 26, 2008:
S.No.
Total number of
Equity Shares
21
% of pre Issue capital
S.No.
Total number of
Equity Shares
1.
7,62,50,000
17.80
2.
3,51,72,125
8.21
3.
3,43,99,354
8.03
4.
2,68,58,508
6.27
5.
1,68,76,987
3.94
6.
1,64,11,055
3.83
7.
Oppenheimer Funds Inc.
1,34,51,061
3.14
8.
Life Insurance Corporation of India
1,23,19,414
2.88
9.
1,19,98,875
2.80
10.
Delgrada Limited
1,01,90,293
2.38
b)
Top ten shareholders as on ten days prior to the filing of the Letter of Offer:
S.No.
Total number of
Equity Shares
1.
7,62,50,000
17.80
2.
3,51,72,125
8.21
3.
3,43,99,354
8.03
4.
2,68,58,508
6.27
5.
1,68,76,987
3.94
6.
1,64,11,055
3.83
7.
Oppenheimer Funds Inc.
1,33,92,861
3.13
8.
Life Insurance Corporation of India
1,23,14,813
2.87
9.
1,19,98,875
2.80
10.
Delgrada Limited
1,01,90,293
2.38
c)
Top ten shareholders two years prior to the filing of the Letter of Offer:
S.No.
No. of Equity
Shares*
% of pre issue capital
1.
30,50,00,000
42.62
2.
14,06,88,500
19.66
3.
10,34,37,730
14.45
4.
588,70,000
8.23
5.
5,14,39,420
7.19
6.
3,97,50,000
5.55
7.
1,10,00,000
1.54
8.
Mr. Ashok Goel
25,01,000
0.35
9.
Mr. Subhash Chandra
20,00,000
0.27
10.
Ms. Sushila Goel
10,00,000
* This shareholding represents the shares helds prior to the Scheme of Arrangement.
0.14
7.
The present issue being a rights issue, as per SEBI Guidelines, the requirement of Promoters’
contribution and lock-in are not applicable.
22
8.
ESOP Scheme:
We have adopted the ESOP Scheme to reward our employees for their past association with the
Company and performance and also to motivate them to contribute to the growth and profitability of
the Company. The grant of options under the ESOP Scheme was approved pursuant to a special
resolution passed by our shareholders at the AGM held on August 3, 2007. The grant of stock options
was approved by the Remuneration Committee at their meeting held on August 21, 2007, April 24,
2008 and August 28, 2008.
The exercise price for the options already granted on August 21, 2007 and April 24, 2008 have been repriced at Rs. 37.55 per Equity Shares by the Remuneration Committee pursuant to the resolution of our
shareholders dated August 28, 2008.
MGB & Co., Chartered Accountants, have, pursuant to their letter dated August 27, 2008, certified the
re-pricing of the exercise price under the ESOP Scheme is in compliance with the SEBI (ESOP &
ESPS) Scheme Guidelines, 1999 and they had also certified that the ESOP Scheme is compliance with
the SEBI (ESOP & ESPS) Scheme Guidelines, 1999 by their letter dated December 27, 2007.
Details of the ESOP Scheme and status as on October 3, 2008 is as follows:
Particulars
Options granted and exercise price of options
Details
Date of grant
August 21, 2007
April 24, 2008
August 28, 2008
Exercise Price/Equity
Share
3,073,050
Rs. 37.55#
184,500
Rs. 37.55#
30,000
Rs. 37.55
32,87,550*
Total number of options granted
Total
options vested
(includes options
exercised)
Options exercised
Options forfeited/ lapsed/ cancelled
Total number of Equity Shares arising as a
result of full exercise of options already
granted
Variations in terms of options
Money realised by exercise of options
Options outstanding (in force)
Pricing Formula/Exercise price
Number of
options granted
Nil
Nil
16,39,700
16,47,850
Nil
Nil
16,47,850
The latest available closing price prior to the date of the meeting of
the Remuneration Committee/ESOP Committee in which the options
are granted/shares are issued (Grant Date) on the Stock Exchanges.
Person wise details of options granted to
i)
Directors
and
key
managerial
employees**
ii)
Any other employee who received a
grant of options amounting to 5% or
more of the total options granted ***
iii)
Identified employees who are granted
options, during any one year equal to
or exceeding 1% of the issued capital
(excluding outstanding warrants and
conversions) of the Company at the
time of grant
Diluted (consolidated) EPS on a pre-Issue basis
As mentioned below**
Nil
None
Rs. (3.09)
23
Particulars
Details
for on the three months period ended June 30,
2008
Difference, if any, between employee
compensation cost (calculated using the intrinsic
value of stock option) and the employee
compensation cost (calculated on the basis of fair
value of options)
Vesting schedule
Nil
For the grant on August 21, 2007: August 21, 2008 to August 20, 2012
For the grant on April 24, 2008 : April 24, 2009 to April 23, 2013
Lock-in Period
Impact on profits and EPS of the last three years
in the Company had followed the accounting
policies
specified in Clause 13 of the ESOP Guidelines
For the grant on August 28, 2008: August 28, 2009 to August 27, 2013
One year from the date of the grant
Nil
# The exercise price of options granted has been repriced to Rs. 37.55 pursuant to the resolution of our
shareholders dated August 28, 2008.
* As per the provisions of the ESOP Scheme, in the event of rights issue of Equity Shares, an option holder
would not be eligible for the bonus or rights shares but an adjustment to the number of options or the exercise
price or both, would be made as decided by the Remuneration Committee.
**Details regarding options granted to our key managerial employees under ESOP Scheme are set forth below:
Name of key managerial personnel
Mr. Amitabh Kumar
Mr. Rajiv Khattar
Mr. Rajeev K Dalmia
Mr. Jagdish Patra
No. of options granted
No. of options
exercised
1,64,700
1,67,950
1,71,100
30,200
No. of options
outstanding
Nil
Nil
Nil
Nil
1,64,700
1,67,950
1,71,100
30,200
***Details regarding options granted to our independent directors under ESOP Scheme are set forth below:
Name of independent directors
Mr. Arun Duggal
Dr. Pritam Singh
No. of options granted
7,500
7,500
7,500
7,500
No. of options
exercised
No. of options
outstanding
Nil
Nil
Nil
Nil
7,500
7,500
7,500
7,500
9.
The Company has not availed any bridge loan which would be repaid from the proceeds of the Issue
10.
The Promoters, Directors and the Lead Manager of the Issue have not entered into buy-back, standby or
similar arrangements for any of the securities being issued through this Letter of Offer.
11.
The terms of issue to Non-Resident Equity Shareholders / Applicants have been presented under the
“Terms of the Issue” on page 340.
12.
At any given time, there shall be only one denomination of the Equity Shares of the Company. The
Equity Shareholders do not hold any warrant, option or convertible loan or debenture, which would
entitle them to acquire further Equity Shares.
13.
Currently, foreign direct investment (“FDI”) can be made in the DTH sector only after prior approval
of the Foreign Investment Promotion Board (“FIPB”). Under the current foreign exchange regulation,
foreign investment in DTH sector is capped at 49% of the total paid up capital, under this limit the FDI
component is capped to not exceed 20%.
24
Our Company has received an approval dated May 26, 2008 from the MIB allowing the change in
capital structure of our capital pursuant to the Issue. Our Company has received an approval dated June
19, 2008 from the FIPB for participation and Allotment to Non Resident Equity Shareholders,
including FIIs, up to their Rights Entitlement and for any additional Equity Shares under the Issue,
subject to the overall sectoral cap as mentioned above.
Our Company has received approval dated July 18, 2008 from the RBI for allowing Non-Residents to
subscribe to partly paid up Equity Shares in the Issue.
14.
Except for issue of Equity Shares arising on the exercise of options granted under our ESOP Scheme,
no further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or public
issue or in any other manner which will affect the Company shall be made during the period
commencing from the filing of the Letter of Offer with the SEBI and date on which the Equity Shares
issued under the Letter of Offer are listed or application moneys are refunded on account of the failure
of the Issue.
15.
Our Company presently does not intend to alter its capital structure for a period of six months from the
date of the opening of the Issue, by way of split or consolidation of the denomination of Equity Shares
or further issue of Equity Shares (including issue of securities convertible into or exchangeable,
directly or indirectly into Equity Shares) whether preferential or otherwise, except issue and allotment
of Equity Shares under ESOP Scheme that may vest and be exercised in the next six months or if our
Company enters into acquisitions or joint ventures or, if the business needs otherwise arise, subject to
necessary approvals consider raising additional capital to fund such activity.
16.
The Issue will remain open for 29 days. However, the Board will have the right to extend the Issue
period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.
17.
Certain of our Promoters namely, Ms. Sushila Devi, Churu Trading Company Private Limited, Ganjam
Trading Company Private Limited, Essel Infraprojects Limited (formerly, Pan India Paryatan Limited),
Briggs Trading Company Private Limited, Prajatma Trading Company Private Limited, Premier
Finance & Trading Company Limited, Veena Investment Private Limited and Jayneer Capital Private
Limited (together hereinafter referred to as “Promoters” in this clause) have confirmed that they intend
to subscribe to the full extent of their entitlement in the Issue. Such Promoters reserve the right to
subscribe to their entitlement in the Issue, including by subscribing for renunciation if any made within
the Promoter Group to another person forming part of the Promoter Group. Such Promoters also intend
to apply for additional Equity Shares in the Issue, such that at least 90% of the Issue is subscribed. As a
result of this subscription and consequent allotment, such Promoters may acquire shares over and
above their entitlement in the Issue, which may result in an increase of the shareholding being above
the current shareholding with the entitlement of Equity Shares under the Issue. This subscription and
acquisition of additional Equity Shares by such Promoters, if any, will not result in change of control of
the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of
the Takeover Code. As such, other than meeting the requirements indicated in the section on “Objects
of the Issue” on page 26 of this Letter of Offer, there is no other intention/purpose for this Issue,
including any intention to delist the Company, even if, as a result of allotments to such Promoters, in
this Issue, such Promoters shareholding in the Company exceeds their current shareholding. Such
Promoters intend to subscribe to such unsubscribed portion as per the relevant provisions of the law.
Allotment to such Promoters of any unsubscribed portion, over and above their entitlement shall be
done in compliance with the Listing Agreement and other applicable laws prevailing at that time
relating to continuous listing requirements.
18.
We have never revalued our assets and have not issued any Equity Shares out of revaluation reserves.
19.
We had 2,59,180 members as on November 14, 2008 and we had 2,53,413 members as on the Record
Date, October 16, 2008.
25
OBJECTS OF THE ISSUE
The objects of the Issue are (a) acquistion of consumer premises equipments; (b) repayment of loan and (c)
general corporate purposes.
The main objects clause of our Memorandum of Association and objects incidental to the main objects enable us
to undertake our existing activities and the activities for which funds are being raised by our Company through
this Issue.
The fund requirement described below is based on the management estimates and is not appraised by any bank
or financial institution. In view of the dynamic nature of the media and entertainment industry, our Company
may have to revise its capital expenditure requirements due to variations in the cost structure, changes in
estimates, exchange rate fluctuations and external factors, which may not be within the control of the
management. This may entail rescheduling or revising the planned capital expenditure for a particular purpose
from its planned expenditure at the discretion of our Company’s management. In case of shortfall in the Net
Proceeds to meet the objects of the Issue described below, we propose to meet the same through internal
accruals and borrowings.
We intend to utilize the proceeds of the Issue after deducting expenses relating to the Issue (“Net Proceeds”)
which is estimated at Rs. 113,121.91 lakhs for the abovementioned objects.
Total fund requirement of the Company
The details for the total fund requirement of the Company and the amount to be spent from the Issue are
mentioned in the table below:
Rs. in lakhs
Particular
Acquistion of consumer premises equipments
Repayment of loans
General corporate purposes
Issue expenses
TOTAL
Amount
79,012.00
30,000.00
4,109.91
871.00
113,992.91
In case of any variation in the actual utilization of funds earmarked for the objects mentioned above, increased
fund deployment for a particular activity will be financed through additional debt. If there is any surplus from
the Net Proceeds after meeting all the above mentioned objects, such surplus proceeds will be used for general
corporate purposes.
We intend to use the Net Proceeds of the Issue to finance our objects of the Issue.
Details of Objects
1.
Acquistion of consumer premises equipments
We operate in a capital intensive industry wherein significant cost is required to be incurred on customer
acquisition by way of providing CPEs. With a view to participate in the increase of the customer base in DTH
segment, our management intends to use proceeds of this Issue towards purchase of CPEs which will enable us
to enlarge our subscriber base. We intend to add 28 lakh new subscribers over the next two Fiscal Years and
therefore would be required to purchase additional consumer premise and other equipments from local and
external suppliers. We intend to utilise Rs. 79,012 lakhs out of the Net Proceeds to add such number of new
subscribers so as to meet our target of 28 lakh new subscribers.
Consumer premise equipments are the equipments which are installed at the premises of the subscriber to enable
receipt of signals from satellite and other services from our earth station. Such equipments include Set Top
Boxes (STBs), Low Noise Block (LNB), dish-antenna, wire and other miscellaneous equipments. Some of these
equipments are sourced from our Subsidiaries.
Schedule of funds deployment
26
The proposed schedule of deployment funds from the Net Proceeds of the Issue is as per the table below:
(Rs.in lakhs)
Consumer Premise Equipments
Fiscal 2009
Amount
Deployed till
October 31,
2008*
Set top boxes
13,688.00
9,449.29
Low Noise Block
979.20
730.97
Wire
897.60
178.90
Dish Antenna
4,096.70
2,625.65
Miscellaneous equipments
3,264.00
891.30
Total
22,905.50
13,876.11
* As per certificate dated November 14, 2008 issued by Gulshan Khandelwal, Chartered Accountants
Fiscal 2010
26,542.07
1,963.52
1,235.98
7,718.26
4,770.90
42,230.73
All the expenses made by the Company on any of the above-mentioned objects in Fiscal 2009 pending
utilization of Net Proceeds of the Issue would be reimbursed from the Net Proceeds of the Issue.
We have received the following quotes from various suppliers for estimated supplies of CPEs over next 2 Fiscal
Years for 28 lakhs units:
Item description
Set top boxes
Low Noise Block
Wire
Dish Antenna
Name of Supplier
Handen
Wiston NeWeb Corp.
CommScope Asia
(Suzhou) Technologies
Co.
SVH Enterprises
Date of available
quotations
September 30, 2008
September 30, 2008
September 30, 2008
Amount per unit*
(Rs.)
1,574.50
105.75
67.78
September 30, 2008
362
* The quotes in US Dollars have been converted in Rupees by using conversion rate of Rs. 47 per US Dollar
In addition to the above, we are also required to pay import duties, port and freight charges for importing the
above-mentioned products from external suppliers.
2.
Repayment of Loan
The Company has entered into Inter Corporate Deposit Agreements dated March 27, 2008, April 2, 2008 and
April 10, 2008 (“ICD Agreements”) with Churu Trading Company Private Limited, one of the Promoters, for
inter-corporate deposits of Rs. 29,000 lakhs, Rs. 3,000 lakhs and Rs. 200 lakhs, respectively, to the Company at
an interest of 12% per annum. As per the terms of the ICD Agreements, the Company has to repay the intercorporate deposit amount of Rs. 32,200 lakhs along with the interest on demand from Churu Trading Company
Private Limited. Further, Churu Trading Company Private Limited has the right to recall the inter-corporate
deposit of Rs. 29,000 lakhs for reasons of its business or liquidity by providing a seven days notice to the
Company. In such an event the Company would be liable to pay interest at the rate which is equal to the State
Bank of India Deposit Rate for the corresponding period. In the event of default, the Company is liable to pay an
interest of 24% per month to be compounded montly from the date of the default. The Company is also liable to
indemnify Churu Trading Company Private Limited against the losses, costs, charges and expenses which it
may face in realization of the dues of the inter-corporate deposit from the Company.
As per the terms of the ICD Agreements, the entire principal amount or any balance amount outstanding at any
point of time would become payable by the Company on the happening of any of the following events:
a)
Any installment of principal and/or interest as agreed hereinabove remains unpaid after expiry of seven
days from the respective due dates of payment;
b)
Any representation and/or statement of the Company’s proposal being found incorrect or the Company
committing any breach or default in the performance and/or observance of any terms and conditions or
provision contained in the ICD Agreements or any other terms and conditions relating to the loan;
c)
The Company entering into any arrangement or composition with its other creditors or committing any
act, the consequence of which may lead to the winding up of the Company;
27
d)
Execution or distress or other process being enforced or levied upon against the whole or any part of
the Company’s assets or properties;
e)
Any order being made or a resolution being passed for winding up of the Company, except for the
purposes of amalgamation/ reconstruction with the approval of Churu Trading Company Private
Limited; and
f)
A receiver being appointed in respect of the whole or any part of the assets or properties of the
Company .
The amount outstanding towards inter-corporate deposits from Churu Trading Company Private Limited is Rs.
30,100 Lakhs, as certified by letter dated November 14, 2008, issued by Gulshan Khandelwal, Chartered
Accountants. For details regarding the letter issued by Gulshan Khandelwal, Chartered Accountants, see
“Material Contracts and Documents for Inspection” on page 372. The Company intends to utilize the proceeds
of the Issue upto Rs 30,000 lakhs towards repayment of such loans taken from Churu Trading Company Private
Limited.
3.
General Corporate Purposes
In accordance with the policies set up by the Board, the Company proposes to retain flexibility in using the
remaining Net Proceeds for general corporate purposes, including strengthening of our marketing capabilities
and brand building exercises. In accordance with the policies of the Board, the management of the Company
will have flexibility in utilizing Issue proceeds earmarked for general corporate purposes.
The fund requirements and intended use of the Net Proceeds as described therein are based on the management
estimates. Our management, in response to the competitive and dynamic nature of the industry, may require
revising its expenditure plan, fund requirements and external factors which may be beyond the control of our
management. Such decisions will be taken by our Board. In case of variations in the actual utilization of funds
earmarked for the purposes set forth, increased fund requirements for a particular purpose may be financed by
surplus funds, if available, for other purposes as indicated below. If surplus funds are unavailable, the required
financing will be through our internal accruals and/or debt.
Issue Related Expenses
The Issue related expenses among others include, lead management and selling commission, printing and
distribution expenses, legal fees, advertisement expenses and registrar, depository fees and other fees. The
estimated Issue expenses are as follows:
Activity
Expense (Rs.
in lakhs)
Fees to Lead Manager, Registrar, Bankers, Legal Advisors,
Monitoring Agency and other Professional Services.
Advertising, Travelling and Marketing expenses
Printing, stationery and postage
Total estimated Issue expenses
% of Issue
size
% of Issue
expenses
709.00
0.62
81.40
40.00
0.04
4.59
122.00
0.11
14.01
871.00
0.76
100.00
Interim Use of Proceeds
The management of our Company, in accordance with the policies established by our Board from time to time,
will have flexibility to deploy the Net Proceeds. Pending utilization for the purposes described above, our
Company intends to invest the funds in quality interest bearing liquid instruments including money market
mutual funds and deposits with banks, for the necessary duration. Such investments would be in accordance
with investment policies approved by our Board from time to time. The Company confirms that pending
utilization of the Issue proceeds; it shall not use the net proceeds for investments in the equity markets.
Bridge Loan
28
We have not raised any bridge loan from any bank or financial institution for any amount as at the date of this
Letter of Offer.
Monitoring of Utilization of Funds
In terms of Clause 8.17 of the SEBI Guidelines, the Company has appointed Industrial Development Bank of
India as the monitoring agency. The Monitoring Agency along with our Board will monitor the utilization of the
proceeds of the Issue.
Our Board
We will disclose the details of the utilization of the Net Proceeds, including interim use, under a separate head in
our financial statements specifying the purpose for which such proceeds have been utilized or otherwise
disclosed as per the disclosure requirements of our listing agreements with the Stock Exchanges, and in
particular clauses 43A and 49 of the listing agreement.
In compliance with the SEBI Guidelines, until the proceeds of the Issue have been entirely utilized, the
monitoring agency shall file a monitoring report with our Company on a half yearly basis. The report together
with the management’s comments thereon shall be placed by our Company before the Audit Committee. The
Company shall disclose to the Audit Committee, the uses and application of funds under the heads as specified
above, on a quarterly basis as a part of the quarterly declaration of financial results. Further, on an annual basis,
the Company shall prepare a statement of funds utilized for purposes other than those stated above, if any, and
place it before the Audit Committee. Such disclosure shall be made only until such time that the full money
raised through the Issue has not been fully spent. This statement shall be certified by the statutory auditors of the
Company. The Audit Committee shall make appropriate recommendations to the Board to take up steps in this
matter.
We may utilize upto Rs. 30,000 lakhs from the Net Proceeds of the Issue for repayment of existing loans from
Churu Trading Company Private Limited (a Promoter), other than as aforementioned no part of the Net
Proceeds of the Issue will be paid by the Company as consideration to the Promoters, the Directors, the
Company’s key management personnel or companies promoted by the Promoters.
29
BASIS FOR ISSUE PRICE
Investors should also refer to the section “Risk Factors” on page ix and “Financial Statements” on page 104 to
get a more informed view before making the investment decision. The price per share has been provided for Re.
1 per share face value.
The Issue Price has been determined by us, in consultation with the Lead Managers on the basis of the market
sentiments prevailing around the pricing date. The face value of the Equity Shares is Rs. 1 and the Issue Price is
22 times of the face value.
Qualitative Factors
First mover advantage on account of being the first DTH service provider in India with 60% market
share in the DTH market;
Geographically spread customer base - Maharashtra, Gujarat and Karnataka contribute approx. 30% to
the subscriber base;
Distribution and customer service network of 675 distributors and approx. 38,000 dealers (dealership
presence in 6,500 towns);
Infrastructure capacity of 9 transponders on the NSS6 Satellite, where each transponder can host more
than 15 channels; and
Technology partnerships with following software providers:
–
Open TV for middle ware;
–
CONAX for encryption and authentication;
–
SCOPUS for compression systems;
–
HARRIS for automation and broadcasting software.
•
•
•
•
•
Quantitative Factors
Information presented in this section is derived from our Company’s restated financial statements prepared in
accordance with Indian GAAP. Some of the quantitative factors, which form the basis for computing the price,
are as follows:
1.
Earning Per Equity Share
EPS (Rs.)
Year
For year ended March 31, 2006
Weighted Average
Unconsolidated
(1.23)
(5.75)
(9.59)
(6.92)
Consolidated
(1.34)
(5.81)
(9.58)
(6.95)
Weight
1
2
3
Note: The equity shares of our Company were split from a face value of Rs. 10 per equity share to Re. 1 per
equity share as per the resolution of our shareholders dated September 16, 2006. The Equity Share
capital of our Company was then reduced by way of cancelling three Equity Shares for every four Equity
Shares through a resolution of our shareholders of our Company dated September 16, 2006 under the
Scheme of Arrangement as approved by the High Court of Judicature at Delhi by its order dated
December 18, 2006 and High Court of Judicature at Bombay by its order dated January 12, 2007,
thereby cancelling 536,765,737 Equity Shares.
Explanation
a)
c)
The adjusted EPS has been computed on the basis of the adjusted profits and losses of the respective
years drawn after considering the impact of accounting policy changes and material adjustments, prior
period items pertaining to the earlier years and dividend on preference shares.
The denominator considered for the purpose of calculating adjusted EPS is the weighted average
number of Equity Shares outstanding during the year.
The computation of EPS is in accordance with AS 20.
2.
Price / Earning (P/E) ratio in relation to the Issue Price of Rs. 22
b)
30
Particulars
1. Based on Adjusted EPS
2. Based on Weighted average EPS
3. Industry P/E (NA)
Unconsolidated
NA
NA
Consolidated
NA
NA
Note: As our company has negative EPS for last 3 Financial Years, P/E ratio cannot be calculated for those
years. Also, currently there are no listed peers for our company in the Indian stock market.
3.
RoNW
Year
RONW %
Weighted Average
Unconsolidated
(86.46)%
NA*
NA*
-
Weight
Consolidated
(112.89)%
NA*
NA*
-
1
2
3
* As the networth of our company was negative as on March 31, 2008 and March 31, 2007, and has incured
losses for year ended March 31, 2008, and March 31, 2007 the RoNW ratio cannot be calculated for the same
period.
4.
Net asset value per share after Issue and comparison with Issue Price:
Particulars
NAV (Rs.)
Unconsolidated
(10.75)
7.18
22
As at March 31, 2008
After the Issue
Issue Price
Consolidated
(11.18)
6.99
22
Net asset value per equity share has been calculated as net worth, as restated, at the end of the year divided by
number of equity shares outstanding at the end of the year / period
5.
Comparison with other listed companies
Face Value
(Rs.)
Dish TV India Limited (As on March 31,
2008) (consolidated)
PEER GROUP
Currently there are no listed peers in the
Indian stock market for our company
EPS (Rs)
P/E Ratio
NA
RoNW
(%)
NA
Book Value
(Rs.)
(11.18)
1
(9.58)
-
-
-
-
-
On the basis of the above qualitative and quantitative parameters, the Lead Managers and the Company are of
the opinion that the Issue Price of Rs. 22 per Equity Share is justified. For more information, see “Risk Factors”
on page ix and the financials of our Company including profitability and return ratios, as set out in the auditors
report on page 104, for a more informed view.
31
STATEMENT OF TAX BENEFITS
To,
The Board of Directors,
Dish TV India Ltd
FC - 19,
Sector 16 A, Film City,
Noida, 201 301
Uttar Pradesh.
Dear Sirs,
We hereby report that the attached Annexure states the possible tax benefits available to Dish TV India Limited
(‘the Company’) and to the shareholders of the Company under the Income tax Act, 1961, Wealth Tax Act,
1957 and the Gift Tax Act, 1958, presently in force in India, subject to the fact that several of these benefits are
dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws.
Hence the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such
conditions, which based on the business imperatives, the Company may or may not choose to fulfill.
The benefits discussed in the Annexure are not exhaustive. This statement is only intended to provide general
information to the investors and is neither designed nor intended to be a substitute for the professional tax
advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is
advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their
participation in the issue.
We do not express any opinion or provide any assurance as to whether:
The Company or its shareholders will continue to obtain these benefits in future; or
The conditions prescribed for availing of these benefits have been / would be met with.
The contents of this Annexure are based on the information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the Company and
interpretations of the current tax laws.
Jeenendra Bhandari
Partner
M No. 105077
For and on behalf of
MGB & Co
Chartered Accountants
Place: Mumbai
April 25, 2008
32
ANNEXURE TO THE STATEMENT OF TAX BENEFITS
I.
SPECIAL TAX BENEFITS
A.
Special Tax Benefits Available to the Company
There are no special tax benefits available to the Company.
B.
Special Tax Benefits Available to the Shareholders of the Company
There are no special tax benefits available to the shareholders of the Company.
II.
GENERAL TAX BENEFITS
Under the Income Tax Act, 1961 (“the Act”)
The following tax benefits shall inter alia, be available to the Company and the prospective shareholders under
Direct Tax Laws.
A.
General Benefits Available to the Company
1.
Subject to compliance of certain conditions laid down in Section 32 of the Income Tax Act 1961,
(hereinafter referred to as Act) the Company will be entitled to a deduction for depreciation:-
2.
a)
In respect of tangible assets
b)
In respect of intangible assets being in the nature of know how, patents, copyrights,
trademarks, licenses, franchises or any other business or commercial rights of similar nature
acquired after 31st day of March, 1998 at the rates prescribed under Income Tax Rules, 1962;
c)
In respect of any new machinery or plant (other then ships and aircraft) which has been
acquired and installed after 31st March, 2005, a further sum of 20% of the actual cost of such
machinery or plant will be allowed as a deduction.
Subject to compliance of certain conditions laid down in Section 35 (1) (iv) of the Act, the Company is
entitled to claim as deduction the whole of capital expenditure, other than the expenditure incurred on
the acquisition of any land, incurred on scientific research related to the business of the Company.
As proposed by the Finance Bill 2008, the Company shall be eligible for a weighted deduction of 1.25
times of any sum paid to a company to be used by it for scientific purpose, subject to fulfillment of the
conditions provided in the proposed Section 35(1)(iia) of the Act.
3.
As proposed by the Finance Bill 2008, under Section 35D of the Act, the Company is eligible for
deduction in respect of specified preliminary expenditure incurred by the Company in connection with
extension of its undertaking or in connection with setting up a new Industrial unit for an amount equal
to 1/5th of such expenses over 5 successive Assessment Years, subject to the conditions and limits
specified in the section.
4.
Minimum Alternate Tax (MAT) is a minimum tax which a company needs to pay when it makes
profits credit allowable is the difference between MAT paid and the tax computed as per the normal
provisions of the Act and can be utilized in those years in which tax becomes payable under the normal
provisions of the Act. MAT credit can be utilised to the extent of difference between any tax payable
under the normal provisions and MAT payable for the relevant year. However, MAT credit cannot be
carried forward and set off beyond 7 years immediately succeeding the assessment year in which it
becomes allowable to be carried forward.
B.
General Benefits Available to Company and Resident Members
1.
Under section 10(34) of the Act, income earned by way of dividend from domestic company referred to
in section 115O of the Act is exempt from income-tax in the hands of the shareholders. However,
33
Section 94(7) of the Act provides that the losses arising on account of sale/transfer of shares purchased
up to three months prior to the record date and sold within three months after such date will be
disallowed to the extent of dividend on such shares are claimed as tax exempt by the shareholder.
2.
Credit for Dividend Distribution Tax (‘DDT’) paid by a subsidiary company
The Finance Bill 2008 has proposed to amend Section 115-O of the Act to provide that, in order to
compute the DDT payable by a domestic holding company, the amount of dividend paid by it would be
reduced by the dividend received by it from its subsidiary company during the financial year, if:
• The subsidiary company has paid DDT on such dividend; and
• The domestic company is itself not a subsidiary of any company.
For this purpose, a company would be considered as a subsidiary if the domestic company holds more
than half its nominal equity capital.
3.
Under section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a
long term capital asset being an equity share in the company or unit of an equity oriented Mutual fund
(i.e. capital asset held for the period of twelve months or more) entered into in a recognized stock
exchange in India after October 1, 2004 on which securities transaction tax has been paid is exempt.
However, from Financial Year 2006-2007, income by way of long-term capital gain of a company shall
be taken into account in computing the book profit and income-tax payable under section 115JB of the
Act.
4.
In terms of Section 88E of the Act, the securities transaction tax paid by the shareholder in respect of
the taxable securities transactions entered into in the course of the business would be eligible for rebate
from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under
Business or Profession’ arising from taxable securities transactions subject to certain limit specified in
the section. As such, no deduction will be allowed in computing the income chargeable to tax as
“capital gains” or under the head “Profits and gains of Business or Profession” for such amount paid on
account of STT.
The Finance Bill 2008 has proposed to introduce new Section 36(i)(xv) to allow for deduction of STT
paid, if the taxable securities transactions are taxable as ‘Business Income’ instead of the rebate
hitherto allowable under Section 88E.
5.
Under section 48 of the Act, if the investments in shares are sold after being held for not less than
twelve months, the gains [in cases not covered under section 10(38) of the Act], if any, will be treated
as long-term capital gains and the gains shall be calculated by deducting from the gross consideration,
the indexed cost of acquisition.
6.
Under section 54EC of the Act and subject to the conditions and to the extent specified therein, long
term capital gains [not covered under the section 10(38) of the Act] arising on the transfer of shares of
the Company will be exempt from capital gains tax if the capital gain are invested within a period of 6
months from the date of transfer in the bonds issued by –
National Highways Authority of India constituted under Section 3 of National Highways
Authority of India Act, 1988; on or after the 1st day of April, 2006
Rural Electrification Corporation Limited, a company formed and registered under the
Companies Act, 1956 on or after the 1st day of April, 2006
If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. The
amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or
converted within three years from the date of their acquisition. However, as per 1st Proviso to Section
54EC(1), the investments made in the Long Term Specified Asset on or after April 1, 2007 by any
assessee during the financial year should not exceed 50 Lakhs rupees.
7.
Under Section 54F of the Act and subject to the conditions and to the extent specified therein, long
term capital gains [in cases not covered under section 10(38) of the Act] arising to an individual or
Hindu Undivided Family (HUF) on transfer of shares of the Company will be exempt from capital
34
gains tax subject to other conditions, if the net sales consideration from such shares are used for
purchase of residential house property within a period of one year before or two year after the date on
which the transfer took place or for construction of residential house property within a period of three
years after the date of transfer.
8.
Under section 111A of the Act, capital gains arising to a shareholder from transfer of short terms
capital assets, being an equity share in the company or unit of an equity oriented Mutual fund, entered
into in a recognized stock exchange in India on which securities transaction tax has been paid will be
subject to tax at the rate of 10% (plus applicable surcharge and educational cess on income-tax).
The Finance Bill 2008 has proposed to increase the tax rate on aforesaid Short Term Capital Gains
from 10% to 15% (plus applicable surcharge and education cess).
9.
Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains [not
covered under section 10(38) of the Act] arising on transfer of shares in the Company, if shares are
held for a period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable surcharge and
educational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at
10% (plus applicable surcharge and educational cess on income-tax) (without indexation), at the option
of the Shareholders.
10.
Unabsorbed depreciation if any, for an Assessment Year (AY) can be carried forward & set off against
any source of income in subsequent AYs as per section 32 (2) subject to the provisions of sub-section
(2) of section 72 and sub-section (3) of section 73 of the Act. Business losses if any, for any AY can be
carried forward and set off against business profits for eight subsequent AYs.
11.
Short-term capital loss on sale of shares can be set off against any capital gain income, long term or
short term, in the same assessment year. It should be noted that such loss can be set off only against
capital gain income and not against any other head of income. Balance short-term capital loss, if any,
can be carried forward up to eight assessments years. In the subsequent years also, it can be set off
against any capital-gain income.
C.
General Benefits Available to Non Resident Indians/ Members other than FIIs and Foreign
Venture Capital Investors
1.
By virtue of Section 10(34) of the Act, income earned by way of dividend income from another
domestic company referred to in section 115O of the Act, is exempt from tax in the hands of the
recipients.
2.
Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a
long term capital asset being an equity share in the company or unit of an equity oriented mutual fund
exchange in India and being such a transaction, which is chargeable to Securities Transaction Tax, shall
be exempt from tax.
However, from Financial Year 2006-2007, income by way of long-term capital gain of a company shall
be taken into account in computing the book profit and income-tax payable under section 115JB of the
Act.
3.
Tax on income from investment and Long Term Capital Gains:
A non-resident Indian (i.e. an individual being a citizen of India or person of Indian Origin)
has an option to be governed by the provisions of Chapter XIIA of the Act viz. “Special
Provisions Relating to certain Incomes of Non-Residents”.
Under section 115E of the Act, capital gains arising to the non resident on transfer of shares
held for a period exceeding 12 months shall [in cases not covered under section 10(38) of the
Act] be concessionally taxed at a flat rate of 10% (plus applicable surcharge and educational
cess on Income-tax) without indexation benefit but with protection against foreign exchange
fluctuation under the first proviso to section 48 of the Act.
35
4.
Capital gain on transfer of Foreign Exchange Assets, not to be charged in certain cases
5.
Return of income not to be filed in certain cases
6.
Under provisions of section 115F of the Act, long term capital gains [not covered under
section 10(38) of the Act] arising to a non-resident Indian from the transfer of shares of the
company subscribed to in convertible Foreign Exchange shall be exempt from income tax if
the net consideration is reinvested in specified assets within six months of the date of transfer.
If only part of the net consideration is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified
assets are transferred or converted within three years from the date of their acquisition.
Under provisions of section 115-G of the Act, it shall not be necessary for a non-resident
Indian to furnish his return of income if his only source of income is investment income or
long term capital gains or both arising out of assets acquired, purchased or subscribed in
convertible foreign exchange and tax deductible at source has been deducted therefrom
Other provisions
Under section 115-I of the Act, a non resident Indian may elect not to be governed by the
provisions of Chapter XII-A for any assessment year by furnishing his return of income under
section 139 of the Act declaring therein that the provisions of the Chapter shall not apply to
him for that assessment year and if he does so the provisions of this Chapter shall not apply to
him, instead the other provisions of the Act shall apply.
Under the first proviso to section 48 of the Act, in case of a non resident, in computing the
capital gains arising from transfer of shares of the company acquired in convertible foreign
exchange (as per exchange control regulations), protection is provided from fluctuations in the
value of rupee in terms of foreign currency in which the original investment was made. Cost
indexation benefits will not be available in such a case.
Under section 54EC of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under section 10(38) of the Act] arising on the
transfer of shares of the company will be exempt from capital gains tax if the capital gains are
invested within a period of 6 months from the date of transfer, in the bonds issued on or after
the 1st day of April, 2006 by –
o
National Highways Authority of India constituted under Section 3 of National
Highways Authority of India Act, 1988;
o
Rural Electrification Corporation Limited, a company formed and registered under
the Companies Act, 1956;
If only part of the capital gain is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified
assets are transferred or converted within three years from the date of their acquisition.
However, in terms of Union Budget 2007-08 investments in the specified assets by an
assessee during any Financial Year should not exceed 50 lakhs rupees.
Under section 54F of the Act and subject to the conditions and to the extent specified therein,
long term capital gains [in cases not covered under section 10(38) of the Act] arising to an
individual or Hindu Undivided Family (HUF) on transfer of shares of the company will be
exempt from capital gains tax subject to other conditions, if the sale proceeds from such shares
are used for purchase of residential house property within a period of one year before or two
year after the date on which the transfer took place or for construction of residential house
property within a period of three years after the date of transfer.
Under section 112 of the Act and other relevant provisions of the Act, long term capital gains
[not covered under section 10(38) of the Act] arising on transfer of shares in the company, if
shares are held for a period exceeding 12 months shall be taxed at a rate of 20% (plus
36
applicable surcharge) after indexation as provided in the second proviso to section 48.
However, indexation will not be available if the investment is made in foreign currency as per
the first proviso to section 48 stated above, or it can be taxed at 10% (plus applicable
surcharge and the education cess on income-tax) (without indexation), at the option of
assessee.
Under Section 111A of the Act, capital gains arising to a shareholder from transfer of short
terms capital assets, being an equity share in the company or unit of an equity oriented Mutual
fund, entered into in a recognized stock exchange in India on which securities transaction tax
has been paid will be subject to tax at the rate of 10% (plus applicable surcharge and the
education cess on income-tax).
The Finance Bill 2008 has proposed to increase the tax rate on aforesaid Short Term Capital
Gains from 10% to 15% (plus applicable surcharge and education cess).
D.
General Benefits Available to Foreign Institutional Investors (FIIs)
1.
By virtue of section 10(34) of the Act, income earned by way of dividend income from another
domestic company referred to in section 115O of the Act, are exempt from tax in the hands of the
institutional investor.
2.
Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a
long term capital asset being an equity share in the company or unit of an equity oriented mutual fund
exchange in India and being such a transaction, which is chargeable to Securities Transaction Tax, shall
be exempt from tax.
However from Financial Year 2006-2007, that income by way of long-term capital gain of a company
shall be taken into account in computing the book profit and income-tax payable under section 115JB
of the Act.
3.
The income realized by FIIs on sale of shares in the company by way of short term capital gains
referred to in Section 111A of the Act would be taxed at the rate of 10% (plus applicable surcharge and
education cess on income-tax) as per section 115AD of the Act.
The Finance Bill 2008 has proposed to increase the tax rate on aforesaid short term capital gains from
10% to 15% (plus applicable surcharge and education cess).
4.
The income by way of short term capital gains (not referred to in section111A) or long term capital
gains [not covered under section 10(38) of the Act] realized by FIIs on sale of shares in the company
would be taxed at the following rates as per section 115AD of the Act.
Short term capital gains – 30% (plus applicable surcharge and education cess on income tax)
Long term capital gains – 10% (plus applicable surcharge and education cess on income-tax) without
cost indexation.
(Shares held in a company would be considered as a long term capital asset provided they are held for a
period exceeding 12 months).
5.
Under section 54EC of the Act and subject to the conditions and to the extent specified therein,long
term capital gains [not covered under section 10(38) of the Act] arising on the transfer of shares of the
company will be exempt from capital gains tax if the capital gains are invested within a period of 6
months after the date of such transfer for a period of 3 years in the bonds issued on or after the 1st day
of April, 2006 by –
National Highways Authority of India constituted under Section National Bank for
Agriculture and Rural Development established under 3 of National Highways Authority of
India Act, 1988;
37
Rural Electrification Corporation Limited, a company formed and registered under the
Companies Act, 1956;
If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. The
amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or
converted within three years from the date of their acquisition. However, in terms of Union Budget
2007-08 investments in the specified assets by an assessee during any Financial Year should not exceed
50 lakhs rupees.
6.
In terms of Section 88E of the Act, the securities transaction tax paid by the shareholder in respect of
the taxable securities transactions entered into in the course of the business would be eligible for rebate
from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under
Business or Profession’ arising from taxable securities transactions.
The Finance Bill 2008 has proposed to introduce new Section 36(i)(xv) to allow for deduction of STT
paid, if the taxable securities transactions are taxable as ‘Business Income’ instead of the rebate
hitherto allowable under Section 88E.
E.
Benefits available to Mutual Funds
As per section 10(23D) of the Act, any income, including income from investment in the shares of the
company, of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or
Regulations made thereunder, Mutual Funds set up by public sector banks or public financial
institutions and Mutual Funds authorised by the Reserve Bank of India will be exempt from income
tax, subject to such conditions as the Central Government may by notification in the Official Gazette,
specify in this behalf.
Under The Wealth Tax Act, 1957
Shares of the company held by the shareholder will not be treated as an asset within the meaning of section
2(ea) of Wealth-tax Act, 1957, hence Wealth-tax Act will not be applicable.
Under The Gift Tax Act, 1958
Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares will
not attract gift tax.
Notes
1.
All the above benefits are as per the current tax law and will be available only to the sole/ first named
holder in case the shares are held by joint holders.
2.
The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary
manner only and is not a complete analysis or listing of all potential tax consequences of the purchase,
ownership and disposal of shares.
3.
In respect of non-residents and foreign companies, the tax rates and consequent taxation mentioned
above will be further subject to any benefits available under the Tax Treaty, if any, between India and
the country in which the non-resident has fiscal domicile. As per the provisions of section 90(2) of the
Act, the provisions of the Act would prevail over the provisions of the Tax Treaty to the extent they are
more beneficial to the non-resident. In case the non resident has fiscal domicile in a country with which
no Tax Treaty exists, then due relief under Section 91 of the Act may, in given circumstances, be
available.
4.
Our views expressed herein are based on the facts and assumptions indicated by the Company. No
assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our
views are based on the existing provisions of law and its interpretation, which are subject to change
from time to time. We do not assume responsibility to update the views consequent to such changes.
The views are exclusively for the use of the Company. We shall not be liable to the Company for any
claims, liabilities or expenses relating to this assignment except to the extent of fees relating to this
38
assignment, as finally judicially determined to have resulted primarily from bad faith or intentional
misconduct. We will not be liable to any other person in respect of this statement.
39
INDUSTRY OVERVIEW
We believe industry, market and government data used in this Letter of Offer is reliable and that the data used
from the industry report is as current as practicable, and has not been independently verified.
This section has been prepared by taking the subject matter and the data points from “The Indian Entertainment
& Media Industry – Sustaining Growth, Report 2008” (FICCI – PWC report March 2008) prepared by
PricewaterhouseCoppers (PWC) and FICCI. With respect to this section that has been referenced from the
report, please note that: While due care has been taken to ensure accuracy of the information contained in the
report, no warranty, express or implied, is being made, or will be made, by FICCI and PWC. No part of this
report may be published or reproduced in any form without FICCI and PWC’s prior written approval. FICCI
and PWC are not liable for investment decisions which may be based on the views expressed in the report.
The Entertainment and Media (E&M) Industry
•
•
•
In 2007, the E&M industry recorded a growth of 17% over the previous year. The industry reached an
estimated size of Rs. 513 billion in 2007, up from Rs. 438 billion in 2006. In the last four years 20042007, the industry recorded a cumulative growth of 19% on an overall basis.
Television industry was the other industry which recorded a growth higher than the overall growth of
the industry in 2007, having recorded a growth of 18% over the previous year and is estimated at Rs.
226 billion in 2007, up from Rs. 191 billion in 2006. In the last four years 2004-2007, the television
industry recorded the third-highest cumulative growth of 21% on an overall basis after online
advertising and radio.
Foreign investments in the E&M sector reached a record high of USD 211 million, approximately Rs.
8.5 billion in 2007. This was seen as result of the extremely high number of investment deals
announced in 2006 and the years before. However, as compared to the overall receipts of foreign
investment in the country, these receipts were a mere 1.5% of the total receipts in 2007.
Rs. billion
Television
% Change
Filmed Entertainment
% Change
Print Media
% Change
Radio
% Change
Music
% Change
Animation, Gaming & VFX
% Change
Out-of-home advertising
% Change
Online advertising
% Change
Total E&M Industry
% Change
2004
128.7
59.9
97.8
2.4
6.7
8.5
0.6
304.6
2005
158.5
23%
68.1
14%
109.5
12%
3.2
33%
7
4%
-
2006
191.2
21%
84.5
24%
128
17%
5
56%
7.2
3%
10.5
9
6%
1
67%
356.3
17%
10
11%
1.6
60%
438
23%
2007e
225.9
18%
96
14%
149
16%
6.2
24%
7.3
1%
13
24%
12.5
25%
2.7
69%
512.6
17%
CAGR 2004-07
19%
14%
15%
37%
3%
14%
65%
19%
Source: FICCI – PWC report March 2008
Key Trends in Media Consumption - 2007
•
Growth in media audience as per the data released in IRS 2007, in the last four years, India’s
population has grown by 92 million individuals i.e. a growth of 12.5%. Of this, the media audience has
increased by 86 million individuals i.e. a growth of 18.4%. High growth in television- cable and
satellite subscribers is driving the growth in media audience as per the research carried out. This clearly
indicates positive implications for the current as well as potential players in the television distribution
industry.
40
Rural is the new urban as per IRS 2007, the country is witnessing higher growth in literacy rates, better
growth in females working and moving towards smaller household sizes. Further, rapid urbanization is
concurrently escalating the working population along with growth in the extreme ends of the strataSEC A as well as Sec E.
The cumulative effect of the above factors has put the DTH market on a high-growth trajectory.
•
•
Media Audience Reach Analysis
Media Audience - All India
600
500
555
469
389
50
40.1
38.8
315
300
255
305
252
40
24.8
242
30
182
200
168
26.0
25.0
18.3
% Growth
Figs in mn
60
453
400
100
70
63.8
121
105
97
131
59
16.5
20
10
0
0
Any M edia
Any TV
Any C&S
Any Pub
2003 R2
Any Daily
2007 R1
Any Radio
Growth %
Any FM
Radio
Internet
Television Reach - All India
500
450
400
60
55.0 453
389
50
Figs in mn
350
40
300
255
250
206
182
200
198
30.9
150
24.0
100
30
20
10
50
0
0
Any TV
C&S
2003
2007
Non C&S
% Reach 2007
Recent Key Trends in Television Industry
•
Digitalization of delivery platforms: Digitalization is setting in the Indian television distribution
network. 2007 witnessed an increasing penetration of DTH with average 3.5 million subscribers,
though the adoption of CAS was slower than expected. Clarity was brought in on IPTV regulations and
this is expected to pave way for both cable operators and telecom companies to foray into IPTV
without the need of any additional licenses. Public broadcaster Doordarshan launched its Mobile TV
pilot with handset major Nokia in early 2007. There have also been numerous initiatives by television
broadcasters in bringing various types of repurposed television content on the mobile handsets these
41
include Star TV’s launch of PLUS application, Essel Group’s DMCL (Digital Media Convergence Ltd)
collaboration with BSNL to launch a Mobile TV application ISEE and others.
Launch of new TV channels: The year 2007, as in the previous 3 years, saw several new channels
launched. However, what was unique in 2007 was the launch of two new ‘General Entertainment
channels’ (GEC) – INX Group’s 9X and NDTV Group’s NDTV Imagine in a space has been
dominated by three incumbent channels Star Plus, Zee TV and Sony for several years. Both these
channels were launched by ex-executives of Star Plus and their respective teams
Implementation of CAS in select areas: On January 1, 2007, mandatory Conditional Access System
(CAS) was introduced in India, starting with select regions in the top 3 metros of India- Delhi, Mumbai
and Kolkata. Chennai was the only other metro city where CAS was previously present. As this was a
new development for India, the implementation of this limited CAS came along with several
safeguards by the Government so as to protect the interests of the Indian consumers. As of December
31, 2007, there were only 503,233 Set-Top-Boxes (STBs) installed in these three CAS areas.
Increased investments in the sector: As in the previous year, the television segment saw the maximum
number of investments and alliances both from financial standpoint as well as from the strategic point.
Some of the strategic alliances in 2007 include NBC Universal picking up a 25% stake in NDTV,
Viacom and Network18 joint-venture for launching television channels and foraying into film
production and Turner forming a joint venture with Miditech to launch television channels.
Television content on the mobile handsets: Star Mobile Entertainment, a division of Star India,
announced the launch of its mobile application PLUS on Sony Ericssion handsets; Essel Group’s
DMCL (Digital Media Convergente Ltd) in collaboration with BSNL launched a mobile TV
application ISEE; NDTV launched its online and mobile portal from its division NDTV Convergence
titled Mobile.NDTV.com which enables mobile users to view NDTV content on their mobile handsets.
•
•
•
•
Television Distribution Trends
TV Households
140
120
102
109
112
119
115
128
123
Million
132
115
100
90
100
80
60
130
61
50
68
70
75
70
79
74
80
111
103
91
85
62
40
50
20
0.1
1
2
3.5
2004
2005
2006F
2007F
8
12
15
2009F
2010F
20
25
0
TV Households
2008F
Pay TV Households
Cable Households
2011F
2012F
DTH Households
Performance of Indian Television Industry in 2007
•
•
Indian Television Industry has grown at a healthy rate of 21% over the last four years, having grown by
13% in 2007 over the previous year. The Indian Television Industry stands at Rs. 226 billion in 2007
having grown from Rs. 191 billion in 2006.
Television distribution industry in 2007 contributed 60% of the television industry’s revenues; its share
in the television industry having increased by two percentage points in the last four years from 58% in
2004. The television distribution industry has also achieved the highest growth rate of 22% in the last
four years as compared with the other segments in the television. In 2007, it stands at an estimated Rs.
136 billion up from Rs. 117 billion in 2006.
42
Television content segment has maintained a steady and healthy growth rate of 18% over the last four
years and achieved a similar growth rate from the previous year. It’s share in the television industry too
has not changed materially and stands at 4% in 2007. In 2007, it stands at an estimated Rs. 9.4 billion
up from Rs. 8 billion in 2006.
Share of the television distribution industry has been the highest at 22% in the overall growth rate of
21% achieved by the television industry in the last four years. The growth in the television industry has
been contributed by 14% increase in the subscription (pay) TV homes and 7% growth in the
subscription spending by these homes.
Television content industry has contributed 18% of the growth in the overall growth rate of 21%
achieved by the television industry in the last four years, though its share is limited to 4%. Growth
achieved by the television content industry is on account of significant increases in the number of
television channels in India. In addition, this growth has necessitated the need for differentiation and
hence higher emphasis is being placed on the quality of television content being produced.
•
•
•
Indian Television Industry
Rs. billion
Television Distribution
% Change
Television Advertising
% Change
Television content
% Change
Total
% Change
2004
75.0
2005
97.0
29%
54.5
14%
7.0
23%
158.5
23%
48.0
5.7
128.7
2006
117.0
21%
66.2
21%
8.0
14%
191.2
21%
2007e
136.5
17%
80.0
21%
9.4
18%
226.0
18%
CAGR 2004-07
22%
19%
18%
21%
Source: FICCI – PWC report - March 2008
Million
2004
TV households
2005
102.0
112.0
3%
3%
62.0
70.0
74.0
24%
13%
5%
61.0
68.0
70.0
22%
11%
3%
1.0
2.0
3.5
900%
100%
75%
% Change
50.0
% Change
DTH households
0.1
% Change
CAGR 2004-07
7%
50.0
Cable TV households
2007e
109.0
% Change
Pay TV households
2006
115.0
4%
14%
12%
227%
Source: FICCI – PWC report- March 2008
Penetration (%)
TV households
2004
2005
4%
0%
0%
57.0
63.0
64.0
16%
10%
2%
56.0
61.0
61.0
14%
8%
0%
1.0
2.0
3.0
836%
95%
70%
49.0
% Change
DTH households
0.0
% Change
59.0
CAGR 2004-07
49.0
% Change
Cable TV households
2007e
59.0
% Change
Pay TV households
2006
57.0
59.0
1%
9%
7%
214%
Outlook for the Television Industry
The Indian television industry is projected to grow by 22% over the next five years, projected to reach an
estimated Rs. 600 billion in 2012 from the present estimate of Rs. 226 billion in 2007.
43
Television distribution industry is expected to reach Rs. 380 billion in 2012 from the current estimated size of
Rs. 136 billion in 2007, which translates into a growth of 23% on cumulative basis over the next five years. The
growth in the television distribution industry is expected to be contributed by both subscription spending by Pay
TV subscribers as well as growth in the Pay TV homes, though the former is likely to have an edge.
The growth in the television distribution industry is expected to be contributed by both subscription spending by
pay TV subscribers as well as growth in the pay TV homes. The pay TV homes are projected to increase from
74 million in 2007 to 115 million in 2012. Currently, cable TV homes command a penetration of 95% of the pay
TV homes in 2007. This is projected to come down to 78% by 2012, largely in favour of the emerging DTH
homes. Cable homes are thus projected to increase from 70 million in 2007 to 90 million by 2012 taking their
penetration up from 61% of the television homes in 2007 to 68% in 2012. This growth is projected to be largely
from semi-urban and rural areas. DTH homes are projected to increase from 4 million in 2007 to 25 million by
2012 thus increasing their penetration from a low 3% of the television homes in 2007 to 19% in 2012.
Television homes are projected to increase from 115 million in 2007 to 132 million by 2012 at a growth rate of
3% over the next five years.
The key drivers for the DTH business are expected to be as follows:
•
CAS implementation & digitalization in 55 cities
•
Increased spends by competition in educating subscribers
•
Adult content
•
Content superiority & expansion
•
Brand Strategy
•
Service Excellence
•
Distribution reach
•
Continuing growth of high end televisions
•
Robust 8 - 9% growth of the Indian economy
•
Launch of new technology like VGA Box, DVR etc.
Rs. billion
2004
75.0
% Change
48.0
% Change
Television content
2006
117.0
2007e
136.5
2008f
167.0
2009f
204.0
2010f
253.0
2011f
310.0
2012f
380.0
29%
21%
17%
22%
22%
24%
23%
23%
54.5
66.2
80.0
100.0
120.0
150.0
175.0
200.0
14%
21%
21%
25%
20%
25%
17%
14%
5.7
7.0
8.0
9.4
11.0
12.8
16.0
18.0
20.0
23%
14%
18%
17%
16%
25%
13%
11%
128.7
158.5
191.2
225.9
278.0
336.8
419.0
503.0
600.0
23%
21%
18%
23%
21%
24%
20%
19%
2010f
128.0
2011f
130.0
2012f
132.0
% Change
Total
2005
97.0
% Change
CAGR
08-12
23%
20%
16%
22%
Million
2004
102.0
2005
109.0
7%
3%
3%
3%
3%
4%
2%
2%
50.0
62.0
70.0
74.0
79.0
85.0
91.0
103.0
115.0
24%
13%
5%
7%
8%
7%
13%
12%
61.0
68.0
70.0
71.0
73.0
76.0
83.0
90.0
22%
11%
3%
1%
3%
4%
9%
8%
% Change
% Change
Television content
50.0
% Change
DTH households
0.1
% Change
2006
112.0
2007e
115.0
2008f
119.0
2009f
123.0
1.0
2.0
3.5
8.0
12.0
15.0
20.0
25.0
900%
100%
75%
129%
50%
25%
33%
25%
2006
59.0
2007e
59.0
2008f
60.0
2009f
60.0
2010f
61.0
2011f
61.0
2012f
62.0
CAGR
2008-12
3%
9%
5%
48%
Penetration (%)
2004
57.0
2005
59.0
44
CAGR
2008-12
% Change
4%
49.0
% Change
Television content
49.0
% Change
DTH households
% Change
0.0
0%
0%
1%
1%
2%
1%
1%
57.0
63.0
64.0
66.0
69.0
71.0
79.0
87.0
16%
10%
2%
4%
4%
3%
11%
10%
56.0
61.0
61.0
60.0
59.0
59.0
64.0
68.0
14%
8%
0%
-2%
-1%
0%
8%
7%
1.0
2.0
3.0
7.0
10.0
12.0
15.0
19.0
836%
95%
70%
121%
45%
20%
31%
23%
1%
6%
2%
44%
DOAI (DTH Operators Association of India)
On April 16, 2008, the DTH operators who have been granted the License from Ministry viz. Dish TV, TATA
Sky, Airtel Digital TV, Sun Direct, Reliance BIG TV and Bharti have announced the formation of DOAI.
The DOAI shall work towards the growth of the DTH sector and shall be taking up various issues relating to the
DTH with the TRAI and various government authorities. The DOAI has indicated that at present the issues
which need to be discussed and represented to the Government inter alia include the rationalization of steep and
multiple taxes which at present are to the tune of around 56% on the DTH platforms, the reduction /
rationalization in the DTH license fee, issue relating to levy of entertainment tax on DTH and the content
pricing.
45
OUR BUSINESS
We are one of the group companies of the Essel group. The Essel Group has diverse national and global
business interests, encompassing Packaging – Laminated tubes (Essel Propack Limited (EPL) & Engoron),
Media - Television/ Electronic media (ZEEL, Zee News, WWIL and Dish TV), Online Lotteries (Playwin),
Outdoor Family entertainment & multiplexes (Essel Infraprojects (formerly, Pan India Paryatan Limited) and E
City Entertainment), Newspaper publishing (DNA), Real estate business and Indian Cricket League (in
partnership with IL&FS). The Essel Group is headed by Mr. Subhash Chandra.
channels and allied video/ audio services to subscribers on a monthly subscription basis. This transmission is
enabled through satellite equipment installed at the end consumer premises wherein a subscriber can directly
receive the programming from our satellite, through a mini dish which is then de-coded by a digital receiver
called set-top-box or STB. This process does not require any intermediary or cable operator.
Our business commenced operations in October 2003 (pursuant to a DTH license issued by the Ministry of
Information & Broadcasting, Government of India in 2003) with 47 channels. Currently, we offer over 200
digital channels (including approx 20 voice channels) to approx. over 4 million subscribers, across India. We are
listed on the NSE, BSE and CSE.
We offer service to the market under the name “DISH TV”.
Company History
Zee Entertainment Enterprises Limited (ZEEL) (formerly known as Zee Telefilms Limited) is the flagship
company of the Essel group and is one of India’s largest vertically integrated media and entertainment
companies. With a view to consolidate the related competencies of all the group companies into a single entity,
the management of the Group de-merged the DCS business undertaking of ZEEL and Siti Cable Network
Limited (“Siti Cable”) into the company Dish TV India Limited (erstwhile ASC Enterprises Limited) pursuant
to a Scheme of Arrangement under sections 391 and 394 and other relevant provisions of the Companies Act
1956. As per the scheme, our company took over the DCS business of ZEEL and Siti Cable. For further details
refer to section titled “History of the Company and Other Corporate Matters” on page 55 of this Letter of Offer.
Business Overview
We were the first entrant in the DTH category in India. We bring to our subscribers digital quality television
viewing and carry over 200 National and International channels for our viewers including 20 voice channels.
We also provide various Value added services like Electronic Program Guide (EPG), Parental Lock, Sports
Active, News Active, Games, Near Video on Demand (NVOD)
Our subscriber base in March 2006 was 0.89 million, which reached 1.97 million in March 2007 and currently it
stands at approx. over 4 million. Also, our consolidated revenues have increased from Rs. 5,422.96 Lacs in FY
2006 to Rs. 20,090.75 Lacs in FY 2007 and Rs. 42,271.65 in FY 2008. Our revenues for three months ended
June 30, 2008 is Rs. 16,678.93 Lacs.
Current Subscription Packages
Platinum
Under this package, the subscriber gets 165 channels for Rs 275 (plus taxes) per month. This package
includes most of the available English and Hindi entertainment channels with cinema, news, sports,
business, lifestyle, world news, kids entertainment, etc.
Diamond
Under this package, the subscriber gets 140 channels for Rs 220 (plus taxes) per month. The package
offers family entertainment in Hindi and English along with news, cinema, sports and kids
programming.
46
Gold
includes – select sports channels, (Zee Sports,Ten sports), movie channels (Premiere, Action, Classic),
English and infotainment channels in addition to regional channels and Doordarshan/ Free to Air
(including news) channels.
Silver
includes selected popular general entertainment, regional content along with DD/ FTA, and news
channels.
The above packages are available throughout the country except in four southern states where there are
some changes in the content based on the preference of a particular state.
Multi Room Pricing
Incentives are offered for additional connections in the same household. Multi Room Pricing is valid
for the select packages only, for which we charge Rs 150 (plus taxes) per month. This scheme is
currently offered in 85 cities only.
Package Customisability
DishTV offers customisability of packages as per the language preferred by the subscriber. For any of
the 4 packages opted, the subscriber has a choice to select one from 8 different language zones – Hindi/
Punjabi, Marathi, Gujarati, Oriya, Bangla, Tamil/ Malyalam, Kannada, Telugu. On selection of a
language zone, the subscriber gets regional programming in his respective language, whilst avoiding all
other redundant language channels on his TV. This feature is targeted to dislocated audiences that
reside in states other than their own home language state, since DishTV can provide them their
preferred channels irrespective of they reside; the feature is not provided by the cable operator
typically.
Moreover several a la carte smaller bouquetes are available to the subscribers at different prices,
wherein the subscriber can choose such packages based on his choice and needs.
New Initiatives and Services
In view of the needs of an urban Indian household, the Dish TV platform offers a basket of services, in addition
to satellite channels. We have entered into an agreement with Open TV, USA, provider of interactive solutions
to DTH platforms. We provide services like, EPG, NVOD, News Active, Sports Active and Gaming.
Dish TV was the one of the first to launch NVOD service under the name ‘Movie on Demand’, which today
offers movies from both Bollywood and Hollywood, apart from language dubs of English titles. The Sports
Active service provides features like multi-camera viewing, multi-language commentary, highlights on demand
and player statistics. The news active service offers eight different genres of news on the same screen for the
viewer to select from. There are also mosaic active services to enable faster channel selection in five genres –
music, cinema, movies, khel and kids channels.
Infrastructure facilities
A content aggregation, playout & up-linking facility and an integrated subscriber management system are some
of the key facilities that exist at our earth-station based in Noida, which is in operation since October 2003. We
have 9 Ku band transponders on the New Skies Satellite (NSS) which provide footprint across the country. We
have agreement with Protostar satellite enabling us to access upto 12 additional transponders. Software systems
have been developed for subscribers and field management supporting functions such as sales promotion,
performance monitoring, consumer and trade interface and service billing/collection features.
Our technical facility comprises of Teleports with Multiple Antennas, Uplinking Equipments with High Power
amplifiers, Station control and automation system, Play out facility, Off Air Monitoring facility with Silence
47
Audio detect system, DTH channel monitor, Encryption system for DTH services, Network Management, SMS
and Call Center and Facility for hosting all playout and uplink equipment.
Customer care
We have approx. more than 100 Dish Care Centers (DCCs) and service franchisees, who provides installation
and after sale-service. The Dish Care Centers to serve as one point resolution centers for installation, servicing
of equipments, collection centre, duplicate bill generation, response and request management etc. The DCCs are
managed by a team of service engineers.
We currently have a 500 seat call centre, operating 24*7, answering calls from across all over the country,
related to content provisioning, prospective customers & dealers, complaints & suggestions, service packages
etc. IVR and call monitoring facilities are operational in 9 different languages. These services are provided by
our wholly owned subsidiary, Integrated Subscribers Management Services Limited (ISMSL).
Sales & Distribution
We have trade network through distributors and dealers. The distributors work as a stock point from where
dealer takes the equipment and sells to the end consumer. We have over 675 distributors and approx. 38,000
dealers present in approx. 6500 towns across India. The trade network is managed by a sales team of 220
members, through 7 zonal and 13 regional offices. Further we have over 200 ‘Dish Shoppe’ which are
exclusively involved in sale of Set Top Box, and other customer related services. The Dish TV Shoppe will also
provide the demo product experience to prospective users and will serve as collection and service points for
existing subscribers.
Distributors and dealers are selected considering key areas viz. dealer/ distributor location, investment
capabilities, technological competence, industry background etc.
Under the current structure being followed by the company the DCC installs and services in the top 85 markets
whereas dealers are authorized to act as authorized installers in the rest of the markets, depending on their
respective competencies. Service support for box repairs on-location is provided by DCC and even few of the
dealers to address the consumer complaints, if any.
The process of subscription renewal, happens mostly through dealers and distributors though many subscribers
choose to pay directly to the company via credit card, cheque and so on.
Strategy
In 2007, the E&M industry recorded a growth of 17% over the previous year. The industry reached an estimated
size of Rs. 513 billion in 2007, up from Rs. 438 billion in 2006. In the last four years 2004-2007, the industry
recorded a cumulative growth of 19% on an overall basis (Source: FICCI - PWC report March 2008). Television
and entertainment media are reportedly on a high growth trajectory, as is the consumers’ capacity & propensity
to spend on lifestyle products. Dish TV is expected to be one of the leading player in the digital services space,
Leveraging strengths built for marketing and brand building, distribution, service quality, consumer friendly
packaging and pricing and by providing a wide choice of content to the customers. The Revenue stream is
expected to be strengthened through a mix of value added services, customized packages and growth in the
number of subscribers. The Company is also looking to enhance the corporate and MDU sales network to cater
to large customers for bulk deals and for builders and /or Apartments and Resident Welfare Associations.
Competitive Advantage
We believe, following are the strengths that will differentiate us from the competitors:
•
Wide subscriber base: The Company has created a Zonal structure comprising of 7 zones to create a
wide spread distribution capability across India. Our emphasis is to build capability in the team to
develop subscriber relationship management and CRM calendars which will help in timely collection
and to upgrade offers. We have a geographically diverse subscriber base. Maharashtra, Gujarat and
Karnataka contribute approx. 30% to the subscriber base.
48
•
Distribution & customer service network: We have a network of over 675 distributors and approx.
38,000 dealers (dealership presence in 6,500 towns). We have systems for collections and customer
service with over 12,500 service personnel, more than 100 Dish Care Centers, over 200 ‘Dish Shoppe’
and offering customer care in 9 different languages through call centers.
•
Infrastructure: We have 9 transponders and each transponder can host atleast 15 channels. We have
partnered with following software providers:
o
Open TV for middle ware
o
CONAX for encryption and authentication
o
SCOPUS for compression systems
o
HARRIS for automation and broadcasting software
•
First Mover Advantage: On account of being the first DTH service provider in India, with a large
footprint of trade and subscribers in both urban and rural markets the company has secured relatively
larger scale and market share.
•
Promoter backing: Our company is promoted by Essel - Zee group., a experienced player in Media and
Entertainment Industry with requisite industry domain knowledge and wide spread awareness of the
brand i.e. Zee.
•
Multi-tiered / Regional packages: The content is offered at various price points to customers based on
the viewer preference and capacity to pay. This helps us in driving numbers from different consumer
segments – both demographically as well as geographically.
•
Cost conscious: The entire set-up is under continuous monitoring to derive economies of scale from
content providers and equipment suppliers.
•
Transponder capacity: We are using nine transponders as on date on the NSS-6 Satellite comprising
four transponders of 54 Mhz. and five transponders of 36 Mhz. distributed in horizontal and vertical
polarizations.
Head-end In the Sky (HITS)
We are one of the first licensee of HITS services in India. We have entered into a business tie-up/arrangement
with one of our Group Companies Wire and Wireless (India) Limited, to undertake the digitalization and
addressability in the cable TV sector by distributing various channels to MSOs/LCOs through the HITS
platform.
Other Business Activities
Other business activities of our Company are as follows:
•
Teleport Services: The Company is also in the business of providing teleport services (uplinking and
space segments) to the broadcasters of various channels. Presently channels are being uplinked from
the Teleport in C-Band and Ku-Band. The Company has acquired Transponders on lease on various
satellites which include ASIASAT 3 S, INTELSAT 904, INSAT 4 A, PAS 10 AND INSAT 2 E and
has the relevant permission from the Department of Space and Wireless and planning Commission for
usage of the above said transponders on the satellites. The license is issued by the Ministry of
Information & Broadcasting.
Our Business Drivers
We believe that following are the key growth drivers for the business:
•
MDUs: Multi Dwelling Unit (MDU) is method of wholesale and mass selling of product to the
residents of a particular high rise building or a complex. MDU is win-win situation for both the
Company and the subscriber as it curtails flab on both the sides and makes the entire process seamless.
In most of the metro cities huge opportunities exist in high rise buildings/complexes for installation of
multi-dwelling Units (MDU). We have already taken initiatives in Mumbai, Delhi, Kolkata, Pune,
Ahmedabad and Bangalore and would like to extend the same to other cities .
49
•
Urbanization: In the recent years there is rapid rise in urbanization. In urban areas people prefer better
quality of product and world class services due to higher net disposable income. DishTV provides the
quality viewing and host of values added services to the system. Increasing urbanization is expected to
expand the potential market for DishTV.
•
Chain Stores: Chain Stores are mushrooming pan India. Organized retail market is expected to grow at
a fast pace with help of institutional investments. Some of the big names are Reliance, Essar, RPG,
Rahejas, Birlas, Pentaloons etc. We have entered into arrangements with some of these big chain stores
like Next, Mobile Shop, Vijay Sales, Big bazaar, Spencer etc. to market our product.
•
Corporate business: Big corporates with large number of employees are one of the key potential
growth drivers for our future business. We have initiated the activity to tap this potential area in the
coming days. Some of the corporates are using our product to gift to their employees and thus act as a
ready made platform for wholesaling our product to their employees.
•
CAS extension: Government is in process of introducing CAS in 55 big cities in the next one or two
year. This may result in the increased demand for DTH services if the customer finds the DTH better
than CAS on various evaluation parameters.
Value Added Services
•
Sports Active: Subscribers can pick from multiple camera angles, choose to hear commentary in
different languages, get player statistics & match highlights on demand.
•
News Active: DishTV's Active feature on Zee News gives subscribers an option to choose from from 8
different genres, including Live News, Top Stories, Weather, Sports, Crime, Special, Entertainment
and Business, on demand.
•
Mosaic Active: Subscribers can choose the channel through a mosaic screen showcasing all channels
of a single genre. DishTV offers 5 such active services - Cinema Active, Movie Active, Khel Active,
Music Active & Kids Active.
•
Gaming: DishTV’s 24 x 7 gaming channel Playjam offers 8 games of board, arcade, puzzle & strategy.
Further we also add new games frequently.
•
Movie on Demand: Subscribers can watch Hollywood and Bollywood blockbusters at time convenient
to them. Orders can be placed through call, sms or web and are authorized within minutes.
Subsequently, the subscriber can enjoy the 'demanded' movie for the next 24 hours.
•
Electronic Program Guide (EPG): DishTV's EPG is a display of the program schedule of all
channels. It is loaded with features like programme alert, parental lock, channel sorting, creating lists
of favorites, etc.
•
Multi Audio Feed: DishTV offers a feature where subscribers can choose from multiple languages on
selected channels.
Risk management and Internal control system
Our risk management approach comprises three key elements, which are as follows:
•
Risk identification: External and internal risk events, that must be managed are identified in the
context of each business’ strategy and specific business objectives. These risk events are assessed by
senior managers of the business on defined criteria and prioritized for development of risk mitigation
plans. Broadly risks are classified into Strategic, Operations, Financial and Knowledge risks, which are
further drilled down to market structure, process, systems, legal, governance and people culture.
•
Risk mitigation: This step comprises developing of a mitigation plan for the risks identified and to be
treated on priority.
50
•
Risk monitoring and assurance: Key risks are managed through a structure that cascades across the
corporate and business. At the corporate level, senior management is responsible for the risk
management process and reviewing the implementation and effectiveness of mitigation plans.
Apart from business risks, the Company is exposed to risks on account of interest rate, foreign exchange,
commodity pricing and regulatory changes, the details of which are as follows;
•
Foreign Exchange Risk: We import a substantial part of CPE and are therefore vulnerable to the
fluctuation in forex market. Some of our exposures are hedged to mitigate the risk arising out of wild
fluctuation in Forex market.
•
Interest Rate Risk: We are also exposed to change in the interest rate structure and will impact our
Profit & Loss account if rates fluctuate.
Insurance
The Company maintains insurance coverage with Indian insurers, such as The National Insurance Company
Limited and Bajaj Allianze Insurance Company Limited, for each of the Company’s operations. The insurance
coverage generally includes coverage for fire and allied perils, third party liability etc.
Competition
The Company’s business plan faces a direct competition from Analouge Cable Operators, Digital Cable, IPTV
and other DTH operators like Big TV, TATA Sky, Airtel Digital TV and Sun Direct .
Employees
The Company employs a number of qualified and skilled employees. The Company’s senior management,
including the heads of each department, is professionally qualified. The Company’s staff includes engineers,
marketing specialists, costing consultants, procurement officers and accountants.
The Company’s work force presently consists of a growing number of employees, in addition to outsourced
staff. As at September 30, 2008, the Company had 984 employees including the call centre staff.
Employee Compensation
The Company’s employee compensation and benefits include salaries and health insurance. The Company’s
pension contributions in respect of the Company’s employees are limited to those contributions required to be
made by the Company under Indian law to state-run compulsory pension programs.
Labour Relations
The Company’s employees are not unionized and the Company has not experienced any work stoppages or
significant labour disruptions during the Company’s operational history.
Properties
The Company does not own any property and all the premises used by the Company for its operational activities
are leased from various parties.
51
REGULATIONS AND POLICIES
The following is a brief overview of the salient laws and regulations which are relevant to our business.
CENTRAL LAWS
The Telecom Regulatory Authority of India Act, 1997
The Telecom Regulatory Authority of India Act, 1997 (“TRAI Act”) came into force with retrospective effect
from January 25, 1997 to provide for the establishment of the Telecom Regulatory Authority of India
(“TRAI”)and the Telecom Disputes Settlement and Appellate Tribunal for regulating telecommunication
services, adjudication of disputes, disposal of appeals, to protect the interest of service providers and consumers
of the telecom sector and to promote and ensure orderly growth of the telecom sector and matters connected
therewith or incidental thereto. TRAI Act among other things provides for adjudication of disputes between
licensor and licensees or between two or more service providers or between the service provider and a group of
consumers.
The TRAI Act entrusts various powers on the TRAI to discharge functions relating to terms and conditions
relating to licenses granted to service providers, ensuring technical compatibility and effective inter-connection
between different service providers, regulating arrangement amongst service providers for sharing their revenue
derived from telecommunication services, levying fees and other charges at rates and in respect of services
provided. The TRAI Act also mandates the TRAI to undertake administrative and financial functions as may be
entrusted to it by the Central Government.
In order to streamline and regulate broadcasting and cable sector, TRAI has framed various regulations and has
issued various notifications, tariff orders and directions from time to time.
Under the Telecommunication (Broadcasting and Cable Services) Interconnection (Fourth Amendment)
Regulation, 2007 dated September 3, 2007 issued by TRAI, each broadcaster/distributor is required to give the
reference interconnect offer of its channels for the DTH platforms. In terms of the said regulations, a
broadcaster/distributor is also required to offer the bouquets as well as the ala carte rate of all the channels
being provided to the DTH service provider. The DTH operator is free to form the bouquets as deemed suitable
as per its business requirements and place the channels in these bouquets as per its own choice. Further,
pursuant to a subsequent press release issued by TRAI, the broadcaster/distributor is also required to offer the
same bouquet being offered in non-CAS areas in cable distribution and the rates of the channels of the
broadcaster for the DTH platform shall not be more than 50% of the non-CAS rates of the channels.
Copyright Act, 1957
The Copyright Act, 1957 (“Copyright Act”) governs copyright protection in India. Under the Copyright Act,
copyright may subsist in original literary, dramatic, musical or artistic works, cinematograph films, and sound
recordings. Following the issuance of the International Copyright Order, 1999, subject to certain exceptions, the
provisions of the Copyright Act apply to nationals of all member states of the World Trade Organization.
While copyright registration is not a prerequisite for acquiring or enforcing a copyright in an otherwise
copyrightable work, registration constitutes prima facie evidence of the particulars entered therein and creates a
rebuttable presumption favoring the ownership of the copyright by the registered owner. Copyright registration
may expedite infringement proceedings and reduce delay caused due to evidentiary considerations. Once
registered, copyright protection of a work lasts for a period of 60 years following the death of the author.
The Copyright Act grants every broadcasting organisation, a special right known as the broadcast reproduction
right which subsists until 25 years from the beginning of the calendar year next following the year in which such
broadcasting was made. Any re-broadcasting, recording reproduction or making the broadcast available to the
public without a license from the holder of the broadcast reproduction right would be deemed to be an
infringement of the broadcast reproduction right. Infringing of copyright under the Copyright Act would entail
imprisonment.
52
The remedies available in the event of infringement of copyright under the Copyright Act include civil
proceedings for damages, account of profits, injunction and the delivery of the infringing copies to the copyright
owner.
The Copyright Act also provides for criminal remedies including imprisonment of the accused and the
imposition of fines and seizures of infringing copies. Other remedies are administrative or quasi judicial
remedies which are prosecuted before the Registrar of Copyright to ban the import of infringing copies into
India and the confiscation of infringing copies.
Trademarks
The Trade Marks Act, 1999 (the “Trademark Act”) governs the statutory protection of trademarks in India. In
India, trademarks enjoy protection under both statutory and common law.
Indian trademarks law permits the registration of trademarks for goods and services. Certification trademarks
and collective marks are also registrable under the Trade Mark Act.
An application for trademark registration may be made by any person claiming to be the proprietor of a
trademark and can be made on the basis of either current use or intention to use a trademark in the future. The
registration of certain types of trade marks are absolutely prohibited, including trademarks that are not
distinctive and which indicate the kind or quality of the goods.
Applications for a trademark registration may be made for in one or more international classes. Once granted,
trademark registration is valid for ten years unless cancelled. If not renewed after ten years, the mark lapses and
the registration for such mark has to be obtained afresh.
While both registered and unregistered trademarks are protected under Indian law, the registration of trademarks
offers significant advantages to the registered owner, particularly with respect to proving infringement.
Registered trademarks may be protected by means of an action for infringement, whereas unregistered
trademarks may only be protected by means of the common law remedy of passing off. In case of the latter, the
plaintiff must, prior to proving passing off, first prove that he is the owner of the trademark concerned. In
contrast, the owner of a registered trademark is prima facie regarded as the owner of the mark by virtue of the
registration obtained.
The Indian Wireless Telegraphy Act, 1933
The Indian Wireless Telegraphy Act, 1933 (“Wireless Act”) governs all forms of “wireless communication”,
i.e.; transmission and reception without the use of wires or other continuous electrical conductors between the
transmitting and the receiving apparatus. It stipulates that no person shall possess wireless telegraphy apparatus
without obtaining a license in respect thereof. Applications under the Wireless Act are made to the Wireless
Planning & Coordination Wing (“WPC”), a wing of the Ministry of Communications, created in 1952. The
WPC is the national radio regulatory authority responsible for frequency spectrum management, including
licensing to wireless users (government and private) in India. It exercises the statutory functions of the central
government and issues licenses to establish, maintain and operate wireless stations. The Wireless Act lays down
that possession of wireless telegraphy apparatus without license would be punishable with a fine extendable up
to Rs. 100 for first offence and in case of subsequent offence extendable up to Rs. 250.
The Broadband Policy 2004
The Broadband Policy, 2004, issued by the Department of Telecommunications, Ministry of Communications
and Information Technology, Government of India (“DoT”), visualises creation of infrastructure through
various access technologies which can contribute to growth and can mutually coexist.
Under the Broadband Policy, 2004, DTH service providers shall be permitted to provide receive only internet
service after obtaining Internet Service Provider (“ISP”) licence from the DoT. Such ISP licensees get the right
to permit its customers for downloading data through DTH. DTH Service is also permitted to provide
bidirectional internet services after obtaining VSAT and ISP licence from the DoT. The quality of service
parameters for such services using various access technologies is determined by TRAI. For DTH services with
receive only internet, no SACFA / WPC clearance is required wherever the total height of such installation is
less than 5 meters above the rooftop of an authorised building.
53
Foreign Investment Regulations
FEMA Regulations
FDI in securities of an Indian company is regulated by the FEMA and the rules, regulations and
notifications made under the FEMA. The RBI, in exercise of its power under the FEMA, has notified the
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations,
2000 (“FEMA Regulations”) to regulate the issue of Indian securities to persons resident outside India and the
transfer of Indian securities by or to persons resident outside India. The FEMA Regulations provide that an
Indian entity may issue securities to a person resident outside India or record in its books any transfer of security
from or to such person only in the manner set forth in the FEMA and the rules and regulations made thereunder
or as permitted by the RBI. Besides, FDI in India is also governed by the provisions of the Foreign Direct
Investment Policy (“FDI Policy”), issued from time to time by the DIPP, the administering authority in respect
of which is the FIPB.
Under the FDI Policy, DTH comes under the head of broadcasting, wherein FDI and FII in companies engaged
in the business of DTH is restricted to 49% of their paid up capital, subject to FIBP approval and provided that
within this limit of 49%, FDI does not exceed 20%. Investment in DTH sector is subject to the guidelines issued
by Ministry of Information and Broadcasting.
Under the portfolio investment scheme of FEMA, registered “foreign institutional investors” (“FIIs”) (as
defined in FEMA) may freely sell equity shares on the Indian stock exchanges on which the equity shares are
listed provided it is through a registered broker. Under such portfolio investment scheme, a single FII cannot
own more than 10% of the total issued capital of a company. In respect of an FII investing on behalf of its subaccounts, the investment on behalf of each sub-account cannot exceed 10% of the total issued capital of the
company, unless the sub-account is held by foreign corporates or foreign individuals resident outside India, in
which case the maximum permissible limit is 5% for each such sub-account.
The maximum permissible limit of FII investment in our Company has been increased to the extent of 49%
(maximum permissible limit) by a board resolution dated March 2, 2007 followed by way of a special
resolution of the shareholders of our Company dated March 30, 2007.
Guidelines For Obtaining DTH License
Ministry of Information and Broadcasting, Government of India, has issued Guidelines for obtaining license for
providing Direct-To- Home broadcasting service in India (“DTH Guidelines”) which contains the eligibility
criteria, basic conditions/obligations and procedure for obtaining the license to set up and operate DTH services.
Under the DTH Guidelines, only companies registered in India under the Companies Act, 1956 and having
Indian management control can operate DTH servces in India. The companies seeking licence to provide DTH
services in India cannot have more than 20% of total equity in any company engaged in the business of cable
network services and vice versa. A non-exclusive license is provided to companies providing DTH services
which is valid for 10 years subject to cancellation/suspension in the interest of India.
The licensee company is required to adhere to program code and advertising code as and when issued by
Ministry of Information and Broadcasting. The licensees have to follow technical standards and other
obligations. A company providing DTH services cannot provide any other mode of communication, including
voice, fax, data, communication, internet, etc. unless specific license for these value-added services has been
obtained from the competent authority.
STATE LAWS
Entertainment Tax Laws
In majority of states, the payment of entertainment tax is a liability of the service provides. DTH service
providers have to register themselves under respective state entertainment laws and they are required to deposit
the entertainment tax to the concerned department on monthly basis. The DTH service providers are also
required to file returns from time to time.
54
HISTORY OF THE COMPANY AND OTHER CORPORATE MATTERS
Our Company was originally incorporated as Navpad Texturisers Private Limited on August 10, 1988 under the
Companies Act, 1956, as amended. The name of our Company was changed to ASC Enterprises Private Limited
and a fresh certificate of incorporation reflecting the change in name was issued on September 29, 1995 by the
Registrar of Companies, Maharashtra, Bombay. Our Company was converted to a public company and a fresh
certificate of incorporation was issued by the Registrar of Companies, Maharashtra, Bombay on December 13,
1995. The name of our Company was then changed to Dish TV India Limited and a fresh certificate of
incorporation was issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana, New
Delhi on March 7, 2007. The registered office of our Company was shifted from 135, Dr. Annie Baesant Road,
Worli, Mumbai 400 018, India to B-10, Essel House, Lawrence Road, Industrial Area, Delhi, 100 035, India on
October 4, 1999.
Zee Entertainment Enterprises Limited (formerly known as ‘Zee Telefilms Limited’) had transferred their direct
consumer services business undertaking to our Company and further Siti Cable Network Limited (“Siti Cable”)
and New Era Entertainment Network Limited (“NEENL”) was merged with our Company, as approved by the
order of the High Court of Judicature at Delhi by its order dated December 18, 2006 and High Court of
Judicature at Bombay by its order dated January 12, 2007 (“Scheme of Arrangment”), pursuant to which, the
Equity Shares of our Company were listed on BSE and NSE on April 12, 2007 and thereafter they were listed on
CSE on June 4, 2007.
Demerger of direct consumer business of Zee Entertainment Enterprises Limited and merger of Siti Cable
and NEENL with our Company
The High Court of Judicature at Delhi by its order dated December 18, 2006 and High Court of Judicature at
Bombay by its order dated January 12, 2007 approved the Scheme Of Arrangement by which Zee Entertainment
Enterprises Limited transferred its direct consumer services (DCS) business to the Company; and Siti Cable and
NEENL transferred their entire business and whole of undertakings to our Company, which became effective
from January 19, 2007.
As per the provisions of Scheme of Arrangement, Zee Entertainment Enterprises Limited re-organized and
segregated, by way of demerger, its business and undertakings engaged DCS business and Siti Cable and
NEENL transferred their entire business and whole of undertakings to our Company.
Pursuant to the Scheme of Arrangement and in accordance with the provisions of Sections 391 to 394 read with
Section 78, 100 to 103 and other relevant provisions of the Companies Act, the entire DCS business undertaking
of Zee Entertainment Enterprises Limited and the entire business and whole of undertakings of Siti Cable
Network Limited and NEENL (“DCS Undertaking”), which comprised all of the assets, liabilities, approvals
and intellectual property rights, in connection with or pertaining to or relatable to direct consumer business
undertaking of Zee Entertainment Enterprises Limited and all of the assets, liabilities, approvals and intellectual
property rights of Siti Cable and NEENL, were transferred to our Company as a going concern, from April 1,
2006, same being the ‘Appointed Date’.
As consideration for such transfer, the shareholders of Zee Entertainment Enterprises Limited were entitled to
the Equity Shares of our Company in the ratio of twenty three fully paid up Equity Shares of Re.1 each of our
Company for every ten equity shares of Re 1 each held in Zee Entertainment Enterprises Limited
Our Company had undertaken the following capital re-organization and later issued and allotted Equity Shares
on April 10, 2007, to the shareholders of Zee Entertainment Enterprises Limited in the following manner:
a.
b.
c.
d.
Our Company had split the face value of its equity shares from Rs. 10 to Re.1 through a resolution of
the shareholders of our Company dated September 16, 2006.
The existing shareholders of Zee Entertainment Enterprises Limited were entitled to Equity Shares of
Re. 1 each, in the ratio of 23 Equity Shares for every 10 equity shares of Zee Entertainment Enterprises
Limited.
The fully paid up equity share capital of our Company was then reduced by way of canceling three
Equity Shares for every four Equity Shares.
After giving effect of split and capital reduction as stated above, our Company had issued and allotted
Equity Shares to the shareholders of Zee Entertainment Enterprises Limited in the ratio of 5.75 Equity
55
Shares for every 10 equity shares of Re. 1 each held in Zee Entertainment Enterprises Limited. *
* Pursuant to said ratio 24,93,00,890 Equity Shares of our Company were issued and allotted to equity
shareholders of Zee Entertainment Enterprises Limited on April 10, 2007.
Pursuant to the Scheme of Arrangement, all staff, workmen and employees relatable to the DCS Undertaking, in
service on January 19, 2007, have become staff, workmen and employee of our Company with effect from April
1, 2006.
Pursuant to the Scheme of Arrangement, all legal proceedings of whatsoever nature by or against Zee
Entertainment Enterprises Limited, Siti Cable and NEENL, pending or arising and relating to the DCS
Undertaking may now be continued and enforced by or against our Company. In addition, all contracts, deeds,
bonds, agreements and other instruments wherein Zee Entertainment Enterprises Limited, Siti Cable and
NEENL are parties and the same relates to the DCS Undertaking may now be enforceable against or in favour of
our Company.
The SEBI by its letter dated February 9, 2007 bearing number CFD/DIL/19(2)(b)/PB/MKS/85762/2007 issued
to the NSE had relaxed the obligations of our Company to comply with Rule 19(2) (b) of Securities Contracts
(Regulation) Rules, 1957, in light of the provisions of clause 8.3.5.1 of the SEBI Guidelines, for listing of the
Equity Shares of our Company in the Stock Exchanges.
In accordance with the provisions of the Scheme of Arrangement, the Equity Shares of our Company, issued
pursuant to the Scheme of Arrangement as well as its existing equity shares issued for the purpose of
incorporation were listed on BSE and NSE on April 12, 2007 and thereafter they were listed on CSE on June 4,
2007.
Milestones in respect of our business:
Year
September 2003
April 2003
April 2004
April 2006
May 2006
August 2006
April 2007
Activity
Obtained DTH License from MIB
Obtained licence for HITS from MIB
Obtained Teleport License from the MIB
Merger of DCS business of ZEEL with Dish TV
Registered subscriber crosses 10 lakhs subscriber base
Launch of interactive services
Listing of Equity Shares pursuant to the Scheme of Arrangment
April 2007
Registered subscriber base crosses 20 lakhs
July 2007
Launch of VGA box, technology by which a computer desktop can be converted into a
Television set
March 2008
October 2008
Main Objects of our Company
The main objects of our Company as contained in our Memorandum of Association of our Company are as
below:
1.
To plan, establish, develop, provide, operate, maintain and market various services, including cable or
satellite based communications and networking services or broadcasting or broadcasting content
services, direct-to-home services, satellite based transmission services and maintain telecommunication
networks, systems, services including telephones, telex, message, relay, data transmission, facsimile,
television, telematics, value added network services, paging cellular, mobile, audio and video services,
maritime and Aeronautical communication services and other telecommunication services as are in use
elsewhere or to be developed in future and to act as satellite based service provider and carry on the
business of generation, distribution, redistribution, reception, transmission, re-transmission of audio,
video, data and radio signals.
2.
To carry on business of manufacture, assemble, put to place, set up, plant, establish, develop, acquire,
purchase, launch, relaunch, hire, lease, time share, manage, maintain, operate, run, replace, sale,
upgrade, or otherwise commercially exploit satellite, space craft, ground station assets, transponders,
56
control stations, via uplink or downlink or otherwise for the purpose of transmitting relaying,
telecommunicating, broadcasting, narrowcasting, telecasting, any form of radio, audio, video signals
both terrestrially and spatially including obtaining rights of distribution and marketing of
communication signals and electronic data by means of satellite, wireless, wire or other electronic or
mechanical methods of delivery or otherwise and to providing consultancy services relating to
telecommunication, satellite, transponder, communication, broadcasting network systems, mobile
systems, telephony, information technology and exploiting software associated with provision and
management of telecommunication and broadcasting / channel distribution services.
3.
To receive, buy, sell, procure, develop, produce, commission, decrypt, aggregate, turnaround, encrypt
and distribute various kinds of entertainment contents/software (programmes), data for their
aggregation, exhibition, distribution and dissemination on TV channels / TV signals / video and audio
signals, be it satellite TV channels or terrestrial TV channels or cable channels or through any other
mode or through encryption, decryption of signals / channels using existing and/or emerging
technologies, including distribution via internet, distribution via internet protocol or webcasting or
exhibition in cinema and/or video theater in all forms, be it an analogue signals or digital signals or
through sale of physical material like cassettes including audio cassettes, video cassettes, digital video
discs, CD ROM’s etc. and any emerging technology.
Changes in our Memorandum of Association
During the last ten years, the following changes have been made to our Memorandum of Association.
Date of Shareholder Approval
April 10, 1999
July 30, 2002
September 16, 2006
February 7, 2007
March 7, 2007
May 29, 2008
Changes
Change in the registered office clause from State of Maharashtra to
National Capital Territories of Delhi and Haryana.
Increase in the authorized share capital of our Company from Rs.
5,000 lakhs divided into 500 lakhs equity shares of Rs. 10 each to
Rs. 7,300 lakhs divided into 730 lakhs equity shares of Rs. 10 each.
Split of face value of equity shares of the Company from Rs. 10 per
equity share to Re. 1 per equity share and consequently authorized
share capital was changed from 730 lakhs equity shares of Rs. 10
each to 7,300 lakh equity shares of Re. 1 each.
Change in the main objects clause.
Change in the name of the Company from ASC Enterprises Limited
to Dish TV India Limited.
Increase in the authorized share capital of our Company from Rs.
7,300 lakhs divided into 7,300 lakhs Equity Shares to Rs. 10,000
lakhs divided into 10,000 lakhs Equity Shares.
The details of the capital raised by our Company are given in “Capital Structure” on page 14.
Summary of Key Agreements
Agreement to transfer DTH equipment unit business between Essel Agro Private Limited (“EAPL”) and our
Company dated December 31, 2006
In terms of the agreement, our Company had agreed to purchase all rights, title and interests in set-top boxes,
dishes and other electronic, electrical items and accessories which are essential for receiving and encryption of
direct to home services signals from EAPL, as a going concern, including all the assets and liabilities of EAPL
relating to the operations of the DTH equipment unit business for a total consideration of Rs. 5 lakhs, in addition
to the goodwill accruing on the transaction amounting to Rs. 4,511.78 lakhs which was capitalized as intangible
asset. The Company has also agreed to employ some of the employees engaged by EAPL for the operation of its
DTH equipment unit business.
Subscriber Agreement
The Company enters into a subscriber agreement with all its subscribers by which the Company provides the
DTH broadcasting services and other value added services which includes the supply of the viewing card (VC)
to the subscribers. The service provided to the subscriber is based on the subscription request/tariff plan selected
57
by the subscriber and the subscriber would be required to deposit an amount as deposit as security for value of
the VC provided to the subscriber.
The availability of the service to the subscriber is subject to applicable laws, transmission limitations, force
majeure, delay in payment of dues or fraud, wilful destruction by the subscriber among other things. The
Company provides a six month warranty on the VC, starting from the activation of the service. The use of the
service by the subscriber is limited to only one of the permitted viewing device, in ordinary case a television set.
The subscriber is also not permitted to indulge in piracy or other activites which may result in infringement of
intellectual property rights of the Company.
In terms of the agreement the subscriber is obligated to pay a minimum of Rs. 500 for each day if the subscriber
is in breach of the agreement. The agreement can be terminated on the occurrence of any breach of the
agreement by the subscriber or in the event the subscriber provides a written notice to the Company for
discontinuance of the service. Upon termination of the agreement, the Company would be returning the deposit
on the subscriber returning the VC to the Company.
Consignment Agreement
The Company enters into consignment agreement with its consignment agents for the distribution/movement of
the equipments required for providing DTH services, including set top box, dish along with LNB and other
accessories. The Company provides these equipments to the consignment agents on right to use basis and the
consignment agents are required to deliver such equipments to the subscribers, either directly or through dealers,
only on right to use basis and the Company would be the owner of such equipments at all times. The
consignment agents are required to store the equipments in good marketable conditions with full insurance
coverage. The consignment agents would be liable to pay the applicable taxes and would be required to
indemnify the Company against all tax related claims, demands and penalties raised or imposed on the Company
arising out of or in connection with the business effected by the consignment agent.
The Company in return of the services provided by the consignment agents would pay a fixed commission at a
rate mutually agreed by the parties. The agreement can be terminated by either party on a 30 days notice,
without providing any reason.
Distributor Agreement
The Company enters into distributor agreement, through which the Company appoints its authorized distributors
for a particular territory to stock, market and distribute the CPE and VC required for providing DTH services.
In terms of the distributor agreement, the distributors are required to keep sufficient stock of CPE and VC and
make them available to the authorized dealers of the Company, who would then supply the same to the end
users/subscribers. The distributors can not deal with any other Company or third party for acquisition of DTH
products. The Company would not be liable for any guarantee or representation made by the distributors in
addition to what has been offered by the Company. It is represented that the distributors are not agents or joint
venture partners of the Company.
The distributors are required to pay an interest free refundable security deposit of Rs. 10,000 to the Company,
such deposit would not be refundable for the first three years and the Company also reserves the right to
increase the security deposit. The distributors can not directly, indirectly engage in similar or competing
business of that of the Company during the tenure of the agreement and two years thereafter.
The Company would not be liable to the distributor for any damage or defect in the DTH equipments except to
the extent of the VC being defective within the six months warranty. The term of the agreement is for a period
of one year otherwise earlier terminated by the Company on account of certain terms including breach and
dissolution.
Dealer Agreement
The Company enters into dealer agreement, through which the Company appoints its authorized dealers for a
particular territory to promote, market, retail and sell the DTH broadcasting services at the premises of the
subscribers through installation of CPE, including supply of VC by the dealers on behalf of the Company and
also collect subscription and other fees from the subscribers on behalf of the Company. It is represented in the
58
agreement that the legal title and property in the VC would not be transferred to the dealers and/or to the
subscribers and the dealer is required to take care of the VC as the custodian/trustee of the Company.
The Company would pay the dealers a fixed rate of commission but the dealers would not be entitled to any
commission on renewal subscription and any other collection made by representatives of the Company or such
subscribers who were originally introduced by sales person/representatives/direct selling agents of the
Company.
The dealers are required to ensure maintaining adequate stock of VC and CPE and collection of refund of VC
security deposit and remit the same to the Company. It is the duty of the dealers to ensure that the Subcriber
Application Form (SAF) is duly filled by the subscribers and to supply VC and CPE at the premises of the
subscribers. The dealers are required to recover the VCs from the subscribers and deliver them back to the
Company upon the expiration or termination of the services.
The dealer is restricted from entering into any agreement with the subscribers with respect to DTH services. The
Company would not be liable for any guarantee or representation made by the dealers in addition to what has
been offered by the Company.
The dealer is required to pay an interest free refundable security deposit of Rs. 10,000 to the Company, such
deposit would not be refundable for the first three years and the Company also reserves the right to increase the
security deposit. The Company has also granted the right to use the logo of the Company to the dealer only to
the limited extent to benefit the business of the Company. The dealer can not directly, indirectly engage in
similar or competing business of that of the Company during the tenure of the agreement and two years
thereafter.
The Company would not be liable for any damage or defect in the DTH equipments except to the extent of the
VC being defective within the six months warranty. The term of the agreement is for a period of one otherwise
earlier terminated by the Company on account of certain terms including breach and dissolution.
Agreement between Integrated Subscriber Management Services Limited (“ISMSL”) and our Company dated
January 1, 2006 and addendum agreements thereto for providing middleware and other related services
In terms of the agreement, ISMSL would provide middleware (software for interactive services) and other
related services to the Company. The agreement is valid till December 31, 2010 unless mutually extended by
both parties.
Pursuant to an addendum agreement dated January 6, 2006 executed between ISMSL and the Company, it was
agreed that ISMSL would be entitled to Rs. 9 month per active subscriber. The payment would be made on the
basis of cumulative number of active subscribers as on the last date of each month. Further, the Company would
also reimburse for the services provided to other than active subscribers subject to a maximum of Rs. 10 lakhs
per month. This stipulation was thereafter further amended pursuant to an addendum agreement dated April 1,
2006 wherein it was provided that besides the payment mechanism stipulated in the agreement, the payment
shall be made to ISMSL on the basis of the Net Average Subscriber Base.
ISMSL has represented that it has obtained the requisite license from Open TV for middleware and that Open
TV has provided to ISMSL all necessary intellectual property licences or permissions to ISMSL necessary for
the provision of middleware. Both the parties have agreed to grant to each other a non-exclusive licence to use
their respective logo/trademark during the tenure of the agreement. The agreement has a confidentiality clause.
The agreement can be terminated by either party by giving a 45 days notice in writing to the other party. Any
dispute between the parties shall be resolved by arbitration in New Delhi under the Arbitration and Conciliation
Act, 1996.
Agreement between ISMSL and our Company dated January 1, 2006 and addendum agreements thereto for
providing Conditional Access Services (“CAS”)
In terms of the agreement, ISMSL would provide CAS, including but not limited to arranging viewing cards
which are compatible with the Company’s DTH platform, providing messaging services on viewing cards,
providing CAS services of Conax CAS version 7, ensuring delivery of provisioning request to the ‘SAS
Servers’, comparing the logs, developing and maintaining various software required for the proper
59
implementation of CAS services. The agreement is valid till December 31, 2010 unless mutually extended by
both parties.
Pursuant to an addendum agreement dated January 6, 2006 executed between ISMSL and the Company, ISMSL
would be entitled to Rs. 4 month per active subscriber of the Company’s DTH service. The payment would be
made on the basis of cumulative number of active subscribers as on the last date of each month. Further, the
Company would also reimburse for integration of middleware with CAS services subject to a maximum of Rs. 4
lakhs per month. This provision was further amended and pursuant to an addendum agreement dated January 1,
2007, Company would reimburse a maximum of Rs. 30 lakhs per month for the integration of middleware with
CAS services.
ISMSL has represented that it has obtained the requisite license from Conax for Conex CAS 7 version with
regard to broadcasting services and that Conax has provided to ISMSL all necessary intellectual property
licences or permissions to ISMSL necessary for the provision of CAS services.
Both the parties have agreed to grant to each other a non-exclusive licence to use their respective logo/trademark
during the tenure of the agreement. The agreement has a confidentiality clause. The agreement can be
terminated by either party by giving a 45 days notice in writing to the other party. Any dispute between the
parties shall be resolved by arbitration in New Delhi under the Arbitration and Conciliation Act, 1996.
Agreement between ISMSL and our Company dated January 1, 2006 and addendum agreements thereto for
providing call-center services
In terms of the agreement, ISMSL would provide call-center services, including but not limited to providing
telephone services for answering customer enquiries, preparation of call handling scripts, pre-approving the
number of personnel to be hired, preparing and implementing staffing guidelines, purchasing and maintaining in
good operating conditions the necessary telephony equipments. The agreement is valid till December 31, 2010
unless mutually extended by both parties.
Pursuant to an addendum agreement dated January 6, 2006 executed between ISMSL and the Company, ISMSL
would be entitled to Rs. 7 per month per active subscriber of the Company’s DTH service. The payment would
be made on the basis of cumulative number of active subscribers as on the last date of each month. Further,
pursuant to an addendum agreement dated April 1, 2006, Company would reimburse a maximum of Rs. 50
lakhs per month for call center services provided to other than the active subscribers.
Both the parties have agreed to grant to each other a non-exclusive licence to use their respective logo/trademark
during the tenure of the agreement. The agreement has a confidentiality clause.
Pursuant to an addendum agreement dated July 1, 2006 executed between the parties, the Company has been
authorised to appoint or authorise any third party to prove call center services as per the terms of this agreement.
Such third party, would however, need to comply with the terms and conditions of this agreement. The
Company shall reimburse ISMSL all the expenses, of whatever name, which ISMSL would incur for providing
the call center services to the Company through such third party.
The agreement can be terminated by either party by giving a 45 days notice in writing to the other party. Any
dispute between the parties shall be resolved by arbitration in New Delhi under the Arbitration and Conciliation
Act, 1996.
Agreement between Wire and Wireless (India) Limited and our Company for providing HITS services
Our Company has entered into an agreement dated May 1, 2008 with Wire and Wireless (India) Limited, one of
our Group Companies, whereby our Company has agreed to provide HITS digital services to Wire and Wireless
(India) Limited for distribution thereof to the Multi System Operators, Local Cable Operators and/or subscribers
within India for a consideration as may be mutually agreed between both parties. Upon any delay in the payment
of such consideration, our Company shall be entitled to charge Wire and Wireless (India) Limited an interest at
12% per annum.
As per the agreement, neither party may assign any rights or benefit under the agreement, without the prior
consent of the party. Also, each party shall indemnify the other for any actions or claims (other than loss of
prpofit or business losses) relating to transactions contemplated under the agreement.
60
The agreement is valid from May 1, 2008 to April 30, 2010 and is renewable on such terms and conditions as
may be agreed between the parties.
Financial and Strategic Partners
Financial Partners
Our Company has no financial partners.
Strategic Partners
Our Company has no strategic partners.
61
DIVIDEND POLICY
We have not declared any dividends in the past and our Company does not have any dividend policy, as on date
of filing of this Letter of Offer. The declaration and payment of dividend will be recommended by our Board of
Directors and approved by our shareholders at their discretion and will depend on a numbr of factors, including
but not limited to, our profits, capital requirements and overall financial conditions. The Board may also from
time to time pay interim dividend. All dividend payments will be made in cash to the shareholders of our
Company.
62
MANAGEMENT
Board of Directors
Under our Articles of Association we cannot have less than three directors and not more than 12 directors. We
currently have seven directors, our Chairman is a non-executive director, in addition to that we have one
executive Director, one non-executive and four non-executive independent Directors. As our chairman is a nonexecutive Director and more than half of our Board consists of non-executive independent directors, we are in
compliance with clause 49 of the listing agreement, as applicable.
At present, the Board of our Company comprises of the following persons:
Sr.
No.
1.
Name, Designation, Father’s
name, Address, DIN no. and
Occupation
Mr. Subhash Chandra
Nationality
Indian
Age
(years)
Other Directorships in companies
58
Chairman, Non-Executive Director
S/o Mr. Nand Kishore Goenka
Flat 4, 1 Hyde Park Street,
Paddington, London, W2 JW,
United Kingdom.
DIN: 00031458
Occupation: Industrialist
Term: Liable to retire by rotation
2.
Indian
53
Managing Director
S/o Mr. Nand Kishore Goel
Nand Tara, 22 Oak Drive,
Sultanpur, Mehrauli,
New Delhi 110 030,
India.
DIN: 00076462
Occupation: Industrialist
Term: January 6, 2007 to January 6,
2010
3.
Indian
63
Non-Executive Director,
S/o Sardar Gurdit Singh Narang
Flat No. 29, Ground Floor, ‘F’
Block, DDA Apartments, SES
(Near Market), Sheikh Sarai, Phase
I, New Delhi 110 017, India.
DIN No. 00038052
Occupation: Professional
63
Limited
Essel
Infraprojects
Limited
(formerly, Pan India Paryatan
Limited)
Essel Propack Limited
Zee Multimedia Worlwide BVI
Asia Today Limited
Agrani
Holdings
(Mauritus)
Limited
Zee News Limited
United News of India
Adhikaar Foundation
New Media Broadcast Private
Limited
Aplab Limited
Asian Sky Shop Limited
East India Trading Company
Limited
Essel International Limited
Essel
Infraprojects
Limited
(formerly, Pan India Paryatan
Limited)
Rankay Investment and Trading
Company Limited
Indian Broadcasting Foundation
United News of India
Chiripal Industries Limited
Shivam Autotech Limited
IST Steel and Power Limited
Jubilee Hill Landmark Projects
Limited
Shri VeniMadhav Portfolio Private
Limited
Afcon Infrastructure Limited
VA Tech Wabag Limited
Amar Ujala Publications Limited
Sr.
No.
4.
Occupation
Mr. Arun Duggal
Nationality
Indian
Age
(years)
61
S/o Mr. Sundari Lal Duggal
A-4, 3rd Floor, West End Colony,
New Delhi 110 021, India.
DIN No. 00024262
Occupation: Professional
5.
Dr. Pritam Singh
Indian
66
Indian
58
Zurai Industries Limited
Patni Computer Systems Limited
Shriram
Transport
Finance
Company Limited
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Fil Fund Management Private
Limited
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Company Private Limited
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Private Limited
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Private Limited
The Bellwhether Micro Finance
Fund Private Limited
Manipal AcuNova Limited
Mundra
Port
and
Special
Economic Zone Limited
Shriram City Union Finance
Limited
Sriram EPC Limited
Motrice Limited
Hero Honda Motors Limited
Parsvnath Developers Limited
S/o Ram Dev Singh
House No. A2/14, PWO Complex,
Plot No. 1A, Sector 43, Gurgaon
122 001, Haryana, India.
DIN No. 00057377
Occupation: Academician
6.
S/o Mr. Vanchittil Pothen Kurien
252-Tahnee Heights Co-oerative
Housing Society, D – Building,
Petit Hall, 66 Nepeansea Road,
Mumbai 400 006, India
DIN: 00034035
Occupation: Business
64
Ambience
Business
Services
Private Limited
Hanmer
and
Partners
Communications Private Limited
Docasia.Com
India
Private
Limited
Publicis Ambience Advertising
Private Limited
Publicis (India) Communication
Private Limited
Solution Integrated Marketing
Services Private Limited
TF Conferences Private Limited
LFP Services Private Limited
Yo4ya Digital Private Limited
Pridigitas
Marketing
Private
Limited
Limited
Sr.
No.
Occupation
Nationality
Age
(years)
7.
USA
37
S/o Mr. Louis Zinterhofer
Asia TV Limited
Capital
Advertising
Limited
Remindo Inc.
Flora 2000 Inc.
Affinion Group Inc.
Central
European
Enterprises
iPCS Inc.
Unity Media, GMBH
Private
Media
660 Park Avenue, New York, N.Y.
10021, U.S.A
DIN: 01929446
Occupation: Service
8.
Mr. Mintoo Bhandari
Alternate Director to Mr. Eric Louis
Zinterhofer
USA
43
AGM India
Limited
Advisors
Private
8th Floor, Kubelisque, Nargis Dutt
Road, Bandra(W), Mumbai – 400
050, India
DIN: 00054831
Occupation: Service
Except, Mr. Jawahar Lal Goel and Mr. Subhash Chandra who are brothers, no Director is related to any other
Director on the Board.
Details of Directors:
Mr. Subhash Chandra, Chairman of our Company, has been the recipient of numerous honorary degrees,
industry awards and civic honors, including being named 'Global Indian Entertainment Personality of the Year'
by FICCI for 2004, 'Business Standard's Businessman of the Year' in 1999, 'Entrepreneur of the Year' by Ernst
& Young in 1999 and 'Enterprise CEO of the Year' by International Brand Summit. The Confederation of Indian
Industry (“CII”) chose Mr. Chandra as the Chairman of the CII Media Committee for two successive years.
He has set up TALEEM (Transnational Alternate Learning for Emancipation and Empowerment through
Multimedia), an organisation which seeks to provide access to quality education and to promote research in
various disciplines relating to health and family life, social & cultural anthropology, communication and media.
He is also the trustee for the Global Vippassana Foundation, a trust set up for helping people in spiritual
upliftment.
Mr. Jawahar Lal Goel, Managing Director, heads the business of our Company. He has been one of the
pioneers of the DTH services in India and instrumental in establishing Dish TV as a recognized brand in India.
Mr. Goel is also the acting president of Indian Broadcasting Foundation which takes up various issues relating
to broadcasting industry at various forums. He is an active member on the board of various committees and task
force set up by Ministry of Information and Broadcasting, Government of India pertaining to several matters
relating to the industry. He played a vital role in conceptualizing and establishing Siti Cable Network Limited as
a multi system operator for cable distribution network of various television channels in India in 1994.
65
He has been the trustee of the Agroha Vikas Trust for more than decade. He is also the trustee of the Delhi
chapter of the trust, which undertakes a number of noble social causes including the building and running of
colleges, schools and temples.
Mr. Bhagwan Dass Narang, has an experience of 32 years in field of banking. He was the chairman and
Managing Director of Oriental Bank of Commerce and was also the alternate chairman of the committee on
banking procedures set up by Indian Banks Association for the year 1997-98. He has also chaired panels on
Serious Financial Frauds appointed by the RBI and financial construction industry appointed by Indian Bank’s
Association. He was also appointed as the chairman of the governing council of National Institute of Banking
Studies and Corporate Management and was elected as member of the management committee of the Indian
Bank’s Association. He had been a member of the Advisory Council of Bankers Training College, Mumbai. He
was also elected as the deputy chairman of Indian Banks Association, Mumbai and was the recipient of Business
Standard “Banker of the year Award for 2004”.
Mr. Arun Duggal, an experienced international banker, has a degree of mechanical engineering from the the
Indian Institute of Technology, Delhi and holds a Post Graduate Diploma in Management from the Indian
Institute of Management, Ahmedabad. He also teaches banking and finance at the Indian Institute of
Management, Ahmedabad as a visiting professor. Mr. Duggal is an international advisor to a number of
corporations, major financial institutions and private equity firms. He is the non executive Vice-Chairman of
International Asset Reconstruction Company Private Limited.
He is a founder director of Bellwether Microfinance Fund which provides equity capital to promising micro
finance organizations and helps them in capacity building. He is also the Vice-Chairman of Transparency
International India, which is undertaking a number of initiatives to combat corruption problems in India. Mr.
Duggal is also involved with a number of environmental projects.
Dr. Pritam Singh, is a recipient of Padma Shri award from the President of India, in the year 2003. He is a well
known academician in the field of management studies and has authored several books and research papers. He
holds a masters degree in commerce from Banaras Hindu University, Varanasi and a masters degree in business
administration. He has also a qualified doctorate from Banaras Hindu University, Varanasi. Additionally, Mr.
Singh has also initiated several social projects involving issues on healthcare, education, water management and
road building.
Mr. Ashok Mathai Kurien, started Ambience Advertising Private Limited in 1987. He is now the chairman of
Ambience Publicis, Publicis India and Solutions-Publicis India. He is a founder-director of Zee Entertainment
Enterprises Limited, which was successfully launched in the year 1992. Mr. Kurien is also the marketing and
strategic advisor to Playwin, India’s first online lottery business and one of the founder-partner and Chairman of
Hanmer & Partners, Public Relations, which are among one of the reputed public relations agencies.
Mr. Eric Louis Zinterhofer, is a graduate-cum-laude from the University of Pennsylvania, with degrees of
bachelors of honors in Economics and European History and has qualified his masters in business administration
from the Harvard Business School. He was a member of the Structured Equity Group at J.P Morgan Investment
Management from 1993 to 1994 and then he joined as a member of the Corporate Finance Department at
Morgan Stanley Dean Witter & Company. Mr. Zinterhofer is presently with the Apollo Group which he joined
in the year 1998. He is currently on the board of Affinion Group, Inc., Central European Media Enterprises,
iPCS, Inc. and Unity Media SCA.
Mr. Mintoo Bhandari, is a partner at Apollo Management responsible for the development and oversight of
transactions relating to India. Prior to Apollo, Mr. Bhandari was Managing Director of The View Group, an
India-focused private equity firm. He was an early participant in the sourcing, execution and development of
transactions and enterprises which leveraged operating resources in India and has been integrally involved with
approximately twenty such transactions, several of which were pioneering in their structure, strategy and timing.
Mr. Bhandari was also previously a member of the private equity team and later a manager of hedge fund capital
at the Harvard Management Company which manages the endowment of Harvard University. Mr. Bhandari
graduated with an S.B in Mechanical Engineering from MIT and with an MBA from the Harvard Business
School.
Compensation of our Directors
66
The following tables set forth all compensation fixed by us to pay to our Directors for the Fiscal 2008.
A.
Non-Executive Directors
Name of Director
Commission
Amount (Rs.)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Mr. Subhash Chandra
Mr. Arun Duggal
Dr. Pritam Singh
Mr. Mintoo Bhandari*
Sitting Fees per Board meeting
Amount (Rs.)
10,000
10,000
10,000
10,000
10,000
10,000
10,000
*Alternate Director to Mr. Eric Louis Zinterhofer
B.
Executive Director
The remuneration package of Mr. Jawahar Lal Goel fixed for the Fiscal 2008, is as follows:
S.No.
Particulars
Amount (in Rs.)
1.
Basic Salary
24,00,000
2.
House Rent Allowance
12,00,000
3.
Personal Allowance
15,81,000
4.
Provident Fund Contribution
2,88,000
5.
Leave Travel Allowance
2,40,000
6.
Medical Reimbursement
15,000
Total
57,24,000
In addition Mr. Goel is entitled for a Company maintained car, salary of the driver, fuel charges, residence
telephone and also gratuity, leave encashment and other perquisites as per the rules of our Company.
Shareholding of Our Directors in our Company
The following table details the shareholding of our Directors in their personal capacity and either as sole or first
holder, as at the date of this Letter of Offer.
Name of Directors
Number of Equity Shares
(Pre-Issue)
5,00,000
Nil
Nil
Nil
Nil
11,74,150
Nil
Nil
Mr. Subhash Chandra
Mr. Arun Duggal
Dr. Pritam Singh
% of the Pre Issue share capital
0.12
Nil
Nil
Nil
Nil
0.27
Nil
Nil
*Alternate Director to Mr. Eric Louis Zinterhofer
Stock options held by our Directors
Name of Directors
Number of Options granted
Mr. Arun Duggal
Dr. Pritam Singh
7,500
7,500
7,500
7,500
Changes in Our Board of Directors during the last three years
Name of the Director
Date of Appointment
67
Date ofResignation
Reason
Mr. Ashok Goel
April 24, 1995
January 6, 2007
Mr. C. Rajgopalan
June 1, 1995
January 6, 2007
Mr. Subhash Chandra
August 9, 1995
Mr. Laxmi Narian Goel
April 24, 1995
January 6, 2007
Mr. Punit Goenka
April 1, 1998
January 6, 2007
Mr.Atul Goel
December 17, 2003
June 28, 2004
January 6, 2007
January 6, 2007
January 6, 2007
Mr. Arun Duggal
January 6, 2007
Dr. Pritam Singh
April 27, 2007
October 22, 2007
October 3, 2008
Appointment
*He was appointed as an Alternate Director to Mr. Eric Louis Zinterhofer
Resignation
Resignation
Appointment
Resignation
Resignation
Resignation
Appointment
Appointment
Appointment
Appointment
Appointment
Appointment
-
CORPORATE GOVERNANCE
Our Company is in compliance of the provisions in respect of corporate governance as stipulated in the listing
agreements with the Stock Exchanges, including in respect of appointment of independent directors in the Board
and the constitution of various committees as detailed below.
Various Committees of Directors:
There are three Board level committees in our Company, which have been constituted and function in
accordance with the relevant provisions of the Act and the Listing Agreement. These are (i) Audit Committee,
(ii) Share Transfer and Investor Grievances Committee, and (iii) Remuneration Committee. A brief on each
Committee, its scope, composition and meetings for the current year is given below:
(i)
Audit Committee
Members
1
Independent Director (Chairman)
2
Mr. Arun Duggal
3
Dr. Pritam Singh
Scope and terms of reference
1.
2.
3.
4.
5.
Oversight of Company’s financial reporting process and disclosure of its financial information to
ensure that the financial statement is correct, sufficient, accurate, timely and credible.
Review with the management, the quarterly financial statements before submission to the Board for
approval.
Review with management the annual financial statements before submission to the board, focusing
primarily on:
a.
Any changes in accounting policies and practices.
b.
Major accounting entries based on exercise of judgment by management.
c.
Qualifications in draft audit report.
d.
Significant adjustments arising out of audit findings.
e.
The going concern assumption.
f.
Compliance with listing and other legal requirements relating to financial statements.
g.
Compliance with accounting standards with material departures therefore.
h.
Compliance with listing and legal requirements concerning financial statements.
i.
Proper maintenance of accounting records.
j.
Debtors, receivable and Agewise analysis, write off and provisioning with reference to the
Report of the finance committee.
k.
Matters required to be included in the Director’s Responsibility Statement to be included in
the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
Review of Management discussion and analysis of financial condition and results of operations on
yearly basis.
Related Party Transactions (on quarterly basis):-
68
a.
b.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
To review the statements of Significant related party transactions (to be decided by Audit
Committee).
Disclosure of related party transaction to the Audit Committee:
i.
A statement in summary form of transactions with related parties in the ordinary
course of business shall be placed periodically before the audit
committee.
ii.
Details of material individual transactions with related parties, which are
not in the normal course of business, shall be placed before the audit
committee.
iii.
Details of material individual transactions with related parties or others,
which are not on an arm’s length basis, should be placed before the audit
committee, together with Management’s justification for the same.
Review the company’s financial and risk management policies on quarterly basis.
Review with the management, external and internal auditors, the adequacy of internal control systems
including computerized information system controls and security.
The Audit Committee of the listed holding company shall also review the financial statements of
subsidiary companies, in particular, the investments made by the unlisted subsidiary company. (Audit
committee to set up the details of subsidiaries to be placed and system of review).
Recommend to the Board the appointment, reappointment and removal of the statutory auditor, fixation
of audit fee and approval of payment of fees for any other services.
Discussion with external auditors before the audit commences about nature and scope of audit as well
as post audit discussion to ascertain any area of concern and internal control weaknesses observed by
the Statutory Auditors.
Review of appointment, removal and terms of reference of Chief Internal Auditor.
Review the adequacy of internal audit function, including the structure of the internal audit department,
staffing and seniority of the official heading the department, reporting structure coverage and frequency
of internal audit.
Discussion of Internal Audit Reports with internal auditors and significant findings and follow up there
on and in particular Internal Control weaknesses.
Review the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularly or a failure of internal control systems of a material nature and reporting
the matter to the board.
Status of pending litigations filed by and against the company should be placed before the Audit
Committee with their likely financial implications, which could have effect on working of the
company.
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors.
To review the functioning of Whistle Blower mechanism, in case the same is existing.
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Powers of Audit Committee
1.
2.
3.
4.
To investigate any activity within its terms of reference.
To seek information from any employee.
To obtain outside legal or other professional advice.
To secure attendance of outsiders with relevant expertise, if it considers necessary.
(ii)
Share Transfer and Investor Grievances Committee
Members
1
Non-Executive Director (Chairman)
2
Executive Director
Scope and Terms of Reference
1.
2.
3.
To approve transfer of shares.
To look into the redressal of shareholders and investors complaints.
To provide information to shareholders
69
(iii)
Remuneration Committee
Members
1
Independent Director (Chairman)
2
Mr. Arun Duggal
3
Dr. Pritam Singh
Scope and Terms of Reference
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Decide on the elements of remuneration package of all the Executive Directors, CEO, CFO and senior
managerial positions directly reporting to the CEO;
Approve recruitment, dismissal, promotion, increments, rewards, compensation, and succession at
empowered levels.
Formulate and implement Employee Stock Option and/or other incentive programmes;
Formulate human resources plans and policies, including recruitment, compensation, career and
succession planning at empowered levels and human resource development plans;
Secondments / loaning of services of managers to and from the subsidiary / associate companies;
Formulation of Policy on Housing / other loans to staff and Management;
Guidelines for foreign travel and overseas developmental programmes;
Nominations of Company representatives on the Board of other companies (including permission to
Company Managers to accept Directorship in other companies.);
Approval of Organisational structure, covering all management positions for various functions within
the organization;
Policy for appointment of consultants and/or retainers (i.e. Approve appointment/extension of
individuals for fixed periods of time as retainers and consultants with functional specialism)
Recommend to the Board, compensation and other terms and conditions of service of Board members;
Advising on capability building areas and devising employees and senior managerial development
strategies
The Board has also constituted an Issue Committee by way of its resolution dated April 24, 2006. The Issue
Committee comprises Mr. Jawahar Lal Goel, Mr. Bhagwan Dass Narang and Mr. Ashok Mathai Kurien. The
Issue Committee is authorized to take all decisions relating to the Issue and do all such acts and things as may be
necessary and expedient for, incident and ancillary to, the Issue.
Mr. Jawahar Lal Goel, Mr. Rajeev K. Dalmia and Mr. Jagdish Patra has been authorized by the Board to sign ad
execute all documents on behalf of the Company, Board and the Issue Committee.
Key Managerial Personnel
The following are our key managerial employees. All of our key managerial employees are permanent
employees of our Company:
Mr. Vinay Aggarwal, aged 53 years, is the Chief Executive Officer of our Company. Mr. Aggarwal holds a
bachelor’s degree in technology with specialization in electronics with computer science from the Indian
Institute of Technology, Kanpur and Post Graduate Diploma in Management with specialization in marketing
and corporate planning from the Indian Institute of Management, Kolkata. He has an aggregate work experience
of over 26 years in the industry. Prior to joining us, he was been associated with Grindwell Norton Limited, as
its President-Abrasives. He has also served as the Managing Director of RPG Cables Limited and RPG Mobile
Services Limited. He was the Chief Operating Officer of BPL Mobile Cellular Limited for three years. He has
also been associated with SRF group, Tata Consultancy Services, the Usha Rectifier group, Prime Consultants
Private Limited and Blow Plast Limited. He has been the President of Ball and Roller Bearing Manufacturers’
Association of India during 1999-2000 and its Vice President during 1997-1999. He joined our Company in
June 2008.
Mr. Salil Kapoor, aged 40 years, is the Chief Operating Officer of our Company. He is responsible for sales,
marketing, service and overall supervision of the zonal offices of our Company. Mr. Kapoor holds a bachelor of
engineering from Bangalore University and masters in business administration from University of Delhi. His
aggregate work experience of over 18 years in the industry. He was associated with Samsung India Electronics
70
Limited as its National Sales Head, Microsoft Corporation India (Private) Limited, LG Electronics India
(Private) Limited, Blue Star Limited and Fedders Llyod Limited. He joined our Company in July 2008.
Mr. Amitabh Kumar, aged 55 years, is the President-Technology of our Company. He is responsible for
broadcasting operations of our Company. Mr. Kumar holds a professional certificate in electronic data
interchange from All India Management Association and Deakin University, Australia. He also holds a bachelor
degree in electronics and telecom from Birla Institute of Technology, Pilani. He has also been a council member
of the Commonwealth Telecom Organisation, London. Mr. Kumar has an aggregate work experience of 31
years in the telecom industry. He was acting Chairman-cum-Managing Director of Tata Communications
Limited (formerly known as Videsh Sanchar Nigam Limited). Prior to joining us on January 19, 2007, he was
previously employed with NEENL as the director - corporate and Mr. Kumar joined us under the Scheme of
Arrangement. The remuneration paid to him for the Fiscal 2008 was Rs. 54.77 lakhs.
Mr. Rajiv Khattar, aged 44 years, is the President-Projects of our Company. He is responsible for strategic tieups and technology upgrades of the DTH platform. He also handles the regulatory aspects of the business. Mr.
Khattar holds a diploma in business management from Rajendra Prasad Institute of Communications and
Management, New Delhi and a diploma in products engineering from G.B. Pant Polytechnic, New Delhi. He
holds a diploma in materials management from National Productivity Council, Faridabad. Mr. Khattar has an
aggregate work experience of 20 years and experience of 12 years in the telecom industry. Prior to joining us on
September 1, 2005, he was employed with Reliance Infocom Limited as the president for Netway. The
remuneration paid to him for the Fiscal 2008 was Rs. 56.45 lakhs.
Mr. Rajeev K. Dalmia, aged 44 years, is the Chief Financial Officer of our Company. He is responsible for
maintaining finance and accounts of our Company. He is a qualified fellow chartered accountant from the
Institute of Chartered Accountants of India. Mr. Dalmia has an overall work experience of 20 years. Prior to
joining us on September 1, 2005, he was employed with South Asian Petrochem Limited as the senior VicePresident, finance. The remuneration paid to him for the Fiscal 2008 was Rs. 56.98 lakhs.
Mr. Jagdish Patra, aged 38 years, is the Company Secretary and Compliance Officer of our Company. He is
responsible for the secretarial and statutory compliances of our Company. He is a qualified company secretary
and fellow member of the Institute of Company Secretaries of India. He also holds a bachelors degree of law
from Utkal University. Mr. Patra has an overall experience of 13 years. Prior to joining us on February 22, 2007,
he was employed with Allied Domecq Spirits and Wines India Private Limited as the head of legal department
and company secretary. The remuneration paid to him for the Fiscal 2008 was Rs. 14.51 lakhs.
Bonus or Profit Sharing Plan for our senior management
There is no bonus or profit sharing plan for our senior management.
Management Organizational Structure Chart
Board of
Directors
MD
President Projects
CEO
Head HR
Sr VP Sales
ZH –
Mumbai
ZH – Other
Zones
VP –
Marketin
g
CFO
VP Service
DVP Comml
Sr .Mgr Legal
Head Collection
s
71
VP Sales
Director Technical
VP –
Opern
Company
Secretary
CTO
Admin
Shareholding of key managerial personnel in our Company
Name of Key Managerial Personnel
No. of Equity Shares held
(Pre-Issue)
Nil
Nil
Nil
Nil
Nil
Nil
Mr. Vinay Aggarwal
Mr. Salil Kapoor
Mr. Amitabh Kumar
Mr. Rajiv Khattar
Mr. Rajeev K. Dalmia
Mr. Jagdish Patra
Interest of Promoters, Directors and key managerial personnel
Except as stated in “Notes to Risk Factors- Related Party Transactions” on page xxix of this Letter of Offer, and
to the extent of shareholding in our Company, our promoters and promoter group do not have any other interest
in our business.
All of our Directors may be deemed to be interested to the extent of fees, if any, payable to them for attending
meetings of the Board or a Committee. The Managing Director is interested to the extent of remuneration paid
to him for services rendered by him as officer of the Company. All our Directors may also be deemed to be
interested to the extent of Equity Shares and stock options granted to them under the ESOP Scheme, if any,
already held by them or their relatives in the Company, or that may be subscribed for and allotted to them, out of
the present Issue in terms of the Letter of Offer and also to the extent of any dividend payable to them and other
distributions in respect of the said Equity Shares. The Directors may also be regarded as interested in the Equity
Shares, if any, held by or that may be subscribed by and allotted to the companies, firms and trust, in which they
are interested as directors, members, partners and/or trustees.
The key managerial personnel of our Company do not have any interest in our Company other than to the extent
of the remuneration or benefits to which they are entitled to as per their terms of appointment and
reimbursement of expenses incurred by them during the ordinary course of business or to the stock options
granted to them under the ESOP Scheme and to the extent of the Equity Shares held by them in our Company, if
any.
Except as stated otherwise in this Letter of Offer, we have not entered into any contract, agreement or
arrangement in which our Directors are interested directly or indirectly and no payments have been made to
them in respect of these contracts, agreements or arrangements or are proposed to be made to them. Our
Directors and our key managerial personnel have not taken any loan from our Company.
Changes in our key managerial employees in the last three years.
Name
Designation
Date of Change
Reason
Mr. Rajendra Singhvi
Chief Financial Officer
February 1, 2006
Appointment
Mr. Sunil Khanna
Chief Executive Officer
August 16, 2006
Resigned
Mr. Arun Kapoor
November 1, 2006
Appointment
Managing Director
January 1, 2007
Appointment
Mr. Rajeev K Dalmia
January 5, 2007
Appointment
Mr. Ranjit Singh
Company Secretary
April 27, 2007
Resignation
Mr. Jagdish Patra
Company Secretary
April 27, 2007
Appointment
Mr. Rajendra Singhvi
March 24, 2007
Resigned
Mr. Arun Kapoor
April 30, 2008
Resigned
Mr. Vinay Aggarwal
June 23, 2008
Appointment
Mr. Salil Kapoor
Chief Operating Officer
July 2, 2008
Appointment
72
PROMOTERS
Our Promoters
Our Promoters who are individuals are: (i) Mr. Subhash Chandra, (ii) Mr. Laxmi Narain Goel, (iii) Mr. Ashok
Goel, (iv) Mr. Ashok Mathai Kurien and (v) Ms. Sushila Goel
Our Promoters who are companies are (i) Veena Investment Private Limited, (ii) Delgrada Limited, (iii) AfroAsian Satellite Communications Limited, (iv) Jayneer Capital Private Limited, (v) Churu Trading Company
Private Limited, (vi) Ganjam Trading Company Private Limited, (vii) Premier Finance & Trading Company
Limited, (viii) Prajatma Trading Company Private Limited, (ix) Lazarus Investments Limited, (x) Briggs
Trading Company Private Limited (xi) Essel Infraprojects Limited (formerly, Pan India Paryatan Limited) and
(xii) Ambience Business Services Private Limited .
Mr. Subhash Chandra
Identification
PAN
Passport No.
Bank Account Number(NRO Account SBIMumbai)
Details
AACPC4004A
F9137504
10783156452
For further details please refer to ‘Management - Details of Directors’ on page 65.
Mr. Laxmi Narain Goel, age 56 years, is one of the key architects of the Essel Group
of companies. He started his career in 1969 trading agro commodities and established
Rama Associates Limited along with his brothers. In 1980, he diversified Essel Group’s
activities into handicraft exports and real estate development business. He has
contributed enormously in the establishment and progress of Essel Propack Limited. At
present, Mr. Goel holds the position of Vice Chairman of the Essel Group of companies
and is actively involved in the day-to-day developmental activities of the Essel Group.
He has been the trustee of the Agroha Vikas Trust for more than decade. He is also the
trustee of the Delhi chapter of the trust, which undertakes a number of noble social causes including the building
and running of colleges, schools and temples. Mr. Goel was head of affairs of the Sewak Sabha Hospital, Hissar,
Haryana, for two years.
Identification
Details
PAN
Passport No.
Bank Account Number
AAEPG2531Q
E3948809
003101530569
Mr. Ashok Goel, 47 years, is a commerce graduate. He was instrumental in establishing
Essel Propack Limited as a global player in laminated tubes and making it one of top
companies in laminated tubes business in the world. He is currently the Vice Chairman &
Managing Director of Essel Propack Limited. Mr. Goel is also president of Organisation of
Plastic Processors of India and also a member of the Managing Committee of Paper, Film
& Foil Converters’ Association of India. In July 2005, The Smart Manager, rated Mr.
Ashok Kumar Goel as “one of the 25 truly world class managers from India”.
Identification
Details
PAN
Passport No.
Bank Account Number
AAEPG2528F
F7772183
000401540779
73
Identification
Details
PAN
Passport No.
Bank Account Number-HSBC
AADPK4942J
E8452601
019600634001
For further details please refer to ‘Management - Details of Directors’ on page 65.
Ms. Sushila Goel, age 48 years, is wife of Mr. Jawahar Lal Goel. She has been closely
associated with Agroha Vikas Trust since a decade. She is also associated with various other
social organizations, which are running hospitals, colleges, schools and temples in Delhi.
Identification
Details
PAN
Passport No.
Bank Account Number
AATPD5221B
E1495959
153000100077704
Details of the Promoters who are companies are as follows:
Veena Investments Private Limited, (company registration No: U65990MH1972PTC016137, permanent
account no: AAACV6436A, bank account no: 039305000262) was incorporated as a private company under the
Companies Act, on November 22, 1972. Its registered office is situated at New Prakash Cinema Building, N M
Joshi Marg, Delai Road, Lower Parel, Mumbai 400 013. It carries on the business of finance, trading and
investments.
Directors
1.
2.
Mr. Chhajuram Chaudhary and
Mr. Ashok Kumar Goel.
Financial Performance
The audited financial results of the company for the Financial Years ended 2008, 2007 and 2006 are set forth
below:
(Rs. in Lakhs except for share data)
Particulars
Total Income
Profit after Tax
Equity Share Capital (Par value Rs. 100 per share)
Reserves & Surplus
Earnings per share (Rs.)
Book Value per share
As at and for the
year ended March
31, 2008
48.5
37.6
4.0
(83.3)
938.88
(1,983.00)
As at and for the
year ended
March 31, 2007
73.2
61.0
4.0
(120.9)
1,518.62
(2,921.88)
As at and for the
year ended March
31, 2006
55.8
41.2
4.0
(18.16)
1,030.06
(4,440.51)
Shareholding
Name of Shareholder
No. of Shares
Mr. Ashok Goel
Ms. Tara Devi
Total
450
100
100
250
1500
1600
4,000
Percentage of
shareholding (%)
11.25
2.50
2.50
6.25
37.50
40.00
100.00
The company being a private limited company, its shares are not listed on any stock exchange. It has not
74
become a sick company under the meaning of SICA, is not under winding up. It has negative net worth.
There have been no overdue/ defaults to any banks/ financial institutions.
There has been no change in the management of the company since its incorporation.
Delgrada Limited (Permanent Account no: AABCD7273Q, Bank Account no. 01-201-10054-00) is a company
incorporated in Maurtius on April 7, 2000. Its registered office is situated at 10, Frere Felix de Valois Street,
Port Louis, Mauritius. It carries on the business of investments.
Directors
1.
2.
Mr. Deepak Jain and
Mr. Uday Gujadhur.
The audited financial results of the company for the financial years ended December 31, 2007, December 31,
2006 and December 31, 2005 are set forth below:
(Amount converted into INR (Lakhs) )
Particulars
Total Income
Profit after Tax
Reserves & Surplus
Earnings per share
As at and for the
year ended
December 31, 2007
1,668.68
42,383.70
0.0004
2,50,589.48
2,50,589
As at and for the
year ended
December 31, 2006
849.32
99.76
0.0004
3,26,123.56
3,26,123.56
As at and for the
year ended
December 31, 2005
1,745.17
1,689.97
0.0004
2,24,073.59
2,24,073.59
Shareholding
Name of Shareholder
Erith International Limited
No. of Shares held
% of Holding
1
100
Its shares are not listed on any stock exchange.
There has been no change in the management of the company since its incorporation
Afro-Asian Satellite Communications Limited, (Company Registration No: 12462/696, Permanent Account
no: NA, Bank Account no: 010031010468) was incorporated on March 23, 1994. Its registered office is situated
at Suite 308, St James Court, St Denis Street, Port Louis, Mauritius. It carries on the business of investments.
Directors
The board of directors of the company comprises Mr. Deepak Jain, Mr. Denis Sek Sum and Mr. Francois Yune
Kim.
The audited financial results of the company for the Fiscal Years ended March 31, 2008, March 31, 2007 and
March 31, 2006 are set forth below:
(Amount converted into INR (lakhs))
Particulars
Total Income
As at and for the
year ended March
31, 2008
0
75
As at and for the
year ended March
31, 2007
0
As at and for the
year ended March
31, 2006
0
Profit after Tax
Reserves & Surplus
Earnings per share
(2.03)
32.36
(14,174.47)
(0.17)
(2.83)
32.36
(14,170.09)
(0.17)
(2.63)
32.36
(14,167.29)
(0.17)
Shareholding
Name of Shareholder
Garron Limited
Granilo Holding BV (GH)
No. of Shares held
% of Holding
73,902
7,200
91.12
8.88
Jayneer Capital Private Limited (company registration No: U61190MH1986PTC039204, permanent account
no: AAACG1688G, bank account no: 039305000186) was incorporated as a private company under the
Companies Act, in the name of Jayneer Consultant Private Limited on March 13, 1986. Its name was
subsequently changed to Jayneer Capital Private Limited on September 22, 1995. Its registered office is situated
at Continental Building, 135, Dr Annie Besant Road, Worli, Mumbai 400 018. It carries on business of finance,
trading and investments.
Directors
1.
2.
3.
4.
5.
Mr. Ashok Goel;
Mr. J.K. Jain;
Mr. Punit Goenka;
Ms. Nirmala Baheti and
Mr. Kailash Baheti.
below:
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended March
31, 2008
1,350.87
(365.1)
60.1
1,498.4
(60.74)
259.32
As at and for the
year ended March
31, 2007
1,718.8
490.6
60.1
1,863.5
81.64
320.07
As at and for the
year ended March
31, 2006
1,029.6
540.9
60.1
1,372.9
90.00
238.44
Shareholding
Name of Shareholder
No. of Shares
Mr. Ashok Kumar Goel
Ms. Kavita Goel
Mr. Arpit Goel
Ms. Sulochanadevi
Mr. Ankit Goel
Mr. Atul Goel
Mr. Punit Goenka
Ms. Sushila Goenka
90,000
30,670
24,000
24,000
23,910
23,760
25,000
40,940
1,60,200
76
Percentage of
shareholding (%)
14.92
5.08
3.98
3.98
3.96
3.94
4.14
6.79
26.55
Name of Shareholder
No. of Shares
Mr. Amit Goenka
Mr. Gaurav Goel
Ms. Sushila Goel
Mr. Gagan Goel
TOTAL
Percentage of
shareholding (%)
6.66
5.01
4.97
5.05
4.97
100.00
40,200
30,200
30,000
30,470
30,000
6,03,350
The company being a private limited company, its shares are not listed on any stock exchange.
It has not become a sick company under the meaning of SICA, is not under winding up and does not have
negative net worth.
Churu Trading Company Private Limited (company registration No: U51900MH1982PTC028133,
permanent account no: AAACC4853G, bank account no: 039305000153) was incorporated as a private
company under the Companies Act, on September 3, 1982. The registered office of Churu Trading Company
Private Limited is situated at Continental Building, 135, Dr Annie Besant Road, Worli, Mumbai 400 018. It
carries on the business of finance, trading and investment.
Directors
1. Mr. Chhajuram Chaudhary and
2. Mr. Ashok B Sanghvi.
below:
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended
March 31, 2008
12,787.81
10,595.60
313.5
38,904.28
2,703.57
12,508.51
As at and for the
year ended
March 31, 2007
2,117.8
676.0
309.8
4,063.7
174.57
1,411.72
As at and for the
year ended
March 31, 2006
16,950.0
15,271.6
309.8
3,387.7
4,929.52
1,193.50
Shareholding
Name of Shareholder
No. of Shares
Ms. Sushila Goel
Ms. Sushila Goenka
Mr. Amit Goenka
Ms. Sushila Devi Goel
Mr. Gaurav Goel
Mr. Gagan Goel
Ms. Sulachona Devi Goel
Mr. Atul Goel
Ms. Sharda Goel
Mr. Vaibhav Goel
TOTAL
74,066
40,000
11,345
43,285
15,600
3,821
60,743
1,963
100
62,606
313,529
77
Percentage of
shareholding (%)
23.62
12.76
3.62
13.81
4.98
1.22
19.37
0.63
0.03
19.97
100.00
become a sick company under the meaning of SICA, is not under winding up and does not have negative net
worth.
Ganjam Trading Company Private Limited (company registration No: U51900MH1982PTC028131,
permanent account no: AAACG3975H, bank account no: 039305000154) was incorporated as a private
company under the Companies Act, on September 3, 1982. The registered office of Ganjam Trading Company
carries on the business of finance, trading and investments.
Directors
1.
2.
Mr. Ashok B Sanghvi.
below:
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended March
31, 2008
1,792.6
(518.33)
107.20
700.00
(483.63)
753.15
As at and for the
year ended March
31, 2007
2,522.1
720.6
107.2
1,218.3
672.33
1,236.78
As at and for the
year ended March
31, 2006
500.7
(555.0)
106.2
(6,389.2)
(522.88)
(5,919.03)
Shareholding
Name of Shareholder
No. of Shares
Ms. Sushila Goenka
Ms. Sulachona Devi Goel
Mr. Atul Goel
Mr. Ankit Goel
Mr. Arpit Goel
Mr. Gaurav Goel
Mr. Gagan Goel
Mr. Vaibhav Goel
TOTAL
42,870
17,180
655
1,800
1,800
3,000
9,800
2,077
6,558
21,435
1,07,175
Percentage of
shareholding (%)
40.00
16.03
0.61
1.68
1.68
2.80
9.14
1.94
6.12
20.00
100.00
worth.
Premier Finance and Trading Company Limited, (company registration No: U65990MH1977PLC019636,
permanent account no: AAACP8140M, bank account no: 039305000158) was incorporated as a private
company under the Companies Act, on May 20, 1977. Its registered office is situated at Continental Building,
78
135, Dr Annie Besant Road, Worli, Mumbai 400 018. It converted itself into a public limited company on
January 13, 1983. Premier Finance and Trading Company Limited carries on the business of finance, trading
and investment.
Directors
1.
2.
3.
Mr. J. K. Jain;
Mr. Dinesh Kanodia and
Mr. Nilesh Mistry.
below:
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended March
31, 2008
3,950.4
(454.8)
5.9
(75.00)
(7,703.31)
(1,170.12)
As at and for the
year ended March
31, 2007
4,015.8
(1,145.4)
5.9
379.8
(19,399.76)
(6,533.19)
As at and for the
year ended
March 31, 2006
889.0
611.8
5.4
(1,862.3)
11,361.82
(34,483.17)
Shareholding
Name of Shareholder
No. of Shares
Ms. Sushila Goel
Mr. Atul Goel
Ms. Sulochanadevi
Mr. Gagan Goel
Mr. Vaibhav Goel
Mr. Amit Goenka
TOTAL
2,295
1,000
338
1,338
1,338
380
6,689
Percentage of
shareholding (%)
34.31
16.94
5.05
20.00
20.00
5.68
100.00
Its shares are not listed on any stock exchange. It has not become a sick company under the meaning of SICA, is
not under winding up and does not have negative net worth.
Prajatma Trading Company Private Limited (company registration No: U51900MH1982PTC028132,
permanent account no: AAACP8386K, bank account no: 039305000151) was incorporated as a private
company under the Companies Act, on September 3, 1982. The registered office of Prajatma Trading Company
Directors
1.
2.
Mr. Ashok B Sanghvi
below:
79
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended
March 31, 2008
2,755.5
(209.2)
48.1
7,132.1
(435.2)
14,935.74
As at and for the
year ended
March 31, 2007
2,436.8
(341.9)
44.6
(15,278.7)
(767.00)
(34,16 1.69)
As at and for the
year ended
March 31, 2006
435.5
(776.9)
44.6
(14,936.7)
(1,742.00)
(33,394.92)
Shareholding
Name of Shareholder
No. of Shares
Ms. Sushila Goel
Mr. Amit Goenka
Ms. Sulochanadevi
Mr. Ankit Goel
Mr. Arpit Goel
Ms. Sushiladevi Goel
Mr. Gaurav Goel
Mr. Gagan Goel
Ms. Kavita Goel
Mr. Vaibhav Goel
Ms. Sharda Goel
TOTAL
10,110
9,120
8,979
368
268
8,293
766
556
3,196
3,268
3,150
48,074
Percentage of
shareholding (%)
21.03
18.97
18.68
0.77
0.56
17.25
1.59
1.16
6.65
6.80
6.55
100.00
become a sick company under the meaning of SICA, is not under winding up. The company has had negative
net worth in the past.
Lazarus Investments Limited (Permanent Account no: AABCL2192A, Bank Account number 01-201-1006400) is a company incorporated in Mauritus on August 21, 2002 It carries on business of investments. Its
registered office is situated at 10, Frere Felix de Valois Street, Port Louis, Mauritius.
Directors
1.
2.
Mr. Deepak Jain and
Mr. Uday Gujadhur.
The audited financial results of the company for the financial years ended December 2007, December 2006 and
December 2005 are set forth below:
(Amount converted into INR (Lakhs)
Particulars
Total Income
Profit after Tax
Reserves & Surplus
Earnings per share
As at and for the
year ended
December 31,
2007
166.67
(889.38)
0.0012
44,822.05
22,411.02
80
As at and for the
year ended
December 31,
2006
1,067.76
192.77
0.0012
24,511.66
12,255.83
As at and for the
year ended
December 31,
2005
101.26
(250.69)
0.0012
8,673.69
4,336.85
Shareholding
Name of Shareholder
No. of Shares
Mr. Subhash Chandra
Percentage of
shareholding (%)
2
100
Briggs Trading Company Private Limited (corporate identification no.: U51900MH1982PTC028163,
permanent account no: AAACB4674J, bank account no.: 039305000159) was incorporated as a private
company under the Companies Act, on September 6, 1982. The registered office of Briggs Trading Company
Directors
1.
2.
Mr. Ashok B Sanghvi.
below:
Particulars
Total Income
Profit after Tax
Reserves & Surplus (Including Share Premimum )
As at and for the
year ended March
31, 2008
1,726.89
271.50
107.3
(1,894.42)
202.38
1,865.13
As at and for the
year ended March
31, 2007
2,938.5
887.7
104.3
(18,098.1)
851.17
(17,253.44)
As at and for the
year ended March
31, 2006
388.3
(1,073.7)
104.3
(18,985.8)
(1,029.55)
(18,104.61)
Shareholding
Name of Shareholder
No. of Shares
Ms. Sushila Goenka
Ms. Sulochanadevi
Mr. Atul Goel
Mr. Gaurav Goel
Mr. Gagan Goel
Ms. Kavita Goel
Mr. Vaibhav Goel
TOTAL
42,930
11,858
9,607
9,978
11,487
7,607
13,858
1,07,325
Percentage of
shareholding (%)
40.00
11.05
8.95
9.30
10.70
7.09
12.91
100.00
become a sick company under the meaning of SICA, is not under winding up. The company has a negative net
worth.
81
Essel Infraprojects Limited (company registration No: 11- 44006, permanent account no: AAACP6095M,
bank account no: 002805660881) was incorporated in the name of Essel Amusement Park (India) Limited on
July 7, 1987, and commenced business on July 21, 1987. The name of the company was changed to Pan India
Paryatan Limited on April 20, 1992 and there has been a further change in the name of the company to Essel
Infraprojects Limited with effect from February 20, 2007. The registered office of the company is situated at
Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai 400 018. It carries on the business of
construction, lease and management of amusement centres or parks of all the nature and to carry on, leasing or
owning or leasing out the business of hotel, motel restaurant, café, tavern bare, refreshment rooms, eating
houses, swimming pools, boarding and lodging, house keepers, clubs, association in India or abroad.
Directors
1 .Mr. Subhash Chandra;
2 .Mr. Jawahar Lal Goel;
3. Mr. Sanjay Arya;
4. Mr. Ashok Kumar Goel;
5. Mr. Punit Goenka and
6. Ms. Kavita Goel.
below:
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended
March 31, 2008
4,693.85
155.40
2,493.20
15,486.01
0.62
72.11
As at and for the
year ended
March 31, 2007
4,107.7
230.7
2,493.2
15,330.6
0.9
71.3
As at and for the
year ended
March 31, 2006
5,201.8
1,612.0
2,493.2
15,099.9
17.4
70.4
Shareholding
Name of Shareholder
No. of Shares
M/s Jawahar Lal Goel & Sons
Ms. Sulochana Devi
Ms. Kavita Goel
Mr. Arpit Goel
Mr. Ankit Goel
Ms. Tara Devi Goel
M/s Subhash Chandra & Sons (HUF)
M/s Nand Kishore & Sons
Ms. Sushila S. Goel
Mr. J. L. Goel
Mr. L.N. Goel
Mr. Gaurav Goel
Ms. Sarika Goel
Mr. Gagan Goel
Mr. Atul Goel
Mr. Amit Goenka
Mr. Punit Goenka
M/s L.N. & Sons
Ms. Shradha A. Goel
Mr. Nand Kishore
Ms. Sushila J. Goel
Ms. Pooja Goenka
9,28,060
5,25,250
4,33,000
3,57,010
2,82,500
2,80,500
2,76,500
2,94,500
70,000
68,510
68,010
92,010
80,500
55,500
67,500
40,000
39,000
37,500
36,000
36,000
32,000
56,010
29,200
82
Percentage of
shareholding (%)
3.72
2.11
1.74
1.43
1.13
1.13
1.11
1.18
0.28
0.27
0.27
0.37
0.32
0.22
0.27
0.16
0.16
0.15
0.14
0.14
0.13
0.22
0.12
Name of Shareholder
No. of Shares
Mr. Vaibhav A. Goel
Mr. Subhash Chandra
Hermitage Investment & Trading Company
Rankay Investments & Trading Company Limited
Blue Line Motors Private Limited
Acqualand (India) Limited
Essel Minerals Private Limited
Mod Silica Private Limited
Premier Trading Company Private Limited
Mr. Chhajuram Chaudhary
Mr. Kailash Bindal
Mr. Ram Sungh Bisnoi
Ms. Chandra Devi
Ms. Prabha Khetan
Mr. S. B. Khetan
Mr. M. Khetan
Mr. Rajendra Kumar
Mr. Banwarilal Khetan
Mr. Harpreet Singh
Mr. Darshanjit Singh
Ms. Manmohani Kaur
TOTAL
4,000
1,010
18,71,030
4,73,600
2,75,900
8,28,500
4,00,500
2,89,000
1,65,060
1,47,850
13,08,470
92,11,853
90,000
24,000
55,29,412
23,400
60,000
12,150
10,900
6,000
3,500
2,900
3,000
3,000
900
540
450
2,49,31,985
Percentage of
shareholding (%)
0.02
0.00
7.5
1.9
1.11
3.33
1.61
1.16
0.66
5.25
5.25
36.95
0.36
0.10
22.18
0.09
0.24
0.05
0.04
0.02
0.01
0.01
0.01
0.01
0.00
0.00
0.00
100.00
Its shares are not listed on any stock exchange. It has not become a sick company under the meaning of SICA, is
not under winding up and does not have negative net worth.
Ambience Business Services Private Limited (formerly Ambience Advertising Private Limited), (company
registration No: 42380, permanent account no: AAACA9528L, bank current account no: 0011010028800001
with Bank of Bahrain & Kuwait Mumbai) was incorporated as a private limited company under the Companies
Act on January 30, 1987. The registered office of Ambience Business Services Private Limited is situated at
401-E Neelam Centre, S K Ahire Marg, Worli, Mumbai 400 030, India. It carries on the business of
consultancy, research and hire of business facilities. Its name was changed from Ambience Advertising Private
Limited to Ambience Business Services Private Limited on November 1, 2007.
Directors
1.
2.
3.
4.
Mr. Ashok Mathai Kurien;
Ms. Diya Kurien;
Ms. Priyanka Kurien and
Ms. Elsie Nanji.
below:
Particulars
As at and for the
year ended March
31, 2008
83
As at and for the
year ended
March 31, 2007
As at and for the
year ended
March 31, 2006
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
As at and for the
year ended March
year ended
31, 2008
March 31, 2007
265.2
112.3
(31.9)
18.9
15.8
15.8
886.6
918.5
(20)
11.99
562.9
5,831.7
As at and for the
year ended
March 31, 2006
394.1
232.7
15.8
899.6
147.28
5,711.8
Shareholding
Name of Shareholder
No. of Shares
Ms. Diya Kurien
Ms. Priyanka Kurien
TOTAL
1,46,500
5,500
5,500
1,57,500
Percentage of
shareholding (%)
93.02
3.49
3.49
100.00
worth.
Undertaking
We confirm that the details of the permanent account numbers, bank account numbers and passport numbers
(for individuals), company registration number and the addresses of the registrar of companies where our
Promoters (companies) are registered have been submitted to the Stock Exchanges on which securities are
proposed to be listed at the time of filing the Letter of Offer with them.
Companies from which the Promoters have disassociated themselves
There are no companies from which the Promoters have disassociated themselves during the previous three
years
Interests of Promoters in the Company
Except as stated in “Notes to Risk Factors- Related Party Transactions” on page xxix of this Letter of Offer,
unsecured loan of Rs. 32,200 lakhs taken from one of our Promoter, Churu Trading Company Private Limited
and to the extent of shareholding in our Company, our Promoters and Promoter Group do not have any other
interest in our business.
Common Pursuits
Our Promoters do not have an interest in any venture that is involved in DTH services provided by the Company
or any member of the Group Companies. For, further details on the related party transactions, to the extent of
which our Company is involved, see “Notes to Risk Factors- Related Party Transactions” on page xxix.
Promoter Group
Relatives of the Promoter that are part of the Promoter Group:
The following relatives form part of our Promoter group:
Mr. Subhash Chandra
84
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Name
Ms. Sushila Goenka
Mr. Nand Kishor Goenka
Mr. Punit Goenka
Mr. Amit Goenka
Mrs. Sreyashi Goenka
Mrs. Navyata Goenka
Mrs. Pooja Dixit
Mr. Ashim Dixit
Mrs. Kusum Agarwal
Mrs. Urmila Gupta
Mrs. Mohini Gupta
Mr. Ashok Goel
Relationship
Wife of Mr. Subhash Chandra
Father of Mr. Subhash Chandra
Son of Mr. Subhash Chandra
Son of Mr. Subhash Chandra
Daughter in law of Mr. Subhash Chandra
Daughter in law of Mr. Subhash Chandra
Daughter of Mr. Subhash Chandra
Son in law of Mr. Subhash Chandra
Brother of Mr. Subhash Chandra
Sister of Mr. Subhash Chandra
Brother of Mr. Subhash Chandra
Brother of Subhash Chandra
No. of shares as on
May 20, 2008
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
6,25,250
10,06,500
Percentage of
holding
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
0.15
0.24
Sr. No.
1.
2.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Name
Ms. Sulochana Devi
Mr. Nand Kishore Goenka
Mr. Atul Goel
Mr. Ankit Goel
Mr. Arpit Goel
Ms. Chetna Agarwal
Mr. Subhash Chandra
Mr. Ashok Goel
Ms. Kusum Agarwal
Ms. Urmila Gupta
Ms. Mohini Gupta
Relationship
Wife of Mr. Laxmi Narain Goel
Father of Mr. Laxmi Narain Goel
Son of Mr. Laxmi Narain Goel
Daughter of Mr. Laxmi Narain Goel
Brother of Mr. Laxmi Narain Goel
Sister of Mr. Laxmi Narain Goel
No. of shares Percentage
as on May 20, of holding
2008
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
5,00,000
0.12
Nil
Nil
6,25,250
0.15
Nil
Nil
Nil
Nil
Nil
Nil
Ms. Sushila Goel
Sr.
No.
Name
1.
2.
3.
4.
5.
6.
7.
8.
Mr. Gagan Goel
Mr. Gaurav Goel
Mr. Rajindar Arya
Mr. Ved Prakash
Mr. Surinder Kumar
Mr. Mahabir Prasad
Ms. Pisto Devi
Relationship
Husband of Ms. Sushila Goel
Son of Ms. Sushila Goel
Son of Ms. Sushila Goel
Brother of Ms. Sushila Goel
Sister of Ms. Sushila Goel
No. of shares
as on May
20, 2008
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Percentage
of holding
No. of shares
as on May
20, 2008
Nil
Nil
Nil
Nil
Percentage
of holding
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Mr. Ashok Mathai Kurein
Sr.
No.
1.
2.
3.
4.
Name
Relationship
Mr. Vanchithatil Pothen Kurien
Ms. Esther Kurien
Ms. Priyanka Kurien
Ms. Diya Kurien
Father of Mr. Ashok Mathai Kurien
Mother of Mr. Ashok Mathai Kurien
Daughter of Mr. Ashok Mathai Kurien
Daughter of Mr. Ashok Mathai Kurien
85
Nil
Nil
Nil
Nil
Sr.
No.
Name
5. Mr. Susheel Kurien
6. Ms. Shanti Kurien
Relationship
Brother of Mr. Ashok Mathai Kurien
Sister of Mr. Ashok Mathai Kurien
No. of shares
as on May
20, 2008
Nil
Nil
Percentage
of holding
Nil
Nil
Sr.
No.
Name
Relationship
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Mrs. Kavita Goel
Ms. Shradha Goel
Mr. Vaibhav Goel
Mrs. Kusum Agarwal
Mrs. Urmila Gupta
Mrs. Mohini Gupta
Mr. Nand Kishor Goenka
Mr. Subhash Chandra
Wife of Mr. Ashok Kumar Goel
Daughter of Mr. Ashok Kumar Goel
Son of Mr. Ashok Kumar Goel
Sister of Mr. Ashok Kumar Goel
Father of Mr. Ashok Kumar Goel
Brother of Mr. Ashok Kumar Goel
No.
of
shares as on
May
20,
2008
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
10,06,500
5,00,000
Percentage
of holding
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
0.24
0.12
The Equity Shares are held by our Promoters through companies, trusts, HUFs owned/controlled by them. The
companies forming part of the Promoter group include:
Sr. No
Name of Promoter group Ventures
1.
Aqualand (I) Limited
2.
3.
E-City Investment & Holdings Company Private Limited
4.
Erith International Limited
5.
Essel Airport Infrastructure Private Limited
6.
7.
8.
Essel Ship Breaking Limited
9.
10.
Garron Limited
11.
12.
Mediavest India Private Limited
13.
New Media Broadcast Private Limited
14.
Pan India Network Infravest Private Limited
15.
Pan India Infrastructure Private Limited
16.
Prime Publishing Limited
17.
18.
Solid Containers Limited
19.
STC Developers Private Limited
20.
Suncity Hitech Infrastructure Private Limited
21.
Suncity Hitech Project Private Limited
22.
Suncity Infrastructure Private Limited
23.
Suncity Project Private Limited
24.
Vasant Sagar Properties Private Limited
25.
26.
27.
Zee News Limited
86
GROUP COMPANIES
.
The details of our top five listed group companies, in terms of market capitalization are under:
1.
Zee Entertainment Enterprises Limited was incorporated under name and style of Empire Holding Limited on
November 25, 1982. It obtained certificate of commencement of business on January 5, 1983. The name of the
company was changed to Zee Telefilms Limited on September 8, 1992 and the name of the Company was
further changed to Zee Entertainment Enterprises Limited on January 10, 2007. The registration number of the
company is L92132MH1982PLC028767. The registered office of Zee Entertainment Enterprises Limited is
situated at Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai- 400 018, India. The company is
the business of media and entertainment, majorly into content, production and broadcasting through television
as a medium.
Shareholding as on September 30, 2008
S. No.
Name of Shareholder
No. of Shares
1
Promoters
18,01,02,368
Percentage of
shareholding (%)
41.50
2.
3.
4.
5
Banks, FIs, Mutual Funds
Private Corporate Bodies
Resident Individuals
FII’s
5,06,01,032
7,13,83,212
1,16,91,790
11,25,27,483
11.66
16.45
2.69
25.93
6.
NRIs/OCBs/Foreign Bodies/Trusts
Total
77,01,226
43,40,07,111
1.77
100.00
Shareholding belonging to promoter and promoter group as on September 30, 2008
S. No.
Name of Shareholder
1.
2.
3.
4.
5.
6.
7.
8
No. of Shares
Mr. Ashok Kurien
Ms. Laxmi Goel
Ms. Sushila Goel
Ms. Sushila Devi
Ambience Advertising Private Limited
Essel Infraprojects Limited (formerly, Pan
India Paryatan Limited)
Delgrada Limited
Total
9.
10.
11.
12.
13.
14.
15.
Directors
1.
2.
3.
4.
5.
Mr. Subhash Chandra;
Mr. Punit Goenka;
Mr. Laxmi Narain Goel;
Mr. Ashok Mathai Kurien;
Mr. Davangere Prahlad Naganand;
87
20,42,000
17,50,000
6,80,000
2,50,000
22,75,000
60,16,500
35,76,000
Percentage of
shareholding of total
shareholding (%)
0.47
0.40
0.16
0.06
0.52
1.39
0.82
64,00,000
44,51,262
75,74,500
61,76,000
4,31,000
52,346,704
74,633,402
11,500,000
18,01,02,368
1.48
1.03
1.75
1.42
0.10
12.07
17.21
2.65
41.54
6.
7.
8.
9.
10.
11.
Mr. Bijendra K. Syngal;
Mr. N. C. Jain;
Dr. M. Y. Khan;
Mr. Gulam Noon
Mr. Rajan Jetley and
Prof. R. Vaidyanathan.
The audited financial results for Financial Years ended 2008, 2007 and 2006 are as follows:
(Rs in Lakhs except for per share data)
Particulars
Total Income
Net Profits After Tax
Equity Share Capital
Earning Per Share (Diluted after exceptional items)
Reserves (excluding revaluation reserves)
As at and for the
year ended
March 31, 2008
1,14,392.1
29,512.1
4,335.6
6.78
2,08,488.7
49.1
As at and for the
year ended
March 31, 2007
92,913.3
16,620.8
4,335.6
3.92
1,89,180.9
46.4
As at and for the
year ended
March 31, 2006
88,241.9
6,908.1
4,125.4
1.63
1,50,369.1
32.9
Share Quotation
The shares of the company are listed on the BSE, NSE and CSE. The details of the highest and lowest price on
BSE and NSE during the preceding six months are as follows:
Month
April 2008
May, 2008
June, 2008
July, 2008
August 2008
September 2008
October 2008
Source: BSE, NSE website
BSE
High (Rs.)
251.95
240.00
243.00
220.15
224.70
239.00
Low (Rs.)
207.30
213.55
199.00
182.25
188.00
187.00
209.00
93.00
NSE
High (Rs.)
248.50
240.00
242.60
220.60
224.50
254.80
210.00
Low (Rs.)
207.20
213.50
200.00
182.50
188.00
187.55
91.10
The shares of Zee Entertainment Enterprises Limited are infrequently traded on the CSE.
The company has not made any public or rights issue in the last three years, other than as provided below and
there has been no change in the capital structure during the last six months. It has not become a sick company
under the meaning of SICA and is not under winding up.
Mechanism for redressal of investor grievance
The company has a Shareholders/ Investor Grievance Committee which has authorized executives/officers of
the company to attend to investors grievances periodically. The committee meets at least once in a quarter to
monitor redressal of investor grievances. Generally, the investor grievances are dealt within seven days of the
receipt of the complaint. As of September 30, 2008 there are no investor grievances pending against the
company.
Promise versus Performance
Zee Entertainment Enterprises Limited made a public issue of 8,200,000 equity shares of Rs. 10 each for cash at
a premium of Rs. 20 per share aggregating to Rs. 24.60 crores vide prospectus dated July 28, 1993. The issue
opened on September 1, 1993 and closed on September 10, 1993. The object of the issue was to part finance its
capital expenditure, to meet the cost of purchasing of rights as well as development of Hindi and other Indian
language films, serials, documentaries etc., and to augment long term working capital requirements. The
proceeds of the issue was deployed for purposes it was raised. The promise versus performance in respect of the
public issue was as under:
88
(Rs. Lakhs)
1993-94
Projected
Actual
2,458
2,627
1,561
1,626
897
921
Total Income
Total Expenditure
PAT
2.
1994-95
Projected
Actual
4,292
5,737
2,554
3,636
1,688
2,021
1995-96
Projected
Actual
5,470
9,008
3,462
6,603
2,008
2,303
ETC Networks Limited incorporated under name and style of Zee Interactive Systems Limited, on August 27,
1999 and obtained certificate for commencement of business on November 19, 1999. It changed its name to
Zee Interactive Learning Systems Limited on December 14, 1999. Consequent to the scheme of amalgamation
of ETC Networks Limited with the company, the name of the company was further changed to ETC Networks
Limited on February 15, 2008. The registered office of the company is situated at Continental Building, 135, Dr.
Annie Besant Road, Worli, Mumbai- 400 018, India. The registration number of the company is
U80220MH1999PLC121505. The company’s business comprises education and broadcasting
S. No.
Name of Shareholder
68,70,625
Percentage of shareholding
(%)
70.51
Banks, FIs, and Mutual Funds
8,88,763
9.12
3.
7,97,158
8.18
4.
5.
6.
NRIs/OCBs
FIIS
7,58,661
11,749
4,17,500
7.79
0.12
4.28
97,44,456
100.00
1
Promoters
2.
No. of Shares
Total
S. No.
Name of Shareholder
1
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
No. of Shares
Gasnjam Trading Company Private Limited.
Mr. Amal Chandra Saha
Mr. Hitesh Vakil
Mr. Pushpal Sanghavi
Mr. Shailesh Dholakia
Mr. Vinod Desai
Asian Sattelite Broadcast Private Limited
Mr. Jawahar Goel
Ms. Sulochna Goel
Mr. Gaurav Goel
Rama Associate Limited
Total
48,89,526
17,50,000
10
10
10
10
10
2,31,041
3
1
1
1
1
1
68,70,625
Directors
1.
2.
3.
4.
5.
6.
Mr. Punit Goenka;
Mr. Sumeet Mehta;
Mr. V. V. Ranganathan;
Dr. R. S. Jangid and
Dr. Manish Agarwal.
89
Percentage of
shareholding (%)
50.18
17.96
0.00
0.00
0.00
0.00
0.00
2.37
0.00
0.00
0.00
0.00
0.00
0.00
70.51
Particulars
As at and for the
year ended
March 31, 2008**
As at and for the
year ended
March 31, 2007*
As at and for the
year ended
March 31, 2006
Total Income
8,198
2,153.0
2,336.3
170.07
974.4
73.2
Earning Per Share
24.80
12.15
8,694.7
90.6
99.2
22.37
*The company was subject to scheme of amalgamation in the year ended March 31, 2007.
** Financials of the merged entity as on March 31, 2008.
2,244.2
75.7
73.2
10.05
(79.4)
-
Share Quotation
The shares of the company were listed on the BSE and the NSE on March 28, 2008:
Month
April 2008
May, 2008
June, 2008
July, 2008
August 2008
September 2008
October 2008
BSE
High (Rs.)
318.00
291.65
247.00
173.10
209.80
NA
Low (Rs.)
228.35
236.15
171.50
156.15
158.00
NA
132.00
57.30
NSE
High (Rs.)
316.50
294.00
246.40
171.55
207.90
NA
135.90
Low (Rs.)
227.40
235.45
170.80
154.15
155.00
NA
57.00
The company has not made any public or rights issue in the last three years. It is not a sick company under the
meaning of SICA and is not under winding up.
The company has a Shareholders/ Investor Grievance Committee which has authorized executives/officers of
the company to attend to investors’ grievances periodically. The committee meets at least once in a quarter to
monitor redressal of investor grievances. Generally, the investor grievances are dealt within seven days of the
receipt of the complaint. As of September 30, 2008, there are no investor grievances pending against the
company.
The company has not made any capital issue in last three years.
3.
Essel Propack Limited was originally incorporated as Essel Packagings Limited on December 22, 1982. The
name of the company was changed from Essel Packagings Limited to Essel Packaging Limited on September
29, 1983 and subsequently from Essel Packaging Limited to Essel Propack Limited on July 25, 2001 and fresh
certificate of incorporation was obtained. Its registered office is situated at P.O. Vasind Taluka Shahapur, Thane
421604. The registration number of the company is 11-28947 and Company Identification no. is
L74950MH1982PLC028947. The company is engaged in the business of packaging.
90
S. No.
Name of Shareholder
1
2.
3.
4.
5.
6.
No. of Shares
Promoters
Banks, FIs, Mutual Funds and FIIs
NRIs/OCBs
Others
Total
9,22,69,255
2,00,10,602
1,24,86,106
2,92,84,129
23,34,148
2,16,890
15,66,01,130
(%)
58.93
12.77
7.97
18.70
14.90
0.14
100
S. No.
Name of Shareholder
1
2.
3.
4.
No. of Shares
Packaging Products Investments Limited
Premier Finance And Trading Company
Limited
Rupee Finance And Management Private
Limited
Aqualand India Limited
Royal Tools Private Limited
Blue Line Moters Private Limited
Mr. Subhash Chandra
Ms. Kavita Ashok Goel
Mr. Nand Kishore Goel
Total
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
1,71,58,305
1,70,70,000
10,176,800
1,08,48,675
Percentage of
shareholding (%)
10.96
10.90
6.50
6.92
81,90,390
80,24,525
5.23
5.12
62,08,520
59,53,380
40,86,340
18,22,000
15,70,200
504,000
431,000
96,000
89,305
25,200
3.96
3.80
2.61
1.16
1.00
0.32
0.28
0.06
0.06
0.02
10,990
3,000
625
9,22,69,255
0.01
0.00
0.00
58.91
Directors
1.
2.
3.
4.
5.
6.
Mr. Ashok Kumar Goel;
Mr. Devendra Ahuja;
Mr. Tapan Mitra;
Mr. K. V. Krishnamurthy and
Mr. Boman Moradian.
The audited financial results for years ended 2007, 2006 and 2005 are as follows:
Particulars
As at and for the
year ended
December 31, 2007
As at and for the
year ended
December 31, 2006
12,181
6,081
3,131
3.88
78,850
1,54,245
1,02,861
9,855
3,131
6.29
73,447
1,31,191
Total Income
Earning Per Share
Net Asset Value
91
As at and for the
year ended
December 31, 2005
83,323
9,015
3,131
5.76
67,222
1,12,916
53.31
50.43
46.38
* The shares of the company were split from face value of Rs. 10 per share to Rs. 2 per share on June 8, 2006.
Share Quotation
The shares of the company are listed on the BSE and the NSE. The details of the highest and lowest price on
Month
April 2008
May, 2008
June, 2008
July, 2008
August 2008
September 2008
October 2008
BSE
High (Rs.)
43.55
36.95
32.65
27.90
28.70
29.00
24.65
Low (Rs.)
35.65
32.00
24.90
23.65
24.60
21.25
13.15
NSE
High (Rs.)
43.55
37.00
32.80
27.70
28.70
29.00
24.55
Low (Rs.)
35.55
32.05
25.05
23.55
24.60
20.65
13.20
The company has not made any public or rights issue in the last three years other than as provided below and
there has been no change in the capital structure during the last six months. It has not become a sick company
under the meaning of SICA and is not under winding up.
The company has a Shareholders/ Investor Grievance Committee which meets as and when required, to deal and
monitor redressal of complaints from shareholders. Generally, the investor grievances are dealt within seven
days of the receipt of the complaint. As of September 30, 2008, there are no investor grievances pending against
the company.
Essel Propack Limited has made a rights issue of 38,62,044 equity shares of Rs. 10 each for cash at a premium
of Rs. 215 per share aggregating to Rs. 8,689 Lakhs to the shareholders of the company vide letter of offer dated
February 28, 1995. Issue opened on March 27, 1995 and closed on April 26, 1995. The object of the issue was
to part finance the expansion project and to meet working capital requirement. The proceeds of the issue was
deployed for purposes it was raised. The promise versus performance in respect of the public issue was as under:
(Rs. in Lakhs)
1994-95
Projected
Actual
6,397
8000
1,390
1,501
1,390
1,501
Sales
PBT
PAT
1995-96
Projected
Actual
10,686
11,356
2,352
2,113
2,352
2,113
1996-97
Projected
Actual
12,979
15,267
2,899
2,858
2,899
2,083
1995-96: The variation between the projected and the actual figures is attributable to the devaluation of Rupee
by 12%, rise in polymer prices for most of the Financial Year, import of 53% of the raw materials consumed by
the company, and delay in anticipated changes in aluminium tubes in view of the product design changes.
1996-97: The variation between the projected and actual figures is attributable to the revision in the schedule of
project implementation resulting in the issue proceeds partly remaining unutilized which were thereafter
invested in interest bearing short term instruments.
4.
Zee News Limited
Zee News Limited was originally incorporated as Zee Sports Limited on August 27, 1999. It obtained the
certificate of commencement of business on November 19, 1999. The name of the company was changed to Zee
News Limited on May 27, 2004. The company’s identification number is L92100MH1999PLC121506. The
company is engaged in the business of broadcasting of television channels. Its registered office is situated at
Continental Building, 135 Dr Annie Besant Road, Worli, Mumbai- 400 018, India.
92
S. No.
Name of Shareholder
No. of Shares
1
Promoters
129,817,043
(%)
54.14
2.
3.
4.
5.
6.
NRIs/OCBs/ Foreign Bodies/Trusts
FIIS
Total
4,39,08,300
2,44,27,712
2,03,77,069
58,86,565
1,53,47,267
23,97,63,956
18.31
10.19
8.50
2.46
6.40
100
S. No.
Name of Shareholder
1
2.
3.
4.
5
No. of Shares
ganjam trading Company Private Limited
Ms Laxmi Goel
Ms. Sushila Goel
Ms. Sushila Devi
Pajatma Tading Company Private Limited
Pemier Fnance & Tading Company Private
Limited
Vena Investment Private Limited
Total
6.
7.
8.
9.
10.
11.
12.
13.
9,23,188
10,28,527
29,68,714
2,08,42,163
28,93,440
Percentage of
shareholding (%)
0.39
0.43
1.24
8.69
1.21
8,02,175
3,07,428
1,13,025
24,38,401
37,63,506
27,92,169
0.33
0.13
0.05
1.02
1.57
1.16
1,94,855
9,07,49,452
12,98,17,043
0.08
37.85
54.14
Directors
1.
2.
3.
4.
5.
6.
Mr. Naresh Kumar Bajaj;
Mr. Kancharana Upendra Rao;
Mr. Vinod Bakshi and
Mr. V. V. Ranganathan.
Particulars
As at and for the
year ended
March 31, 2008
Total Income
Earning Per Share (on Re. 1 share)
* Calculated on Rs.10 face value per equity share
35,957.1
3,730.3
2,397.6
1.56
18,634.8
8.77
93
As at and for the
year ended
March 31, 2007
24,878.7
994.2
2,397.6
0.41
16,026.5
7.68
As at and for the
year ended
March 31, 2006
3,622.6
181.6
4,180
0.18*
13,240.6
4.16
Share Quotations
BSE
High (Rs.)
61.80
62.50
52.95
50.00
45.00
49.90
41.75
Month
April 2008
May, 2008
June, 2008
July, 2008
August 2008
September 2008
October 2008
NSE
High (Rs.)
61.50
62.35
53.05
50.15
44.85
50.70
41.70
Low (Rs.)
47.35
51.55
45.85
41.90
38.50
36.75
29.95
Low (Rs.)
47.25
51.40
45.85
42.15
38.55
36.90
29.95
The company has not made any public or rights issue in the last three years and there has been no change in the
capital structure during the last six months. It has not become a sick company under the meaning of SICA and is
not under winding up.
days of the receipt of the complaint. As of September 30, 2008, there are no investor grievances pending against
the company.
Zee News Limited has not made any public or rights issue as Zee News Limited was listed on the Stock
Exchanges on January 10, 2007 pursuant to the Scheme of Arrangement by which news business, comprising of
news and regional channels were transferred to Zee News Limited. For more information see section titled
“History of the Company and Other Corporate Matters” beginning on page 55 of this Letter of Offer.
5.
Wire and Wireless (India) Limited was incorporated on March 24, 2006. It obtained the certificate of
commencement of business on March 27, 2006. The company identification number Wire and Wieless (India)
Limited is U64200MH2006PLC160733. The company is engaged in the cable business. Its registered office is
situated at Continental Building, 135 Dr Annie Besant Road, Worli, Mumbai 400 018.
S. No.
1
Name of Shareholder
Promoters
2.
3.
4.
5.
NRIs/OCBs/ Foreign Bodies/ Foreign
Nationals/Trusts
FIIs
6.
Total
No. of Shares
10,56,64,198
Percentage of holding
48.64
60,23,240
3,47,28,018
4,45,14,711
17,77,196
2.77
15.99
20.49
0.82
2,45,10,390
21,72,17,753
11.28
100
S. No.
1
2.
Name of Shareholder
No. of Shares
10,21,000
11,37,500
94
Percentage of
shareholding (%)
0.47
0.52
S. No.
Name of Shareholder
3.
4.
5
No. of Shares
Ms. Laxmi Goel
Ms. Sushila Goel
Ms. Sushila Devi
Pemier Fnance & Tading Company Private
Limited
Vena Investment Private Limited
Delgrada Limited
Total
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
32,83,250
20,25,500
Percentage of
shareholding (%)
1.51
0.93
32,00,000
8,75,000
3,40,000
1,25,000
26,96,750
41,62,250
1.47
0.40
0.16
0.06
1.24
1.92
30,88,000
2,15,500
6,13,13,448
1,64,31,000
57,50,000
12,98,17,043
1.42
0.10
28.23
7.56
2.65
54.14
Directors
1.
2.
3.
4.
5.
6.
Mr. Brijendra K Syngal;
Mr. Davangere Prahlad Naganand;
Mr Amit Goenka;
Mr. Sanjay Jain and
Mr. Michael Kevin Block.
The audited financials results of Wire & Wireless (India) Limited for the period ended March 31, 2007 and for
the Financial Year ended March 31, 2008 is as follows:
(Rs. in lakhs except for per share data)
Particulars
As at the
year ended
March 31, 2008
28,550.3
(15,479.5)
2,172.4
(4.95)
1,120.59
(4.61)
Total Income
Earning Per Share
As at and for the
year ended
March 31, 2007
19,270.1
(11,111.5)
2,172.4
(5.21)
2,841.9
23.08
As the company was incorporated on March 24, 2006, there are no financial statements prior to period ending
March 31, 2007.
Share Quotations
Month
April 2008
May, 2008
June, 2008
July, 2008
August 2008
September
BSE
High (Rs.)
47.40
46.30
37.00
25.95
28.00
24.00
Low (Rs.)
34.60
35.75
22.95
19.45
22.00
15.20
95
NSE
High (Rs.)
47.50
46.20
36.80
25.95
28.15
24.10
Low (Rs.)
34.55
35.75
21.10
19.40
22.05
15.10
October 2008
17.50
7.70
17.00
7.80
days of the receipt of the complaint. As of September 30, 2008, there are no investor grievance pending against
the company.
Wire and Wireless (India) Limited has not made any public or rights issue as Wire and Wireless (India) Limited
was listed on the BSE and NSE on January 10, 2007 and at CSE on January 10, 2007 pursuant to the scheme of
arrangement by which Zee Entertainment Enterprises Limited and Siti Cable Network Limited had transferred
their cable business undertaking to Wire and Wireless (India) Limited, as approved by the order of the High
Court of Judicature at Bombay dated November 17, 2006.
Group companies which have negative net worth/have become sick industrial undertakings/under
winding-up
Except as provided hereinbelow, none of the group companies have negative networth or have been declared as
sick industrial undertakings or are referred for winding up. The following are the details of group companies
which have negative networth.
1.
Asian Sky Shop Limited was originally incorporated as Metropolitan Leasing Limited on July 13, 1984. The
name of the company was changed to Asian Sky Shop Limited on February 3, 2006. The company’s registration
number is 55-18831. The company is engaged in the business of marketing fitness, lifestyle, entertainment and
children products through the medium of television. Its registered office is situated at Essel House, B-10,
Lawrence Road Industrial Area, New Delhi 110 035.
Shareholders as on September 30, 2008
S. No.
1
2.
3.
4.
5.
6.
Total
Name of Shareholder
Promoters
FIIs
NRIs/OCBs/Foreign Bodies
No. of Shares
2,92,100
Nil
Nil
1,07,900
Nil
Nil
4,00,000
Percentage of holding
73.02
Nil
Nil
26.98
Nil
Nil
100.00
Directors
1.
2.
3.
Mr. Jawahar Lal Goel;
Mr. Ashok Mathai Kurien; and
Mr. Dinesh Vadiwala.
The audited financial results of Asian Sky Shop Limited for the last three financial years are as follows
(In Rs. lakhs, except per share data)
96
Sales and other income
Profit/ (Loss) after tax
Equity capital (par value Rs. 10 per share)
Reserves and Surplus (excluding revaluation reserves)
Earnings/ (Loss) per share (diluted) (Rs.)
Book value per equity share (Rs.)
As at and for the
year ending
March 31, 2008
721.93
(54.899)
40.00
(137.25)
(203.44)
As at and for the
year ending
March 31, 2007
176.14
(15.108)
40.0
(37.77)
(66.19)
As at and for the
year ending
March 31, 2006
356.27
(10.542)
40.0
(26.36)
(28.42)
Share Quotations
The shares of the company are listed on the Delhi Stock Exchange and are infrequently traded therefore share
price details of past six months is unavailable.
days of the receipt of the complaint. As of September 30, 2008, there is no investor grievance pending against
the company.
The equity shares of Asian Sky Shop Limited are not traded since December 23, 2007, the company can not
quantify promise versus performance.
The company has negative net worth.The company has not become a sick company under the meaning of SICA,
is not under winding up.
2.
Suncity Hi-Tech Infrastructure Private Limited
Suncity Hi-Tech Infrastructure Private Limited was incorporated as a private limited company on December 13,
2005. The company’s registration number is U45201DL2005PTC143614. The company is engaged in the
business of development of real estate projects. Its registered office of the company is situated at N-49, First
Floor, Connaught Place, New Delhi 110 001.
Shareholding
S. No.
Name of Shareholder
1.
2.
3.
Suncity Projects Private Limited
Odeon Builders Private Limited
Nikhil Footwears Private Limited
4.
No. of Shares
Percentage of
shareholding (%)
3,000
1,500
3,000
30
15
30
Essel Housing Projects Private Limited
250
2.50
5.
Ansal Housing & Construction Limited
250
2.50
6.
E-City Entertainment (India) Private Limited
1,000
10
7.
Essel Infraprojects Limited (formerly Pan India
Paryatan Limited)
Total
1,000
10
10,000
100
Directors
1.
2.
3.
Mr. Subhash Aggarwal and
Mr. Ashok Bansal.
97
The audited financial results of Suncity Hi-Tech Infrastructure Private Limited for the Financial Years 2008,
2007 and 2006 are as follows
(In Rs. Lakhs, except per share data)
Reserves and Surplus (excluding revaluation
reserves)
As at and for the
year ending
March 31, 2008
0.06
(6.40)
1.0
(12.81)
As at and for the
year ending
March 31, 2007
0.1
(5.6)
1.0
(8.3)
As at and for the
year ending
March 31, 2006
0.1
(2.7)
1.0
(2.7)
(64.06)
(122.74)
(55.68)
(80.01)
(26.01)
(36.63)
The company has negative net worth. The company has not become a sick company under the meaning of
SICA, is not under winding up.
3.
Suncity Hi-Tech Projects Private Limited
Suncity Hi-Tech Projects Private Limited was incorporated as a private limited company on December 13, 2005.
The company’s registration number is U45201DL2005PTC143613. The company is engaged in the business of
development of real estate projects. Its registered office is situated at N-49, First Floor, Cannaught Place, New
Delhi 110 001.
Shareholding
S. No.
Name of Shareholder
No. of Shares
1.
2.
3.
4.
5.
6.
7.
Suncity Projects Private Limited
Odeon Builders Private Limited
Nikhil Footwears Private Limited
Essel Housing Projects Private Limited
Ansal Housing & Construction Limited
E-City Entertainment (I) Private Limited
Essel Infraprojects Limited (formerly Pan India
Paryatan Limited)
Total
Percentage of
shareholding (%)
3,000
1,500
3,000
250
250
1,000
1,000
30
15
30
2.50
2.50
10
10
10,000
100
Directors
1.
2.
3.
Mr. Subhash Chander and
Mr. Ashok Bansal.
The audited financial results of Suncity Hi-Tech Projects Private Limited for the past financial years, are as
follows
(In Rs. lakhs, except per share data)
As at and for
the year ending
March 31, 2008
98
As at and for the
year ending
March 31, 2007
As at and for the
year ending
March 31, 2006
Nil
Nil
Nil
(5.83)
(1.32)
(0.06)
1.00
1.00
0.10
As at and for
the year ending
March 31, 2008
As at and for the
year ending
March 31, 2007
(8.13)
(1.89)
(0.57)
(58.32)
(13.21)
(5.74)
(75.91)
(15.85)
(4.94)
As at and for the
year ending
March 31, 2006
4.
Mediavest India Private Limited
Mediavest India Private Limited (corporate identification no.: U92132MH2001PTC130426, permanent account
no: AACCM4290K, bank account no.: 14102000015048) was incorporated as a private company under the
Companies Act, on 11th January 2001. The registered office of Mediavest India Private Limited is situated at
Continental Building, 135, Dr Annie Besant Road, Worli, Mumbai- 400 018, India. It carries on the business of
buying, selling, procuring, commissioning films and entertainment software for their exhibition, distribution and
dissemination on TV channels through various mediums and also to make investment in companies for
promotion of similar activities and/or own or make investment imprint media companies.
Directors
1.
2.
Mr. Himanshu Mody and
Mr. Ashok Sanghvi.
Particulars
Total Income
Profit after Tax
Reserves & Surplus
As at and for the
year ended March
31, 2008
0
(684.5)
1
(2,569.4)
(6,844.7)
(25,683.91)
As at and for the
year ended March
31, 2007
34.0
(477.3)
1
(1,884.9)
(4,773.60)
(18,839.23)
As at and for the
year ended March
31, 2006
0.1
(305.6)
1
(1,407.5)
(3,056.70)
(14,065.63)
Shareholding
Name of Shareholder
No. of Shares
TOTAL
10,000
10,000
Percentage of
shareholding (%)
100.00
100.00
5.
Essel International Limited was incorporated as a public company on June 28, 1994 under the Companies Act. It
is registered with the Registrar of Companies, National Capital Territory of Delhi, Haryana and Punjab, with
registration number 5559874. The company has its registered office situated at B-10, Lawrence Road Industial
Area New Delhi and is engaged in the business of Trading.
Directors
1.
99
2.
3.
Mrs. Sulochna Devi and
Mr. Jawahar Lal Goel.
The audited financial results of Essel International Limited for the last three financial years are as follows
(In Rs. Lakhs, except per share data)
March 31, 2008
9.70
March 31, 2007
25.52
March 31, 2006
6.32
(11.23)
314.90
(1,343.19)
(0.036)
(32.65)
(25.02)
314.90
(1,331.95)
(0.079)
(32.30)
(26.99)
314.90
(1,306.93)
(0.086)
(31.50)
Shareholding
Name of Shareholder
No. of Shares
Percentage of
shareholding (%)
30,010
0.95
2,27,010
7.21
Mr. Ashok Goel
2,51,510
7.99
Ms. Sulochna Devi
43,310
1.38
Ms. Sushila Goel
36,010
1.14
10
Negligible
Mr. Prosenjit Chandra Lahiri
Ms. Chetna Goel
10
Negligible
Essel International Private Limited
1,86,800
5.93
Blue Line Moters Private Limited
2,63,100
8.36
Nand Kishore & Sons (HUF)
46,000
1.46
Subhash Chandra & Sons (HUF)
3,64,000
11.56
1,04,000
3.30
Jawahar Lal & Sons (HUF)
1,39,600
4.43
100
0.003
Mr. Nand Kishore
6,12,600
19.45
Ms. Kavita Goel
1,00,100
3.18
Mr. Ankit Goel
100
0.003
Mr. Arpit Goel
100
0.003
Mr. Anup Kumar Chhawchharia
100
0.003
Ashok Kumar & Sons (HUF)
Royal Tools Private Limited
Munna Lal Lachman Dass (HUF)
Mr. Jagan Nath
Essel Minerals Private Limited
TOTAL
6,84,500
21.74
10
Negligible
10
Negligible
60,000
1.91
31,48,990
100
100
OUR SUBSIDIARIES
We have three subsidiaries which are listed below:
1.
2.
3.
Agrani Convergence Limited;
Agrani Satellite Services Limited and
1.
Agrani Convergence Limited was incorporated as a public company on June 30, 2000 and obtained certificate
for commencement of business on July 28, 2000. Its registered office is situated at B-10, Lawrence Road,
Industrial Area, Delhi 110 035.
The main object of the company is retailing, merchandising and reselling of products and services related to
convergence in the telecommunication, information technology and learning, media, entertainment and also for
other related products and services.
Directors
1.
2.
3.
Mr. Puneet Goenka;
Mr. Atul Goel and
Mr. Amit Goyal.
Shareholding
Name of the shareholder
Premier Finance & Trading Company Limited*
Churu Trading Company Private Limited*
Mr. Ashok N Goel*
Ganjam Trading Company Private Limited*
No. ofshares held
1,24,70,537
1
1
1
1
Percentage of holdings (%)
51.00
0.00
0.00
0.00
0.00
Prajatma Trading Company Private Limited*
1
0.00
Briggs Trading Company Private Limited*
1
0.00
1,19,81,503
49.00
TOTAL
2,44,52,046
100.00
* Held in beneficial interest of Dish TV India Limited
Financial performance
The operating results of Agrani Convergence Limited for Fiscal Year 2008, 2007 and 2006 (based on audied
financial statements) are as hereunder:
(Amount in Rs. lakhs except for share data)
Particulars
Total Income
Profit / (Loss) after tax
Equity Capital
Reserve
Basic Earning per share
Book value per share
As at and For
the period ended
March 31, 2008
36.18
3.47
2,445.20
(4,055.44)
0.01
(6.58)
As at and For
the period ended
March 31, 2007
122.87
(43.28)
2,445.20
(4,058.92)
(0.18)
(6.60)
As at and For
the period ended
March 31, 2006
451.25
(205.52)
2,445.20
(4,015.64)
(0.85)
(6.42)
The equity shares of Agrani Convergence Limited are not listed and it has not made any public or rights issue in
the preceeding three years. It has not become a sick company under the meaning of SICA and it is not referred
for winding up.
2.
101
Agrani Satellite Services Limited was incorporated as a public company on June 30, 2000 and obtained
certificate for commencement of business on July 28, 2000. Its registered office is situated at B-10, Lawrence
Road, Industrial Area, New Delhi 110 035. Agrani Satellite Services Limited is engaged in a project to own,
establish and operate a C & Ku band satellite system, and to market and lease their bandwidth capacities to
various users in India.
The main object of the company is to develop, acquire, launch, operate and maintain all kinds of
communications satellites in outer space for providing all kinds of telecommunications, audio and video
distribution / broadcasting, multimedia, messaging, data and Internet Protocol (IP) services; Marketing,
Distribution and sales of all kinds of satellite capacities for and services involving telecommunications, audio
and video distribution / broadcasting, multimedia, messaging, data and Internet Protocol (IP) services.
Directors
1.
2.
3.
Mr. Punit Goenka and
Mr. K Narayanan.
Shareholding
No. of
shares held
9,44,00,997
1
1
1
1
1
Percentage of holdings
(%)
99.99
0.00
0.00
0.00
0.00
0.00
Prajatma Trading Company Private Limited*
1
0.00
Briggs Trading Company Private Limited*
1
0.00
9,44,01,004
100.00
Premier Finance & Trading Company Limited*
Churu Trading Company Private Limited*
Mr. Ashok N Goel*
Mr. Laxmi Narain Goel*
Ganjam Trading Company Private Limited*
TOTAL
The operating results of Agrani Satellite Services Limited for Fiscal Year 2008, 2007 and 2006 (based on audied
financial statements) are as hereunder:
Particulars
As at and For
the period ended
March 31, 2008
Total Income
Equity Capital
Reserve
Nil
Nil
9,440.10
Nil
Nil
10
As at and For
the period ended
March 31, 2007
Nil
Nil
9,440.10
Nil
Nil
10
As at and For
the period ended
March 31, 2006
Nil
Nil
9,440.10
Nil
Nil
10
The equity shares of Agrani Satellite Services Limited are not listed and it has not made any public or rights
issue in the preceeding three years. It has not become a sick company under the meaning of SICA and it is not
referred for winding up.
3.
Integrated Subscriber Management Services Limited was incorporated as Agrani Telecom Limited on June 25,
2001 and obtained certificate of commencement of business on July 18, 2002. The name of the Company was
subsequently changed to Integrated Subscriber Management Services Limited by way of fresh certificate of
102
incorporation dated September 15, 2003. Integrated Subscriber Management Services Limited carries on the
business of providing services on commercial basis pertaining to subscribers management including raising and
collection of bills, collection and maintenance of subscribers information, preparation of required report and call
centre activities. The registered office of Integrated Subscriber Management Services Limited is situated at B10, Lawrence Road, Industrial Area, New Delhi 110 035.
The company is engaged in the business of subscriber management services including billing services, viewing
cards and payment handling and to deal in and provide various kinds of entertainment contents and services.
Directors
1.
2.
3.
Mr. Mukesh Mittal;
Mr. Ankush Garg and
Mr. Manoj Sheth.
Shareholding
No. of
shares held
Mr. Suresh Kumar*
Mr. Vimal Kumar Agarwal*
Mr. Mukesh Mittal*
Mr. Rakesh Kumar Singh*
Mr. Suresh Aroraa*
Mr. Jain Kumar Jain*
TOTAL
49,400
100
100
100
100
100
100
50,000
Percentage of holdings
(%)
98.8
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
100.00
The operating results of Integrated Subscriber Management Services Limited for Fiscal Years 2008, 2007 and
2006 (based on audied financial statements) are as hereunder:
Particulars
As at and For
the period ended
March 31, 2008
Total Income
Equity Capital
Reserve
5,948.22
(95.77)
5.00
(21.92)
(191.55)
(33.85)
As at and For
the period ended
March 31, 2007
2,825.22
(22.71)
5.00
73.85
(45.41)
157.70
As at and For
the period ended
March 31, 2006
1,364.15
167.04
5.00
96.39
334.01
202.78
The equity shares of Integrated Subscriber Management Services Limited are not listed and it has not made any
public or rights issue in the preceeding three years. It has not become a sick company under the meaning of
SICA and it is not referred for winding up.
103
FINANCIAL STATEMENTS
AUDITORS REPORT
The Board of Directors
B-10, Lawrence Road Industrial Area,
New Delhi-110035
Dear Sirs,
1.
We have examined the Consolidated Financial Information (‘CFI’) of Dish TV India Limited (herein after
referred to as ‘the Company’) and its Subsidiaries [together referred to as ‘the group’], as stated in Note 5
of para C of Annexure-D, annexed to this report for each of the financial period ended on June 30, 2008
and financial years ended on March 31, 2008, 2007, 2006, 2005 and 2004 prepared by the Company and
approved by the Board of Directors of the Company in its meeting held on November 12, 2008 for the
proposed Rights Issue of equity shares of the Company, in accordance with the requirements of:
a) Paragraph B of part II of Schedule II to the Company Act, 1956 (hereinafter referred to as ‘the Act’);
b) The Securities and Exchange Boards of India (Disclosure and Investor Protection) Guidelines 2000
(‘the Guidelines’) and the clarifications issued by the Securities and Exchange Board of India
(hereinafter referred to as ‘SEBI’) on January 19, 2000 as amended time to time, in pursuance of
Section 11 of the Securities and Exchange Boards of India Act, 1992;
c) the term of reference received from the Company; and
d) the Guidance Note on Reports in Company Prospectuses and Guidance Note on audit Reports /
Certificates on Financial Information in Offer Documents Issued by the Institute of Chartered
Accountants of India.
2.
The Consolidated Financial Information as referred to in Para 1 above are based on followings:
a)
The Consolidated Financial Statements (CFS) of the group which have been audited by us for the three
months ended June 30, 2008 and financial years ended on March 31, 2008 and 2007. The Financial
Statements for the three months ended June 30, 2008 are approved by the Board of Directors of the
Company for the purpose of disclosure in the Offer Document being issued by the Company in
connection with the Right Issue of Equity Shares of the Company.
b) The Company had not prepared Consolidated Financial Statements for the year ended March 31, 2006,
2005, 2004 as the same was not applicable to the Company at that time. However for the purpose of
proposed Rights Issue, the Company has prepared Consolidated Financial Information for Right Issue
(CFIR) for all these years. The CFI referred to in Para 1 above for all these years are based on CFIR
prepared and certified by the management of the Company.
c)
We did not audit the financial statements of the subsidiaries namely Integrated Subscribers
Management Systems Limited (ISMSL) (Audited by S.K. & Co.) and Agrani Satellite Communication
Enterprises (Gibraltor) Limited (ASCEGL) (Audited by Drummonds) for the financial years as given
below. This report, in so far as it relates to the amount included in respect of those entities and period
and years, is based solely on financial statements audited and reports issued by the respective auditors.
(Rs in lacs)
Particulars
ISMSL (Became subsidiary w.e.f. April 01, 2006)
Total Assets
Total Revenues
Financial
Period
ended 30 June,
2008
Financial year
ended
31 March, 2008
7555.61
22.96
7172.70
250.19
Financial year
ended 31
March, 2007
4299.88
72.29
(Rs in lacs)
104
Particulars
Financial year
ended
31 March, 2006
ASCEGL (Ceased to be a subsidiary on March 31,
2006)
Total Assets
Total Revenues
-
Financial year
ended 31
March, 2005
62.11
Financial year
ended 31
March, 2004
394.88
d) Included in the CFS & CFIR for the year ended March 2006, 2005, 2004 are assets and revenues of
one foreign subsidiary, foreign currency translation for which is done by the management of the
Company. This report, in so far as it relates to the above amounts included is based solely on foreign
currency translation certified by the Company managements.
3.
We report that:
(a) i.
Restated Summary Statement of Assets and Liabilities of the Group, as at June 30, 2008 and
March 31, 2008, 2007, 2006, 2005 and 2004 is as set out in Annexure A to this report, after
making such adjustments and regroupings, as described in Para (3)(a)(v) below, as in our opinion
are appropriate and more fully described in the notes appearing in Annexure D to this report.
ii The Restated Summary Statement of Profit and Loss of the Group for the for three months period
ended June 30, 2008 and for the financial years ended March 31, 2008, 2007, 2006, 2005 and 2004
is as set out in Annexure B to this report. These profits and losses have been arrived at after making
such adjustments and regroupings as described in Para (3)(a)(v) below, as in our opinion are
appropriate and more fully described in the notes appearing in Annexure D to this report
iii The Restated Summary Statement of Cash Flows for the three months period ended June 30, 2008
and for the financial years ended March 31, 2008, 2007, 2006 and 2005 is as set out in Annexure C
to this report, after making such adjustments and regroupings in Para (3)(a)(v) below, as in our
opinion are appropriate and more fully described in the notes appearing in Annexure D to this
report. Restated Summary Statement of cash flaw for the financial year ended March 31, 2004 is
not provided as in the opinion of the Company, the Accounting Standard AS 3 became applicable
on the Company from accounting period starting from April 1, 2004 only.;
iv The Statement of Significant Accounting Policies applied to all reporting periods in the financial
information, described in Para 3(a)(i) to 3(a)(iii) above, as appearing in Para A of Annexure D to
this report, the Statement of Significant Selected Notes on the Restated Summary Statement of
Assets and Liabilities and Restated Summary Statement of profit and loss account and Statement of
qualifications in Auditor’s Report during the reporting period, as in our opinion are appropriate and
more fully described in the notes appearing in para C of Annexure D to this report.
v
On the basis of our examination of these “Restated Summary Statements”, as highlighted above,
we state that:
v.1 As explained in Note 13 of Para C of Annexure D to this report, correction of accounting
policies have been adjusted with retrospective effect in the attached “Restated Summary
Statements”.
v.2 As explained in Note 14.1 of Para C of Annexure D, qualifications in the auditors’ report which
require any adjustments in the “Restated Summary Statements” have been made. However, the
qualifications in the auditors’ report in respect of three months period ended June 30, 2008 and
financial year ended March 31, 2008, 2007, 2006, 2005 and 2004 where it is not possible to
make adjustments/ rectifications, have been summarized in Note 14.2, 14.3 and 14.4 of Para C
of Annexure D to this report;
v.3 Notes on adjustments for Restated Summary Statements are given in para D of Annexure D to
this report, material amounts relating to previous years have been adjusted in the “Restated
Statements Summary” in the years to which they relate irrespective of the year in which the
event triggering the profit or loss or asset and liability occurred;
105
v.4 Exceptional items have been separately disclosed in the Restated Summary Statements however
there are no extraordinary items, which need to be disclosed separately in the Restated Summary
Statements and
v.5 There are no revaluation reserves which need to be disclosed separately in the “Restated
Summary Statements”.
As a result of these adjustments, the amounts reported in the above mentioned statements/financial
information are not necessarily the same as those appearing in the audited financial statements for the
relevant financial years/period.
(b) The Company has not declared any dividend during three months ended June 30, 2008 and financial
year ended March 31, 2008, 2007, 2006, 2005 and 2004.
(c) For the financial year ended March, 2004 Segment Reporting and Related Party Transactions are not
presented as in the opinion of the Company, the relevant accounting standards ‘AS-17’ and ‘AS 18’
respectively became applicable to the Company from accounting period commencing from April 1,
2004.
(d) The Company has not prepared Statement of Tax Shelter of the Group for all the reported periods as
the Company has not recognized deferred tax benefits and liabilities based on the conservative policy
of the Company keeping in view accumulated loss and unabsorbed depreciation.
(e) We draw reference to Note 4 para C of Annexure D to Selected Notes to Accounts regarding preparing
the accounts on going concern basis.
4.
We have examined the following financial Information relating to the Group, proposed to be included in the
Offer Document, as approved by the Board of Directors of the Company and annexed to this report:
(a) Capitalization Statement as at June 30, 2008, enclosed in Annexure E.
(b) Details of Secured and Unsecured Loans taken, enclosed in Annexure F.
(c) Details of Investments, enclosed in Annexure G.
(d) Details of Sundry Debtors, enclosed in Annexure H.
(e) Details of Loans and Advances, enclosed in Annexure I.
(f) Details of items of Sales and Services, enclosed in Annexure J.
(g) Details of items of Other Income, enclosed in Annexure K.
(h) Statement of accounting ratios based on the adjusted profits relating to earnings per share, net asset
value, return on net worth, enclosed in Annexure-L.
(i) Details of Related Party Transaction (related parties within the meaning of AS 18 issued by ICAI),
enclosed in Annexure M.
(j) Details of Segment Reporting, enclosed in Annexure N.
(k) Detail of Contingent Liabilities, as appearing in Note 11 to Para C of Annexure D.
5. In our opinion, the CFI as referred to in Para 3 and 4 above, read with the respective significant accounting
policies and notes disclosed in Annexure D and after making adjustments and re-groupings as considered
appropriate and disclosed in Para 3 (a)(v) above, has been prepared in accordance with part II of Schedule
II of the Act and the Guidelines.
6.
This report should not, in any way be construed as a re-issuance or re-dating of any of the previous audit
reports issued by the auditors for the respective period and years nor should this reports be construed as a
new opinion on any of the financial statements referred to herein.
106
7.
This report is intended solely for your information and for inclusion in the Offer Document in connection
with the proposed Offer of the Company and is not to be used, referred to or distributed for any other
purpose without our prior written consent.
L. K. Shrishrimal
Partner
M.No.72664
For MGB & Co
Place: Noida
Dated: November 12, 2008
107
(Formerly known as ASC Enterprises Limited)
Annexure-A
Consolidated Restated Summary Statement of Assets and Liabilities of the Group
(Rs. In lacs)
Particulars
A
B
C
D
E
F
i
ii
J
Fixed Assets
Goodwill on Consolidation
Gross Block
Less :
upto date
Net Block
Total (a)
b) Tangible Assets
Gross Block
Less :
upto date
Net Block
Total (A) (a+b+c)
Investments
Advances :
Accrued Interest on
Investments
Inventories
Sundry Debtors
Loans and Advances
Total (C)
Secured Loans
Unsecured Loans
Current Liabilities and
Provisions
Advance Share Application
Money
Minority Interest
Deferred Tax Liability
Total (D)
Networth (A+B+C-D)
Represented by
Share Capital
Less: Share Suspense (Refer
Note 6 of Annexure D)
Less Debit Balance of Profit
and Loss Account
Less Miscellaneous
Expenditure to the extent not
written off or adjusted
Networth (i+ii)
As at
March 31,
2006
June 30,
2008
March 31,
2008
March 31,
2007
7,282.22
7,268.35
7,797.63
1,000.61
1,008.26
1,000.33
1,008.26
1,008.59
2,636.81
2,280.80
989.88
250.16
150.09
53.13
4,645.41
4,645.41
92,738.85
4,987.55
4,987.55
83,926.35
6,807.75
6,807.75
58,002.60
750.45
750.45
5,847.03
850.24
1,858.50
3,797.75
955.46
1,963.72
3,625.74
25,221.20
20,854.82
6,439.00
350.84
2,438.20
2,370.52
67,517.65
27,844.90
100,007.96
0.26
63,071.53
27,932.45
95,991.53
0.26
51,563.60
24,476.85
82,848.20
0.26
5,496.19
17,759.00
24,005.64
0.26
1,359.55
12,299.25
15,517.30
0.26
1,255.22
12,460.99
15,679.93
7.76
-
-
-
-
-
0.14
440.25
3,959.09
1,442.33
23,141.42
28,983.09
583.17
4,031.81
5,114.50
18,760.85
28,490.33
117.62
4,183.93
1,277.72
15,551.16
21,130.43
51.39
1,011.48
772.27
11,486.18
13,321.32
171.20
447.94
833.48
12,049.20
13,501.82
866.77
582.45
1,074.44
9,247.92
11,771.72
802.01
52,330.22
6,840.03
47,611.66
14,449.67
4,850.98
780.85
1,844.61
1,493.98
162.41
219.51
1,852.41
136,886.07
117,813.28
91,429.17
18,831.89
9,047.87
7,205.72
-
-
-
7,400.00
5,141.72
1,372.17
80.58
190,098.88
(61,107.57)
78.86
172,343.83
(47,861.71)
68.58
110,798.40
(6,819.51)
28,857.35
8,469.87
48.08
15,894.06
13,125.32
61.80
10,711.61
16,747.80
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
7,156.88
-
-
(2,874.65)
-
-
-
4,282.23
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
16,958.57
16,958.57
16,958.57
37,282.45
36,869.22
36,928.07
82,348.37
69,102.51
28,060.31
35,969.46
30,900.54
27,336.34
-
-
-
-
0.24
0.81
(65,389.80)
(61,107.57)
(52,143.94)
(47,861.71)
(11,101.74)
(6,819.51)
1,312.99
8,469.87
5,968.44
13,125.32
9,590.92
16,747.80
108
March 31,
2005
March 31,
2004
accounts for Restated Summary Statements as appearing in Annexure D to this report.
For and on behalf of the Board of Directors
For Dish TV India Ltd.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
109
Annexure-B
Consolidated Restated Summary Statement of Profit and Loss of the Group
(Rs. In lacs)
Particulars
INCOME
Sales & Services (Refer Annexure J)
Other Income (Refer Annexure K )
Total
EXPENDITURE
Purchases
Operating Costs
Personnel Cost
Financial Charges
Total
Profit/(Loss) before Tax & Exceptional
item
Exceptional item (Refer Note 10.1 to
Annexure D)
Exceptional item
-Deffered Tax
-Fringe Benefit Tax
-Wealth Tax
years Written Back/Provided
Profit/(Loss) after Tax but before
Minority Interest
Minority Interest
Profit/(Loss) after Tax and Minority
Interest
Impact of Change in Ownership Interest
Profit on sale of Subsidiary (Refer Note 1
below)
Less:Transfer to Restructuring Account
(Refer Annexure D)
Add: Balance received from Subsdiary
pursuant to the Scheme
Net Profit/(Loss) Before Adjustment
annexure D )
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
For the
year ended
March 31,
2004
16,468.87
210.06
16,678.93
(142.93)
16,536.00
41,278.51
993.14
42,271.65
465.55
42,737.20
19,203.07
887.68
20,090.75
66.23
20,156.98
5,273.78
149.18
5,422.96
(119.81)
5,303.15
4,558.44
412.40
4,970.84
(695.57)
4,275.27
10,259.63
478.85
10,738.48
368.58
11,107.06
1,472.66
12,103.96
1,594.80
1,413.64
5,815.62
2,635.31
4,726.81
29,762.80
2,488.80
33,327.70
4,204.23
4,138.62
18,057.54
5,786.53
15,703.29
83,706.71
120.31
22,512.34
2,201.33
3,114.52
9,086.44
1,760.95
6,236.26
45,032.15
984.64
8,048.05
701.26
1,104.21
3,086.69
434.30
488.44
14,847.59
2,148.79
2,715.56
803.19
1,240.89
137.40
334.85
476.91
7,857.59
8,587.28
742.07
859.03
1,313.29
118.66
186.10
480.42
12,286.85
(13,226.80)
(40,969.51)
(24,875.17)
(9,544.44)
(3,582.32)
(1,179.79)
-
-
-
-
-
12,084.30
(13,226.80)
(40,969.51)
(24,875.17)
(9,544.44)
(3,582.32)
(13,264.09)
1.72
17.21
0.13
10.28
60.92
0.51
(29.03)
26.61
0.58
18.91
-
-
0.56
-
-
(0.98)
-
-
4.40
1.68
(13,245.86)
(41,042.20)
(24,873.33)
(9,563.35)
(3,577.92)
(13,262.97)
-
-
-
1.82
13.72
15.68
(13,245.86)
(41,042.20)
(24,873.33)
(9,561.53)
(3,564.20)
(13,247.29)
(69,102.51)
-
(28,060.31)
-
(35,969.46)
-
(30,900.54)
177.00
(27,336.34)
-
(14,089.15)
-
-
-
-
4,315.61
-
0.10
-
-
32,685.92
-
-
-
-
-
96.56
-
-
-
(82,348.37)
(14,002.59)
(69,102.51)
(41,412.76)
(28,060.31)
(24,007.08)
(35,969.46)
(21,489.65)
(30,900.54)
(3,970.45)
(27,336.34)
(854.84)
756.73
370.56
(866.25)
11,926.30
392.53
(12,408.13)
(13,245.86)
(41,042.20)
(24,873.33)
(9,563.35)
(3,577.92)
(13,262.97)
Note:
1) Profit on Sale of Investment represents reversal of losses, reserves and goodwill on sale of investment in
subsidiaries.
110
2) The above statement should be read with the Significant Accounting Policies and Selected Notes to
Accounts for Restated Summary Statements, as appearing in Annexure D to this Report.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
111
Consolidated Restated Summary Statement of Cash Flow of the Group
Annexure-C
(Rs. In lacs)
Particulars
A)
B)
C)
Cash Flow from Operating Activities
Net Profit/(Loss) before Tax
Adjustment for :
Interest Income
Loss on Sale of Assets/impairment
Profit on sale of Fixed Assets
Profit on sale of Investments
Provision for Doubtful Debts and Advances
Exchange Adjustments
FCT Reserves
Interest Expenses
Balances Written Off
Miscellaneous Expenses Written Off
Operating Profit before Working Capital
Changes
Adjustment for :
Decrease/(Increase)in Inventories
Decrease/(increase) in Trade and Other
Receivables
Increase/(Decrease) in Trade and Other Payables
Cash Generated from Operations
Less : Direct Taxes Paid (net of Refunds)
Net Cash Flow from Operating Activities
Cash Flow from Investing Activities
Proceeds from Sale of Investments
Purchase of Investments
Security Received against Capital goods
Proceeds from Sale of Fixed Assets
Purchase of Fixed Assets (including Capital Work
in Progress)
Direct Taxes paid for Investing Purpose (Net)
Loans given to Others
Loan repaid by Others
Advance Share Application to Others
Share Application Money Refund Received
Interest Received
Net Cash Flow from Investing Activities
Cash Flow from Financing Activities
Advance Share Application Money Received
Repayment of Advance Share Application Money
Received
Interest paid
Proceeds from Long Term Borrowing
Proceeds/(Repayment) of Vehicle Loan
Proceeds from Short Term Borrowing
Repayment of Short Term Borrowing
Net Cash Flow from Financing Activities
Net Cash Flow during the period/year (A+B+C)
Cash and Cash Equivalents received pursuant to
the Scheme
Cash and Cash equivalents at the beginning of the
period/year
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
(13,226.80)
(40,969.51)
(24,875.17)
(9,544.44)
(3,582.32)
4,726.81
(192.54)
5.40
455.44
1,635.33
-
15,703.29
(654.04)
150.99
(24.87)
(34.55)
5,341.51
-
6,236.26
(582.82)
134.03
576.94
(32.08)
1,438.60
0.16
488.44
(31.28)
1.97
(42.04)
79.47
413.23
87.34
50.00
0.23
476.91
(275.55)
352.10
(24.02)
73.39
(58.85)
247.82
0.59
(6,596.36)
(20,487.18)
(17,104.08)
(8,497.08)
(2,789.93)
142.93
(465.55)
(66.23)
119.81
695.57
(1,550.27)
(2,259.60)
(4,115.76)
(3,568.13)
253.45
17,644.18
9,640.48
65.00
9,575.48
26,246.64
3,034.31
255.81
2,778.50
42,446.97
21,160.90
105.91
21,054.99
6,373.64
(5,571.76)
14.55
(5,586.31)
1,848.15
7.24
44.99
(37.75)
4.83
6,524.87
(6,500.00)
3.23
505.60
11.14
1,823.51
3,407.96
462.73
7.50
41.43
(8,744.11)
(28,970.67)
(36,185.98)
(10,613.62)
(734.52)
(11.70)
(2,489.11)
12.85
(11,227.24)
(26.64)
39.00
95.99
(28,834.22)
(1.69)
(2,074.00)
1,908.33
(700.00)
1,000.00
54.63
(35,481.97)
(8,850.75)
12,442.64
(300.00)
31.28
(1,596.25)
(2,925.51)
25.98
275.69
(3,309.43)
-
-
-
7,555.00
3,770.00
-
-
-
(1,370.00)
(0.45)
(336.00)
1,663.62
9.51
7,700.27
(11,057.81)
(2,020.41)
(3,672.17)
(3,836.07)
3,517.14
(41.04)
96,765.47
(66,513.00)
29,892.50
3,836.78
(1,321.97)
(41.26)
19,154.36
(3,001.50)
14,789.63
362.65
(92.70)
18.36
2,280.70
(1,270.00)
7,121.36
(61.20)
(242.47)
(7.72)
1,276.84
(1,690.00)
3,106.20
(240.98)
-
-
142.80
-
-
5,114.50
1,277.72
772.27
833.48
1,074.46
112
Particulars
Cash and Cash equivalents at the end of the
period/year
Cash and Cash Equivalents at the end of the
period/year comprises of:
Cash in hand
Balances with Scheduled Banks in Current
Accounts
Balances with Scheduled Banks in Short Term
Deposit Accounts
Balances with Scheduled Banks in Margin
Accounts
Balances with Scheduled Banks in Fixed Deposit
Accounts
(Pledge with Bank and Others)
Cheques/drafts/credit card slip in Hand
Total Cash and Cash equivalents
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
1,442.33
5,114.50
1,277.72
772.27
833.48
38.59
16.34
1.83
1.54
6.91
448.48
1,254.06
635.65
218.52
117.63
-
2,892.10
-
-
-
280.91
280.00
-
-
-
674.35
670.20
640.24
552.21
708.84
1,442.33
1.80
5,114.50
1,277.72
772.27
0.10
833.48
Notes
1
2
3
Accounting Standard 'AS-3' became applicable to the Company for the financial year ended March 31,
2005 hence above statement includes cash flow statement for the financial year ended March 31, 2005 and
onward.
Assets and Liabilities received pursuant to the Scheme of Arrangement and business acquired are not
considered in the above cash flow statement, being non cash transaction
The above statement should be read with the Significant Accounting Policies and Selected Notes on
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
113
Dish TV India Limited (Consolidated)
Annexure-D
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUMMARY OF SELECTED NOTES
TO ACCOUNTS TO THE RESTATED SUMMARY STATEMENTS
A)
SIGNIFICANT ACCOUNTING POLICIES
(a)
Accounting Convention:
i)
The Company generally follows mercantile system of accounting and recognizes income and
expenditure on accrual basis except those with significant uncertainties.
ii) The financial statements have been prepared on historical cost convention and in accordance
with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.
(b)
Fixed Assets:
I.
II.
(c)
Intangible fixed assets
i.
Goodwill arising on consolidation represents the excess of cost to the parent of its
investment in subsidiaries company over the parent’s portion of equity, at the date on
which investment in subsidiary is made.
ii.
The Group capitalized Computer Software and related implementation costs as intangible
assets, where it is reasonably estimated that the software has an enduring useful life.
iii.
License fees paid for acquiring license to operate Direct to Home (DTH) services are
capitalized as intangible assets.
Tangible fixed assets
i.
Tangible fixed assets are stated at Cost less accumulated depreciation. Cost includes
capital cost, freight, installation cost, duties and taxes and other incidental expenses
incurred during the construction/installation stage attributable to bringing the assets to
working condition for its intended use.
ii.
All capital costs and incidental expenditure incurred during pre operational period and
advances paid for capital expenditure are shown as Capital work- in-progress.
iii.
Customer premises equipments are capitalized on its activation.
Depreciation/Amortization:
i.
Depreciation is provided on tangible fixed assets including leased assets at the rates adopted in
the accounts of respective subsidiaries as permissible under applicable law, on straight line
method from the time they are available for use, so as to write off their cost over estimated
useful life of the assets. However the depreciation rates for assets listed below are higher than
the minimum rates specified in Schedule XIV of the Companies Act, 1956:-
S.No.
1.
2.
3.
4.
5.
6.
7.
8.
Particular
Customer Premises Equipment
Network Equipment
Equipment on rental
Demonstration Equipment
Decoders
Office Equipments
Software
Signage
114
Rate
20.00%
14.29%
20.00% to 40.00%
20.00% to 33.33%
10.00%
4.75% to 14.29%
16.21% to 20.00%
33.33%
S.No.
9.
10.
11.
ii.
Particular
Digital Posters
Furniture and Fixture
Vehicle
Rate
20.00%
6.33% to 14.29%
9.50% to 14.29%
No part of goodwill arising on consolidation is amortized whereas goodwill arising on
acquisition is amortized over a period of five years
iii. Leasehold improvements are amortized over the period of lease.
iv. Computer Software is amortized based on managements estimate of useful life of five years or
license period whichever is shorter.
v.
License fee is amortized over the period of license.
vi. Depreciation on other intangible assets is amortized over the economic useful life of the assets
as estimated by the management.
(d)
Revenue Recognition:
i.
Subscription revenue is recognized on completion of service.
ii.
Lease rentals is recognized in terms of the operating lease agreements.
iii. Incomes from other services are recognized on the completion of services. Period based
services are accounted proportionately over the period of service.
iv. Sale of goods are recognized when risk and rewards of ownership are passed on to the
customer, which is generally on dispatch of goods.
v.
(e)
(f)
In the case of sales under deferred payment scheme, amounts of installments receivable are
allocated towards revenue from sale of radios and network airtime revenue based on
managements’ estimates. The amount allocated towards network revenue is recognized on
accrual basis over the period of the contract.
Investments:
i.
Investment intended to be held for more than one year from the date of acquisition are
classified as long term investment and are carried at cost. Provision for diminution in value of
these investments is made to recognize a decline other than temporary.
ii.
Current Investments are stated at cost or fair value, whichever is lower.
Inventories:
Inventories are valued at the lower of cost or net realizable value and cost is determined on
weighted average basis except in case of three subsidiaries where cost is determined on first in first
out basis. The effect is unascertained. Stock under deferred payment scheme is stated at
proportionate value of future rental revision.
(g)
Retirement Benefits:
The Accounting Standard (AS) 15, “Employee Benefits (revised 2005)”, issued by the Council of
Institute of Chartered Accountants of India, originally comes into effect in respect of the
accounting periods commencing on or after April 01, 2006 and was mandatory in nature from that
date. Consequently, the above standard becomes applicable to the Group for any period on or after
the effective date. However, subsequently the Council of the Institute has deferred the mandatory
applicability of the standard for all periods on and after 7 December 2007. The Group adopted the
Accounting Standard (AS) 15, “Employee Benefits (revised 2005)” for the first time in preparing
the financial statements for the period April 01, 2006 to March 31, 2007. For the purpose of the
115
restated statements, AS-15 (revised) has not been applied for the years ended March 31, 2006,
2005 and 2004 as the same was not applicable in those years. The restated financial statements for
those years have been prepared in compliance with the erstwhile Accounting Standard (AS) 15.
Consequently significant impact, if any, of applicability of the new standard has not been
recognized in the restated statements for the years ended March 31, 2006, 2005 and 2004.
I.
For the year ended March 31, 2006, 2005 and 2004
Provident fund and gratuity benefits
Retirement benefits to employees comprise contributions to provident fund and gratuity. Provident
fund contributions are charged to the Profit and Loss Account. The contribution to employees
gratuity fund Scheme of Life Insurance Corporation (LIC) is charged to profit and loss account
except in a case of one subsidiary where liability is provided based on actuarial valuation at year
end. Further, provision is made for the shortfall, if any, based on actuarial valuation at the year
end by an independent actuary. Effective from 31st March, 2006, the Company has discontinues
the payment of contribution to gratuity fund scheme of LIC.
Leave Encashment
Provision for leave encashment is made on the basis of actuarial valuation at year-end and
incremental provision is charged to the Profit and Loss Account on accrual basis.
II. For the year ended March 31, 2008 ,2007 and three months ended June 30, 2008
Defined contribution plan
In respect of retirement benefits in the form of provident fund, the contribution payable by the
Group for a year is charged to the profit and loss account for the year.
Defined payment plan
The present value of defined benefit obligation and the related current service cost are measured
using the projected unit credit methods with actuarial valuation being carried out at each balance
sheet date.
Leave encashment:
Liability for leave encashment is provided on the basis of actuarial valuation at the balance sheet
date and is not funded.
Gratuity
Gratuity liability for the year is provided on the basis of actuarial valuation as per defined
retirement plan covering eligible employees. The plan provides payment to vested employees on
retirement, death or termination of employment of an amount based on the respective employee’s
salary and the term of employment with the Company. The obligation is not funded except is the
case of two subsidiaries.
The Group has changed the method of computing provision for gratuity and leave encashment
from the method prescribed under AS 15 (Employee Benefit) to AS 15 (Employee Benefit)
(revised 2005). Pursuant to the adoption, the transitional obligation of the Company amounting to
Rs 22.40 lacs has been adjusted against general reserve as provided in the AS.
(h)
Employees Stock Option Scheme:
In respect of stock option granted pursuant to the Company’s Stock Option Scheme, the intrinsic
value of option is treated as discount and accounted as employee compensation cost over the
vesting period.
116
(i)
Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of
transaction. Monetary assets and liabilities denominated in foreign currency are translated at the
exchange rate prevailing at the balance sheet date and gains or losses on translation are recognized
in Profit and Loss account. Non monetary foreign currency items are carried at cost.
(j)
Borrowing Cost:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are
capitalized as a part of such assets. All other borrowing costs are charged to revenue.
(k)
Taxes on Income:
Tax expense comprise of current, deferred and fringe benefit tax. Current income tax and fringe
benefit tax is measured as the amount expected to be paid to the tax authorities in accordance with
Indian Income Tax Act. Deferred Tax is recognized, subject to consideration of prudence, on
timing difference, being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more subsequent periods and
measured using relevant enacted tax rates. At the balance sheet date the company assesses
unrealized deferred tax assets to the extent they become reasonably certain or virtually certainty of
realization as the case may be.
(l)
Lease:
Operating Lease
Lease of the assets where all the risk and rewards of ownership are effectively retained by the
lessor are classified as operating lease. Lease payments/revenue under operating lease are
recognized as an expense/income on accrual basis in accordance with respective lease agreement
Finance Lease
Assets acquired under finance lease are capitalized and the corresponding lease liabilities is
recorded at and amount equal to the fair value of the lease assets at the inception of the lease.
Initial cost incurred in connection with the specific leasing activities directly attributable to
activities performed by the Company is included as part of the amount recognized as an asset
under the lease.
(m)
Earning Per Share:
Basic earnings per share is computed and disclosed using the weighted average number of
common shares outstanding during the period. Diluted earnings per share is computed and
disclosed using the weighted average number of common and dilutive common equivalent share
outstanding during the period except where the result would be anti dilutive.
(n)
Impairment:
At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine
whether there is an indication that those assets have suffered impairment loss. If any such
indication exists, the recoverable amount of assets is estimated in order to determine the extent of
impairment loss. The recoverable amount is higher of the net selling price and value in use,
determine by discounting the estimated future cash flows expected from the continuing use of the
asset to their present value.
(o)
Provision, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is
present obligation as a result of past events and it is probable that there will be an outflow of
117
resources. Contingent Liabilities are not recognized but are disclosed in the notes to accounts.
Contingent Assets are neither recognized nor disclosed in the financial statements.
(p)
Miscellaneous Expenses:
Preliminary expenses till March 31, 2006 are written off over five years except in the case of one
subsidiary preliminary expenses are written off over 10 years.
B)
COMPARABILITY
The figures for the three months period ended June 30, 2008 are not comparable with figures for all
previous financial years.
C)
1.
SUMMARY OF SELECTED NOTES TO ACCOUNTS
Background
Dish TV India Limited (herein referred to as “the parent company”, “the company” or “Dish”) along with
its subsidiaries (collectively known as “the Group”) encompassing Direct to Home (DTH) Satellite
Television Service since 2003 – 2004 and also provide teleport service, customer support, transponder
space leasing, etc.
The group derives revenue mainly from subscription and network revenue from customers, lease rent on
equipment meant for using service provided by the group, teleport services, trading in electronic devices
etc.
During the year 2006-07, the name of the company has been changed from ASC Enterprises Limited to
Dish TV India Limited.
2.
Use of Estimates:
The preparation of the consolidated financial statements (CFS) in accordance with the Generally Accepted
Accounting Principles requires the management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements
and the reported amount of revenue and expenses of the year. Actual results could differ from those
estimates.
3.
Shareholder’s Fund:
3.1 Capital Structure:
(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Share Capital
Year ended
March 31, 2008
A. Authorized Capital
1,000,000,000 (730,000,000 ) Equity Shares of Re. 1 each
B. Issued, Subscribed and Paid-up
428,222,803 (428,222,803) Equity Shares of Re. 1 each fully paid up
Total
10,000.00
7,300.00
4,282.23
4,282.23
4,282.23
4,282.23
3.2 Reserves and Surplus:
(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Particulars
General Reserve
As per last Balance Sheet
Less: Debit balance in Profit & Loss Account per contra
118
16,958.57
16,958.57
Year ended
March 31, 2008
16,958.57
16,958.57
-
Total
4.
-
Going Concern:
The restated CFS has been prepared assuming the Company will continue as a going concern. The
management believes that it is appropriate to prepare these financial statements on a ‘going concern’ basis,
for the following reasons:
4.1 The Company hold DTH license from Government of India for a considerable long time.
4.2 The Company is the first to launch DTH services in India. This type of business necessitates long
gestation period to stand on its feet. Being first mover, the Company has incurred huge expenses on
awareness of the product, brand building on a pan India basis. The benefit of these expenses will accrue
in the future years.
4.3 The Promoters are fully seized of the matter and is of the view that going concern assumption
holds true and that the Company will be able to discharge its liabilities in the normal course of
business. The Company would be able to meet its fund requirement with the various funding
option including debts. Hence no adjustment is made on account of reclassification of assets and
liabilities for the going concern assumption.
5.
Basis of Consolidation:
5.1 The Consolidated Financial Statements (CFS) of the Group are prepared under the historical cost
convention on going concern basis (except in case of two subsidiary where going concern is not
certain) in accordance with Generally Accepted Accounting Principles in India and the Accounting
Standard (AS) 21 on “Consolidated Financial Statements” issued by the Institute of Chartered
Accountants of India (ICAI), to the extent possible in the same format as that adopted by the parent
company for its separate financial statements by regrouping, recasting or rearranging figures wherever
considered necessary. The significant inconsistencies in accounting policies are disclosed wherever
applicable and no adjustment are made in CFS for such inconsistencies.
The consolidation of the financial statements of the parent company and its subsidiaries is done to the
extent possible on line to line basis by adding together like items of assets, liabilities, income and
expenses. All significant intra group transactions, balances and unrealized inter company profits have
been eliminated in the process of consolidation.
5.2 The parent company and its subsidiaries prepare its financial statements under the historical cost
convention, in accordance with Generally Accepted Accounting Principles (GAAP) prevalent in India.
5.3 The CFS includes the Financial Statements of the parent company and the subsidiaries as listed in the
table below. Subsidiaries are consolidated from the date on which effective control is acquired and are
excluded from the date of transfer/disposal.
Name of Subsidiary
Direct Subsidiaries
Agrani Convergence Limited.
Agrani Satellite Services Limited.
Agrani Wireless Services Limited.*@
Enterprises (Gibraltor) Limited. *
Services Ltd (Formerly known as
Agrani Telecom Limited).#
Indirect Subsidiaries
Quick Call Private Limited.*
Smart Talk Private Limited.*
31 Mar
31 Mar
31 Mar
31 Mar
'08
'07
'06
'05
30 June
'08
31 Mar
'04
51.00
100.00
-
51.00
100.00
-
51.00
100.00
-
51.00
100.00
-
100.00
100.00
98.80
100.00
100.00
98.80
-
-
-
-
100.00
100.00
100.00
100.00
100.00
-
-
-
-
-
-
-
50.96
50.96
50.96
50.96
119
Name of Subsidiary
Bhilwara Telenet Services Limited.*
Procall Private Limited.*
30 June
'08
-
31 Mar
31 Mar
31 Mar
31 Mar
'08
'07
'06
'05
50.96
99.37
31 Mar
'04
50.96
99.37
Essel Telecom Holdings Limited.*
98.01
98.01
* Ceased to be subsidiary on 31st March, 2006.
# Ceased to be subsidiary on 28th August, '2003 and again became subsidiary on 1 April, '2006 on transfer of
investment to the parent company under the Scheme of Arrangement.
@ Holding reduced to 52.294% on April 13, 2005.
5.4 Minority interest in subsidiary represents the minority shareholders proportionate share of the net assets
and net income.
5.5 In case of subsidiaries sold on 31st March, 2006 (as per listed above in para 5.3), for consolidation
purposes Profit and Loss account for the previous year ended 31st March, 2006 is considered on line by
line basis as per the audited accounts.
5.6 In case of subsidiaries acquired or ceased to be subsidiaries during a year (as per listed above in para
5.3), for consolidation purposes Profit and Loss account for year is considered on line by line basis
based on the management accounts and therefore unaudited.
5.7 In the case of subsidiaries where going concern assumption is in doubt, the accounts are restated on net
realizable value estimated by the management.
6.
The Scheme of Arrangement
During the financial year ended 31st March, 2007, The Scheme of Arrangement (the Scheme) under
Section 391 to 394 read with Section 78, 100 and other applicable provisions of the Companies Act, 1956
between Zee Entertainment Enterprises Limited. (ZEEL) (formerly known as Zee Telefilms Limited), Siti
Cable Network Limited (SITI) and New Era Entertainment Network Limited. (NEENL) and Dish TV India
Limited (the Company) (formerly known as ASC Enterprises Limited) and their respective shareholders
have been sanctioned by the Hon’ble High Court of Judicature at Mumbai and High Court of Judicature at
New Delhi vide their respective order dated 12th January, 2007 and 18th December, 2006 and a copy of
these orders have been filed with the respective Registrar of Companies on 17th January, 2007 and 19th
January, 2007 respectively. The Scheme has been given effect in financial statements for the year ended
31st March 2007 except actual allotment and reorganization of share capital which has taken place in the
financial year ended 31st March, 2008.
6.1 Pursuant to the Scheme, Direct Consumer Services undertaking (DCS) of ZEEL including investment
made by ZEEL in SITI and the entire business and whole of the undertaking of the transferor
Companies i.e. SITI and NEENL have been transferred to and vested in the Company on appointed
date i.e.1st April, 2006 on going concern basis. The assets and the liabilities of DCS undertaking of
ZEEL at book value and of SITI and NEENL at fair value accounted on purchase method as per
Accounting Standard-14 have been transferred to and vested in the Company as under.
(Rs. in lacs)
Particulars
DCS undertaking of ZEEL
SITI
NEENL
Gross Block of Fixed Assets
3,204.42
757.24
265.17
Less: Depreciation
Net Block of Fixed Assets
475.67
2,728.75
757.24
265.17
Capital Work in Progress
Investments
Share Application Money
Total Assets (A)
120
-
3,293.48
-
193.64
10.00
-
14,197.14
5,000.00
6,900.00
-
1,057.76
4,248.97
17,119.53
10,118.48
11,414.14
Particulars
Loan Funds
Total Liabilities (B)
Surplus/(Deficit) (A-B)
SITI
NEENL
3,263.24
10.70
71.00
0.20
14,353.63
11,244.95
3,263.44
14,364.33
11,315.95
13,856.08
(4,245.85)
98.19
6.2 Reorganization of Share Capital
6.2.1 The paid up equity share capital of the Company had been sub-divided on 25th September,
2006 by splitting 71,568,765 equity share of Rs. 10 each into 715,687,650 equity share of Re. 1
each.
6.2.2 Pursuant to the Scheme following effect are given in the financial statements for the year ended
31st March, 2007 considering the shareholding pattern of ZEEL on record date i.e. 20th
February, 2007:•
997,203,560 equity shares of Re 1 each fully paid up to be issued in the ratio of 23 equity
shares of Re 1 each fully paid up of the Company for every 10 equity shares of Re 1 each
fully paid up of ZEEL.
•
Reduction of above equity share capital by way of cancellation of 3 equity shares of Re 1
each fully paid up for every 4 equity shares of Re. 1 each fully paid up resulting in final
issues of 249,300,890 equity shares of Re. 1 each fully paid up.
•
Pending actual action, the difference on allotment, cancellation, reduction and issue of
Share Capital as above has been taken to the “Share Capital Suspense” under the head share
capital. The actual action has been taken during the year ended 31st March, 2008.
6.2.3 The share capital of the Company Rs. 715,687,650 divided into 715,687,650 equity shares of Re
1 each fully paid up had been reduced by cancellation of 3 equity shares of Re 1 each fully paid
up for every 4 equity shares of Re 1 each fully paid up. The resultant Share Capital is Rs.
1,789.22 lacs. Pending actual reduction Rs. 5,367.66 lacs has been taken to ‘Share Capital
Suspense’ under the head share capital.
6.3 Pursuant to the Scheme, surplus Rs. 16,980.97 lacs in the Restructuring Account after carrying out
following adjustments as per the Scheme has been transferred to General Reserve Account.
6.3.1 The value of net assets of DCS undertaking of ZEEL as reduced by the face value of equity
shares to be issued amounting to Rs. 11,363.07 lacs has been credited to Restructuring Account
as prescribed in the Scheme.
6.3.2 The value of net assets/ (liabilities) of SITI and NEENL amounting to (Rs. 4,439.48 lacs) and
Rs. 93.20 lacs respectively, as reduced by the cancellation of the investments amounting to Rs.
193.64 lacs and Rs. 5.00 lacs respectively has been (debited)/credited to Restructuring Account
6.3.3 Balance in Share Premium Account and Profit and Loss Account (Debit Balance) amounting to
Rs. 37,282.45 lacs and Rs. 32,685.93 lacs respectively has been transferred to Restructuring
Account.
6.3.4 Reduction in Share Capital Rs. 5,367.66 lacs has been transferred to Restructuring Account.
Pursuant to demerger of DCS undertaking of ZEEL, SITI and NEENL became wholly owned
subsidiaries of the Company and hence upon the merger of the Subsidiaries with the Company, entire
equity share capital of these Companies stand automatically cancelled and hence there was no any
issue and allotment of shares of the Company.
6.4 The transactions of NEENL, SITI and DCS business of ZEEL between the appointed date and the
effective date are deemed to be made on behalf of the Company. Accordingly, all assets, liabilities,
121
income and expenditure of the demerged undertakings for the said period are taken over by the
Company and given effect in those financial statements.
6.5 The assets, license and agreements etc. transferred pursuant to the Scheme of Arrangement are in the
process of registration/transfer in the name of the Company.
7.
During the financial year ended 31st March, 2007, the Company acquired DTH Equipment Unit Business
(DEU) of Essel Agro Private Limited on a going concern basis vide agreement to transfer DTH Equipment
Unit (DEU) Business dated 31st December, 2006. Pursuant to the agreement following assets and liabilities
have been acquired and are included in these financial statements. The goodwill arising on acquiring of
DEU Business amounting to Rs. 4,511.78 lacs (including purchase consideration Rs. 5.00 lacs) has been
treated as intangible asset.
(Rs. in lacs)
Particulars
Fixed Assets
Total Assets
Net Deficit
8.
Amounts (Rs.)
15,034.97
214.03
15,249.00
19,755.78
4,506.78
Taxes on Income
8.1 In view of the losses incurred during all the years/period covered in Restated Summary Statements and
brought forward losses, provision for taxation is not required under the provisions of Income Tax Act,
1961.
8.2 The component of the deferred tax balance accounted in the case of a subsidiary are as under:(Rs. in lacs)
Particulars
Three Months Period
ended
3oth June, 2008
Deferred Tax Assets
Fiscal allowances carried forward
Total
Deferred Tax Liabilities
Depreciation
Total
Deferred Tax Balance (Net) - Liabilities
Year ended
31st
March,2008
Year ended
31st
March,2007
1,091.21
1091.21
923.55
923.55
632.32
632.32
1171.79
1171.79
80.58
1002.41
1002.41
78.86
700.90
700.90
68.58
8.3 As per the requirement of ‘Accounting Standard -22’ issued by The Instituted of Chartered Accountant
of India, applicable from period 1st April, 2001, the accumulated deferred tax (net) assets of the Parent
Company not taken into accounts based on conservative policy of the parent Company is as under:(Rs. in lacs)
Particulars
Three Months Period
ended
June 30, 2008
Deferred Tax Assets
Depreciation
Disallowances under the Income Tax Act
Total
Depreciation
Total
Deferred Tax Balance (Assets)(Net)
9.
Year ended
March 31,
2008
Year ended
March 31,
2007
28,515.82
2,888.65
272.89
31,677.36
24,523.68
1,257.40
256.15
26,037.23
12,211.92
313.99
12,525.91
31,677.36
26,037.23
911.47
911.47
11,614.44
Capital work in progress comprises of equipments [including customer premises equipment (CPE)], capital
goods in transit, capital advance and pre operative project expenses (to be eventually allocated to fixed
122
assets on commencement of commercial operation). The CPE are subject to physical verification and
reconciliation.
10. Others Disclosures
10.1 Exceptional item expensed in the financial year ended 31st March, 2004 represents provision for
doubtful advance Rs. 12,084.30 lacs (including Rs 8277.08 lacs due from subsidiary of a
shareholder) relating to multi mission satellite system project. The approval of the Reserve Bank of
India is yet to be obtained.
10.2 Sharing of Expenses:
The expenses under various heads are net of expenses shared other related parties as per
arrangement.
10.3 As per advice received and in terms of DTH license agreement, the Company till March 31, 2008
provided license fee on revenue from DTH subscribers. However based on recent judgment during
August 2008 of Telecom Dispute Settlement & Appellate Tribunal in the case of one of the DTH
service provider, the Company, as an abundant precaution, has also provided license fee on other
revenue accruing from DTH license related activities for all the past years.
10.4
During the financial year ended 31 March 2005, the Company had granted rights to distribution,
marketing and aggregation (DTH Service) w.e.f. 1st April 2004 for a lump sum consideration of Rs
410 lac per annum to New Era Entertainment Network Limited (NEENL) which has been terminated
on 15th June, 2005. The Company has provided license fees payable to Pay & Accounts Officer,
Ministry of I & B, New Delhi on the revenue accounted by NEENL from these services.
10.5 As at the balance sheet date, the Company has following foreign currency payable and receivables
which are not hedged by a derivative instrument or otherwise
(Rs. in lacs)
Particulars
Three Months Period ended
June 30, 2008
Value in
USD $
Receivables
Payables
Year ended
March 31,
2008
Value in
USD $
Value
in Euro
Equivalent to
INR Rs.
Value in
Euro
Equivalent to
INR Rs.
4.27
-
182.19
4.02
-
159.18
347.76
-
15,030.17
154.17
0.04
6,192.92
10.6 Employee Stock Option Plan –ESOP-2007
The Company instituted the Employee Stock Option Plan – ESOP-2007 to grant equity based
incentives to its eligible employees. The ESOP-2007 (“The Scheme”) had been approved by the
Board of Directors of the Company at their meeting held on June 28, 2007 and by the shareholders of
the Company by way of special resolution passed at their Annual General Meeting held on August
03, 2007, to grant aggregating 4,282,228 options ( not exceeding 1% of the issued and paid up
equity share capital of the Company as on March 31, 2007), representing one share for each
option upon exercise by the employee of the Company at a exercise price determined by the
Board/remuneration committee. The Scheme covers grant of options to the specified permanent
eligible employees of the Company as well as of its subsidiaries and also to non-executive directors
of the Company including independent directors. Pursuant to the Scheme, the Remuneration
Committee during August 2007 and April 2008 has granted 3,073,050 options and 184,500
options respectively to specified eligible employees of the Company at the market price determined
as per the SEBI Guidelines.
The options granted under the Scheme shall vest not less than one year and not more than five years
from the date of grant of options. Under the terms of the Scheme, 20% of the options will vest in the
employee every year equally. The Option grantee must exercise all vested options within a period of
four years from the date of vesting. Once the options vest as per the Scheme, they would be
exercisable by the Option Grantee at any time and the shares arising on exercise of such options shall
not be subject to any lock-in period.
123
The movement in the options granted is as under :Particulars
Options Outstanding at beginning of
period (Nos.)
Add: Option Granted (Nos.)
Less: Option Lapsed (Nos.)
Options Outstanding at end of the period
(Nos.)
Period ended June 30, 2008
2,926,150
Year ended March 31, 2008
-
184,500
1,227,100
1,883,550
3,073,050
146,900
2,926,150
The above Options have been granted at the market price as defined under the SEBI Guidelines,
hence there being no intrinsic value (being the excess of the market price of share under ESOP
over the exercise price of the option) on the date of grant, therefore Company is not required to
account for the accounting value. The Shareholders and Remuneration Committee in their respective
meeting, held on August 28, 2008 have approved re-pricing of stock options.
10.7 Debit and Credit balances of parties including subscribers, distributors and dealers’ are subject to
confirmation/ reconciliation and effect if any, will be considered on its determination.
11. Contingent Liability not provided for
11.1
(Rs. in lacs)
Particulars
Estimated amount of contract
remaining to be executed on
capital account and not
provided for (Net of advance)
Bank guarantees given on
behalf of subsidiaries
Guarantees given on behalf of
other company
Guarantees given by bank
Three
Months
Period
ended
June 30,
2008
Year
ended
March 31,
2008
Year
ended
March 31,
2007
Year
ended
March 31,
2006
Year
ended
March 31,
2005
Year
ended
March 31,
2004
4,262.18
4,453.93
4,523.07
1,754.86
0.20
0.20
-
-
-
-
100.00
400.00
6,056.40
6,056.40
240.00
40.00
540.00
540.00
5,011.10
5,050.05
5,043.27
5,063.27
[Above Includes guaranteed by
a related party]
4,908.60
4,908.60
4,000.00
4,000.00
4,000.00
4,000.00
Claim against the company not
479.85
479.85
991.44
961.44
31.44
167.75
Legal Cases against the
company.
11.2 The Entertainment Tax Authorities, Noida has raised a demand of Rs. 404.60 lacs on account of
entertainment tax for the period from November, 2003 to February, 2004. The Company has filed
petition against the demand, which is pending. Further the authorities have intimated a total demand
of Rs. 920.20 lacs till 31st March, 2007.
11.3 Entertainment Tax demand Rs. 116.75 lacs (estimated on the basis of various notices issued from
time to time) raised by various entertainment tax authorities of Utrakhand state have been challenged
and the petition is pending before the High Court. The demand has been stayed by the High Court.
Notice for further period has been issued wherein the demand has not been quantified.
124
11.4 The Company has given a guarantee for the performance of the term and conditions of satellite
capacity agreement between a subsidiary of the company namely Agrani Satellite Services Limited
and the vendor, which is strategically important for the business of the Company.
11.5
One of the subsidiary company has received a demand notice from Sales Tax Authorities amounting
to Rs. 960.00 lacs against which the Sales Tax Authorities had recovered Rs. 22.31 lacs directly by
attaching company’s bank account. This liability was disputed by the Company and appeal filed
before the appellate authorities and the said demand was cancelled by them. The Sales Tax
Department issued refund orders for the amount recovered by them, which is under process.
12 Lease
12.1 In respect of assets taken on operating lease
The Group’s significant leasing arrangements are in respect of operating leases taken for offices,
residential premises, transponder etc. These leases are cancelable / non cancelable operating lease
agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The
initial tenure of the lease generally is for 11 months to 120 months. The details of assets taken on
operating lease are as under:(Rs. in lacs)
Particulars
Lease
rental
Charges for the
period
(net
of
shared cost)
Sub-lease payment
received
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
1,466.38
4,438.53
Year ended Year ended Year ended Year ended
31st March, 31st March, 31st March, 31st March,
2007
2006
2005
2004
4,040.96
202.22
692.72
550.84
Future Lease Rental obligation payable (Under non-cancelable lease)
Not later than one
year
523.24
483.15
1,411.19
Later than one year
but not later than
five years
1,534.34
1,561.27
70.59
More than five
years
361.92
388.00
-
3,849.59
2,190.51
685.03
-
-
-
-
-
-
-
-
-
-
-
-
12.2 The Company has leased out assets by way of operating lease and the gross book value of such
assets, its accumulated depreciation and depreciation for the period / year is as given below.
(Rs. in lacs)
Year ended
31st March,
2007
Year ended
31st March,
2006
Year ended
31st March,
2005
Year ended
31st March,
2004
2,141.23
6,728.87
2,729.33
Gross Value of the
Assets
76,526.34
69,117.47
47,219.24
Accumulated
21,011.17
17,156.83
4,600.02
Depreciation
Depreciation for the
year/ period
3,854.34
12,556.81
4,460.91
Future Lease Rental revenue (Under non-cancelable lease)
196.88
152.72
253.09
5,158.91
2,597.40
659.91
199.60
301.40
351.76
233.86
100.62
80.92
Particulars
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Lease rental income
for the period
Not later than one
year
Later than one year
but not later than five
years
More than five Years
8,229.09
7,371.79
4,556.00
231.12
-
-
20,102.41
-
19,639.27
-
14,475.65
-
4,382.54
-
-
-
125
12.3 The group has sold radios on hire-purchase basis. Future minimum lease payments receivable at the
end of the period/years are as follows.
( Rs.in lacs)
Particulars
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Year ended
31st March,
2007
Year ended
31st March,
2006
Year ended
31st March,
2005
Year ended
31st
March,
2004
-
-
-
-
73.16
18.35
-
-
-
-
43.19
29.96
8.97
9.38
Not later than one
year
Later than one year
but not later than five
years
More than five Year
Note:1)
Since the radios are sold at cost and a part of the total receipts are allocated towards such cost, the
present value of the future minimum lease payment receivable is not ascertainable.
2)
Few subsidiaries ceased to be subsidiary on 31st March, 2006, hence their closing balance are not
disclosed.
13 Significant Change in Accounting PoliciesSubsidiaries
a.
DEFERRED REVENUE EXPENSES
In the case of one subsidiary, capital issue expenses and expenses incurred on store set up cost
including advertisement and marketing expenses on launch of new stores, expenses incurred on
conceptualization, feasibility and other pre-set costs were deferred and amortized over five years. In
the Restated Summary Statements these expenses are appropriately adjusted in respective years in
which the same were originally incurred. The adjustments pertaining to financial years ended on or
before 31st March, 2003 are adjusted in the opening balance in profit and loss account as at 1st April,
2003.
b.
PRELIMINARY EXPENSES
In the case of subsidiaries, preliminary expenses were fully written off as against the policy of
amortize over five or ten years, as the case may be. In the Restated Summary Statements of Profit and
Loss Account, the expenses are amortized as per the policy. The adjustments pertaining to financial
years ended on or before 31st March, 2003 are adjusted in the opening balance in profit and loss
account as at 1st April, 2003.
c.
RETIREMENT BENEFITS
During the financial year ended 31st March, 2004, 2005 and 2006 company ‘ s contribution to
employee gratuity find scheme of Life Insurance Corporation of India Limited was charged to profit
and loss account. For Restated Summary Statements, to realign with the relevant accounting standard
prevailing on that date, the gratuity liability as at balance sheet date has been considered on actual
valuation made by independent actuary. The adjustments pertaining to financial years ended on or
before 31st March, 2003 are adjusted in the opening balance in profit and loss account as at 1st April,
2003.
14.
Auditors Qualifications
14.1 Auditors qualifications/remarks, which require any corrective adjustment in the financial
information, are as follows:I. Holding Company
126
a.
The auditors have qualified the report for the financial year ended 31st March, 2004 and 2005
for non recoverable advances aggregating to Rs.12, 284.30 lacs included in other advances due
from foreign companies as a part of the project taken over. Accordingly, adjustments are made
to the financial statement, as restated for the year ended 31st March, 2004 to account for the loss
of Rs. 12,084.30 lacs on such advances and balance Rs. 200.00 lacs recovered.
b.
Balance Rs. 9,440.10 lacs are considered good and recoverable based on the subsequent event
for the project under implementation undertaken by the subsidiary and also in view of long term
II.
Subsidiaries
a.
b.
qualified the report for non compliance of AS-28 “Impairment of Assets”. Necessary adjustment
has been made in respective previous year for impairment of assets.
14.2 Auditor qualification/ remarks, which do not require any corrective adjustment in the financial
information are as follows:I.
Holding Company
a.
for the project under implementation by the subsidiary and also in view of long term
b.
2006, the Company has given interest free loans to certain companies, which is not in
accordance with provision of sub section (3) of section 372 A of the Companies Act, 1956.
c.
for not providing exchange difference loss of Rs 1,029.05 lacs and Rs. 1072.79 lacs respectively
as required by AS -11 on realignment of foreign exchange advances Rs. 12,284.30 lacs. The
fully provided in the accounts. (Refer Note 14.1.I)
d.
e.
II.
127
•
•
•
•
a.
b.
company. The Company has applied to the Registrar of Companies, Delhi for restoration
of its private limited company status. Pending approval, the financial statements of the
a.
b.
a.
b.
2007 that in view of discontinuation of major part of business activity going concern status is
in doubt. Accordingly fixed assets, current assets, loans and advances have been carried at
estimated net realizable value by ACL.
•
2006 that pre-operative expenses incurred on satellite service project are for doing ground
work and creating capabilities for promoting and implementing such project. In case, these
expenses can not be capitalized with the fixed assets on completion of the project, these will
be treated otherwise, which may erode the net worth of ASSL. Further the auditor in the report
for the financial year ended 31st March, 2005 and 2006 have expressed doubt on going
concern basis of ASSL. In view of significant progress towards in the project, renewed
128
authorization from Govt. of India, entering into a satellite capacity agreement with the vendor
and additional funds provided by the holding company, the financial statements for the year
ended 31st March, 2007 have been prepared on going concern basis.
•
The auditors have qualified the report for financial year ended 31st March, 2005 and 2006,
for non compliance of AS-13 “Accounting for Investment” related to investment in fellow
subsidiaries and effect of this on loss for the year and net worth of ATL. These investments
are in fellow subsidiaries hence the qualification has no effect on the restated summary
statement of profit and loss of the group as being inter company transaction eliminated in the
process of consolidation.
•
a.
The auditors have qualified the report for financial year ended 31st March, 2004, 2005
and 2006 that AWSL has given interest free loans, not in accordance with the provision of
b.
The auditors have reported for the financial year ended 31st March, 2005 and 2006
regarding non providing for permanent diminution in the value of investment as required
by AS-13 ‘Accounting for Investment’ in fellow subsidiaries. These investments are in
fellow subsidiaries hence the qualification has no effect on the restated summary
statement of profit and loss of the group as being inter company transaction eliminated in
the process of consolidation.
c.
The Auditors in their report for the year ended 31st March, 2004 and 2005 expressed
their inability to comment on the recoverability of interest free loans Rs. 1,511.64 lacs
and Rs. 5,275.64 lacs outstanding on 31.03.2004 and 31.03.2005. The loans realized in
subsequent years, hence no adjustment required.
14.3 MAOCARO 1988/ CARO 2003
I.
Holding Company
Fixed Assets
•
•
i.
In the financial year ended 31st March, 2006 and 2007, auditors have reported that there
is a phased program of physical verification of fixed assets except for consumer premises
equipments installed at the customers premises, which is reasonable having regard to the
size of the Company and nature of its assets. Pursuant to the program, the physical
verification of certain assets was carried out during the period. The reconciliation of the
fixed assets physically verified with the books is in progress and differences, if any, will
be accounted on its determination.
ii.
In the financial year ended 31st March, 2008, auditors have reported that the fixed
assets, except consumer premises equipments installed at the customer premises have
been physically verified by the management as per the phased program of
verification and no discrepancies were noticed on such verification.
Interest free loan to Parties covered u/s 301 of the Companies Act, 1956
In the financial year ended 31st March, 2005 and 2006, the auditors have reported, that the
Company has granted interest free unsecured loans to companies covered in the register
maintained under section 301 of the Act. The maximum amount involved during the financial
year ended 31st March, 2006 was Rs. 50.73 Crores (Year ended 31st March, 2005 Rs. 69.12
Crores) and for the financial year ended 31st March, 2006 balance of such loan is nil (year
ended 31st March, 2005 Rs. 50.73 Crores). Further in financial year ended 31st March, 2007
auditor has reported loans given to 301 parties aggregating to Rs. 12.40 Crores are provided at
the interest rate prejudicial to interest to the Company.
129
•
Internal Audit
In the financial year ended 31st March, 2007 auditors have reported that the Company has an
internal audit system commensurate with its size and nature of its business. However, the
same needs to be strengthened as regard scope and periodicity.
•
Statutory Dues
In the financial year ended 31st March, 2004, 2005, 2006 and 2007,auditors have reported that
the Company is regular in depositing undisputed statutory dues including, investor education
and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty,
excise duty, cess, Provident Fund and other statutory dues, wherever applicable, with
appropriate authorities except delay in few cases.
In the financial year ended 31st March 2007 and 2008 the auditors have reported that,
(Rs. In lacs)
Name of Statue Nature of dues
Utter Pradesh
Entertainment &
Betting Tax Act,
1979
Utter Pradesh
Entertainment &
Betting Tax Act,
1979 (As
Applicable to
Uttarakhand)
•
Forum where Amount stand as
Period to which
dispute is
at 31st March,
pertain
pending
2008
Amount stand as
at 31st March,
2007
Entertainment
Tax
2003-2004 to
2006-2007
Allahabad High
Court
920.20
920.20
Entertainment
Tax
2003-2004 to
2006-2007
High Court of
Uttarakhand
88.36
-
Accumulated losses
reported that the accumulated losses (considering audit qualification) are more than fifty
percent of its net worth. Further, the Company has incurred cash losses for all the above
financial year.
•
Default in repayment to financial institution/bank
In the financial year ended 31st March, 2004, 2005 and 2008 auditors have reported, default in
repayment financial institution / bank as under:(Rs. in lacs)
Particulars
For the year ended 31st March, 2004
Financial Institution
Banks
Banks
Axis Banks
Axis Banks
Axis Banks
IDBI Banks
•
Fund utilization
130
Principal
Interest
Period of
default
50.00
-
1.56
45.06
1-3 Month
1-2 Month
1,000.00
126.53
1-30 Days
3,750.00
500.00
3,250.00
-
65.49
31 days
16 days
28 days
23 days
In the financial year ended 31st March, 2004, 2007 and 2008 auditors have reported that short
term fund amounting to Rs. 2,479.50 lacs , Rs. 51,626.07 lacs and Rs. 25,300.93 lacs
respectively have been used for long term investment.
II. Subsidiary Companies
•
•
•
a.
In the financial year ended 31st March, 2004, auditors have reported that fixed assets
physically verified were not reconciled with the books of accounts & hence discrepancies,
if any could not be identified.
b.
In the financial year ended 31st March, 2004 and 2005, auditors have reported that BTSL
did not have internal audit system.
c.
In the financial year ended 31st March 2004, 2005 and 2006, auditors have reported that
BTSL is regular in depositing undisputed statutory dues including Income Tax, Sales Tax
and other statutory dues, wherever applicable, with the appropriate authorities except
delay in few cases.
d.
The financial year ended 31st March 2004, 2005 and 2006, auditors have reported that the
accumulated losses are more than fifty percent of net worth and also have incurred cash
losses during the financial year ended 31st March, 2005.
e.
In the financial year ended 31st March 2005 auditors have reported that assets given on
lease were not physically verified.
a.
physically verified were not reconciled with the books of accounts & hence discrepancies,
if any could not be identified.
b.
In the financial year ended 31st March, 2004 and 2005, auditors have reported that STPL
c.
STPL is regular in depositing undisputed statutory dues including Income Tax, Sales Tax
delay in few cases.
d.
the accumulated losses are more than fifty percent of net worth and has incurred cash
losses during the financial year ended 31st March, 2004 and 2006.
e.
In the financial year ended 31st March, 2005, the auditors have reported that STPL has
used short term funds Rs. 27.58 lacs for long term investment.
a.
In the financial year ended 31st March, 2004 and 2005, auditors have reported that QCPL
b.
QCPL is regular in depositing undisputed statutory dues including Income Tax, Sales Tax
delay in few cases and also there is non payment of WPC charges Rs. 1.67 lacs
outstanding since March, 2001.
131
•
•
c.
accumulated losses are more than fifty percent of net worth and QCPL has incurred cash
losses during the financial year ended 31st March, 2004.
d.
In the financial year ended 31st March, 2005 and 2006 the auditors have reported that
QCPL has used short term funds Rs. 17.29 lacs and Rs. 127.00 lacs respectively for long
term investment
Procall Private Limited (PPL)
a.
In the financial year ended 31st March , 2004, 2005 and 2006 auditors have reported that
equipment on rental and demonstration equipment were not physically verified.
b.
In the financial year ended 31st March, 2004, 2005 and 2006, auditors have reported that
PPL did not have internal audit system.
c.
PPL is regular in depositing undisputed statutory dues including Income Tax, Sales Tax
and other statutory dues, where applicable, with the appropriate authorities except delay
in few cases.
d.
accumulated losses are more than fifty percent of net worth.
e.
In the financial year ended 31st March, 2005 the auditors have reported that PPL has used
short term funds Rs. 54.99 lacs for long term investment.
a.
In the financial year ended 31st March, 2004 auditors have reported that electronic
devices with customers not physically verified.
b.
In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008, auditors have
reported that ACL is regular in depositing undisputed statutory dues including Income
Tax, Sales Tax and other statutory dues, where applicable, with the appropriate authorities
except delay in few cases. Further unpaid and undisputed tax dues outstanding as on 31st
March, 2004, 2005, 2007 and 2008 was Rs.0.35 lacs, 0.44 lacs, 0.55 lacs and Rs. 0.42
lacs respectively.
c.
In the financial year ended 31st March, 2004 auditors have reported that internal audit
system requires to be strengthen in respect to scope and periodicity and for the financial
year ended 31st March 2005, 2006, 2007 and 2008 has reported that ACL did not have
internal audit system.
d.
The financial year ended 31st March 2004, 2005, 2006, 2007 and 2008 auditors have
reported that the accumulated losses are more than fifty percent of net worth. Further
ACL has incurred cash loss during the financial year ended 31st March 2004, 2005, 2006
and 2008.
e.
ACL has used short term funds Rs. 324.94 lacs and Rs. 1301.31 lacs respectively for long
term investment.
.
•
reported that ASSL is regular in depositing undisputed statutory dues including Income Tax,
Sales Tax and other statutory dues, wherever applicable, with the appropriate authorities
except delay in few cases.
132
•
•
a.
In the financial year ended 31st March, 2006 auditors have reported that ATL did not
have internal audit system.
b.
In the financial year ended 31st March 2006 auditors have reported that ATL is regular in
depositing undisputed statutory dues including Income Tax, Sales Tax and other statutory
dues, where applicable, with the appropriate authorities except delay in few cases.
c.
The financial year ended 31st March 2006 auditors have reported that the accumulated
losses are more than fifty percent of net worth and ATL has incurred cash losses during
the financial year ended 31st March, 2006.
d.
ATL has used short term funds Rs. 0.11 lacs and Rs. 2.83 crores respectively for long
term investment.
In the financial year ended 31st March, 2006, auditors have reported that AWSL did not have
internal audit system.
•
Integrated Subscriber Management Services Limited (ISMSL)
In the financial year ended 31st March 2007 and 2008 auditors have reported that ISMSL is
regular in depositing undisputed statutory dues including Income Tax, Sales Tax and other
statutory dues, where applicable, with the appropriate authorities except delay in one case and
three cases respectively.
14.4 Other non compliance:I.
II.
Holding Company
a.
For the financial year ended 31st March, 2004, the Company did not form an audit committee
of its board of directors as required under section 292A of the Companies Act, 1956.
b.
For the financial year ended 31st March, 2004 and 2005, the Company did not have a whole
time company secretary as required under section 383A of the Companies Act, 1956.
•
a.
For the financial year ended 31st March, 2004, 2005 and 2006, BTSL did not have a
whole time company secretary as required under section 383A of the Companies Act,
1956.
b.
For the financial year ended 31st March, 2004, 2005 and 2006, BTSL has reported that
as per the license agreement with Department of Telecommunication, BTSL is required
to maintained, a separate bank account in the service area to which the total revenue
accruing from the operation shall be credited. The authority shall have a lien on 15% of
the funds credited to such account, limited to the amount due to Authority. During the
year 1999-2000, the Company received a letter from DOT directing it to comply with the
above condition. However, the company did not comply with the same. The company
does not expect licenses to be terminated on account of non compliance of the above
condition as the bank guarantee given by the DOT sufficiently covers the Company’s
liability.
c.
During the financial year ended 31st March 2004, 2005 and 2006, debtors includes
amount due from private limited company is which directors are interest as directors.
133
d.
During the financial year ended 31st March 2006, advance includes amount due from
private limited company is which directors are interest as directors.
•
a.
For the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008, ASSL did not
form an audit committee of its board of directors as required under section 292A of the
Companies Act, 1956.
b.
For the financial year ended 31st March, 2005, 2006, 2007 and 2008, ASSL did not have
a whole time company secretary as required under section 383A of the Companies Act,
1956.
c.
appoint a managing director as required under section 269 of the Companies Act, 1956.
.
•
•
i.
For the financial year ended 31st March, 2004 and 2005, STPL did not form an audit
committee of its board of directors as required under section 292A of the Companies Act,
1956.
ii.
For the financial year ended 31st March, 2004 and 2005, STPL did not appoint a
managing director as required under section 269 of the Companies Act, 1956.
iii.
For the financial year ended 31st March, 2004, 2005 and 2006, STPL did not have a
1956
iv.
In the financial year ended 31 March, 2004, 2005 and 2006 it has been reported that the
Company has been issued licenses from the Dot for establishing, maintaining and
operating radio trunked services in certain areas. As per the license agreement, the
Company is required to maintain a separate bank account in the service area to which the
total revenue accruing from the operation shall be credited. The authority shall have a lien
on 15 % of the funds credited to such account, limited to the amount due to Authority.
During the year 1999-2000, the Company received a letter from DoT directing it to
comply with the above condition. However, the Company did not comply with the same.
The company does not expect licenses to be terminated on account of non-compliance of
with the above condition as the bank guarantee given to DoT sufficiently covers the
Company’s liability.
a.
For the financial year ended 31st March, 2004 and 2005, QCPL did not form an audit
1956.
b.
For the financial year ended 31st March, 2004 and 2005, QCPL did not appoint a
c.
In the financial year ended 31st March, 2004, 2005 and 2006 it has been reported that the
total revenue accruing from the operation shall be credited. The authority shall have a lien
on 15 % of the funds credited to such account, limited to the amount due to Authority.
During the year 1999-2000, the Company received a letter from DoT directing it to
comply with the above condition. However, the Company did not comply with the same.
The company does not expect licenses to be terminated on account of non-compliance of
134
with the above condition as the bank guarantee given to DoT sufficiently covers the
Company’s liability.
•
D).
•
For the financial year ended 31st March, 2005, 2006, 2007 and 2008, ACL did not have a
whole time company secretary as required under section 383A of the Companies, Act,
1956.
•
For the financial year ended 31st March, 2006, 2007 and 2008, ACL did not appoint a
whole time director/ managing director as required under section 269 of the Companies
Act, 1956.
NOTES ON ADJUSTMENTS FOR RESTATED FINANCIAL STATEMENTS
1.
The Group adopted the revised ‘Accounting Standard 15(Revised) on employees benefits effective
from 1 April 2006. Pursuant to the adoption, the incremental liability at the beginning of the year in
respect to Gratuity and Leave Encashment has been adjusted against general reserve as provided in
the Standard and accordingly no adjustment is made in previous years.
2.
Below mentioned is the summary of results of restatement made in the audited consolidated financial
statement for the three months ended 30 June, 2008 and year ended 31 March 2008 and 2007 and
also adjustment made in the consolidated financial information for right issued (CIFR) prepared and
certified by the management of the Company and its impact on the profit or loss of the Company.
(Rs. In lacs)
Particulars
Miscellaneous
Expenses written off
Retirement Benefit
Prior Period Items
Provision for doubtful
advances (Exceptional
items)
Sales/VAT Demand
Pre-operative Expenses
Unspent Liability
Written Off
Licesnes fees
Total
3.
Reference
to Note
No.
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
For the
year ended
March 31,
2004
3(a)
-
-
-
-
123.46
63.62
3(b)
4(a)
-
276.86
(224.48)
1.95
(52.18)
(0.99)
(3.78)
(1.48)
8.60
4(b)
-
-
-
12,084.30
-
(12,084.30)
4(c)
4(d)
-
220.90
-
(220.90)
-
(3.81)
406.02
(397.48)
4(e)
-
-
(46.27)
(38.49)
2.62
57.55
4(f)
756.73
756.73
(127.20)
370.56
(374.60)
(866.25)
(65.48)
11,926.30
(134.80)
392.53
(54.64)
(12,408.13)
CHANGES/CORRECTION IN ACCOUNTING POLICIES
a) MISCELLANEOUS EXPENITURES (TO THE EXTENT NOT WRITTEN OFF OR
ADJUSTED)
i)
DEFFERED REVENUE EXPENSES
conceptualization, feasibility and other pre-set costs were deferred and amortized over five year.
In the restated Summary Statements these expenses are appropriately adjusted in respective
years in which the same were originally incurred. The adjustments pertaining to financial year
ended on or before 31 March 2003 are adjusted in the opening balance in profit and loss account
as at 1 April 2003.
135
ii)
In the case of subsidiaries, preliminary expenses were fully written off as against the policy to
amortize over five or ten years, as the case may be. In the Restated Summary Statements of
Profit and Loss Account, the expenses are amortized as per the policy. The adjustments
pertaining to financial year ended on or before 31 March 2003 are adjusted in the opening
balance in profit and loss account as at 1 April 2003.
b) RETIREMENT BENEFITS
During the financial year ended 31 March, 2004, 2005 and 2006 company’s contribution to
employee’s gratuity fund scheme of Life Insurance Corporation of India was charged to profit and
loss account. For Restated Summary Statements, to realign with the relevant accounting standard
prevailing on that date, the gratuity liability as at balance sheet date has been considered on actuarial
valuation made by independent actuary.
4.
OTHER ADJUSTMENTS
a) PRIOR PERIOD ADJUSTMENTS
During the three months period ended 30 June, 2008 and financial year ended 31 March 2008, 2007,
2006, 2005, 2004 certain items of income/expenses have been identified as prior period items. For
the purpose of this statement, such prior period items have been appropriately adjusted in the
respective years. The adjustments pertaining to financial years ended on or before 31 March 2003 are
adjusted in the opening balance in profit and loss account as at 1 April 2003.
b) PROVISION FOR DOUBTFUL ADVANCES
During the financial year ended 31 March 2006, the Company has made provision for doubtful
advances. The auditors had qualified their report for the financial year ended 31 March 2004 and
2005 hence the amount has been appropriately adjusted in the financial year ended 31 March 2004.
c)
SALES TAX/VAT DEMAND
During the three months period ended 30 June 2008 and financial year ended 31 March 2008, the
Company provided for Sales Tax/Vat demand raised. For the purpose of this statement, such
demands have been appropriately adjusted in the respective years.
d) PRE-OPERATIVE EXPENSES
During the financial year ended 31 March 2004, and earlier years the parent company incurred
certain expenditure on promoting and implementing DTH project and C band Teleport project and
also incurred expenses on trial run. These expenses were treated as pre-operative expenses to be
allocated to fixed assets or treated otherwise on commencement of commercial operation. However
in the financial year ended 31 March, 2005, these expenses were charged off to profit and loss. In the
restated summary statements these expenses are appropriately adjusted in respective years in which
the same were originally incurred.
Similarly, a subsidiary incurred expenses on project under taken by it during the financial year ended
31 March 2005 and earlier years. The auditors have qualified for their report for preparing the
financial statement on going concern basis though there was temporary suspension and no major
development on the project. The Auditors also reported non compliance of AS-28 “Impairment of
Assets”. In the Restated Summary Statements these expenses are appropriately adjusted in respective
years in which the same were originally incurred.
The adjustments pertaining to financial years ended on or before 31 March 2003 are adjusted in the
opening balance in profit and loss account as at 1 April 2003.
e)
UNSPENT LIABILITIES WRITTEN BACK
136
In the financial statement for the year ended 31 March, 2004, 2005, 2006, 2007 and 2008 certain
liabilities created in earlier years were written back. For the purpose of Restated Summary
Statement, the said liabilities, wherever required, have been appropriately adjusted in the respective
years in which the same were originally created. The adjustments pertaining to financial years ended
on or before 31 March 2003 are adjusted in the opening balance in profit and loss account as at 1
April 2003.
f)
As per advice received and in terms of DTH license agreement, the license fee was being
provided on revenue from DTH subscribers. However based on recent judgment of Telecom Dispute
Settlement & Appellate Tribunal in the case of one of the DTH service provider , the Company , as
an abundant precaution, has also provided license fee on other revenue accruing from DTH license
related activities. The Additional license fee of Rs. 756.73 lacs is provided for past years. According
in the restated summary statements these expenses are appropriately adjusted in respective year to
which revenue pertains.
g) PROFIT AND LOSS ACCOUNT AS AT 01 APRIL, 2003
(Rs. In lacs)
Reference to Note No.
Balance as at March 31,
2003
(13,783.28)
3(a)
(187.08)
Retirement Benefit
3(b)
(1.45)
Prior Period Items
4(a)
(5.02)
4(d)
(136.90)
Unspent Liability Written Off
4(e)
Particulars
Profit/(Loss) as per consolidated financial
information for Right Issue
Adjustment :
Miscellaneous Expenses
(to the extent not written off or adjusted)
Total Adjustment
(14,089.15)
Profit/(Loss) as Restated
5
24.58
(305.87)
MATARIAL REGROUPING
i.
Upto the financial year ended 31 March 2004, interest received was shown under the head
Income but from the financial year ended 31 March 2005, the same is being shown under the
head financial charges as separate item and net balance (financial charges minus interest
received) is taken in main profit and loss account. However in the Restated Summary Statement
of Profit and Loss the interest income is shown under the head ‘Other Income’.
ii.
During the financial year ended 31 March 2005 and 2006, license fee amortized was grouped
under the head ‘Operating Expenses’ but from the financial year ended 31 March 2007, the
amortized amount is regrouped under the head “Depreciation/Amortization’. In the Restated
Summary Statement of Profit and Loss for the financial year ended 31 March 2005 and 2006 the
amortized amount is regrouped and shown accordingly.
iii. In the financial statements for the year ended 31 March 2006, Rs. 200 lacs were shown as
investment under the head ‘Investments’. However in the financial statements for the year ended
31 March 2007, the same has been regrouped under Other Advances. In the Restated Summary
Statement of Assets and Liabilities for the financial year ended 31 March 2006 the same is
regrouped and disclosed accordingly.
iv. During the financial year ended 31 March 2004, teleport income was grouped under Other
Income. Based on regrouping of the income under Sales and Services during the financial year
ended 31 March 2005 and onward, in the Restated Summary Statement of Profit and Loss the
same is regrouped and disclosed accordingly.
137
v.
During the financial year ended 31 March 2007, Other DTH Revenue was wrongly grouped
under ‘Other Income’. Accordingly in the Restated Summary Statement of Profit and Loss the
same is regrouped as Other DTH Revenue.
vi. During the financial year ended 31 March 2006, credit balance of a loan written off was grouped
Exceptional Item which in the Restated Summary Statement of Profit and Loss has been
regrouped under the head “Other Income’.
vii. During the financial year ended 31 March 2006, penalty levied by the licensing authority was
shown as exceptional item which in the Restated Summary Statement of Profit and Loss has
been regrouped under operating expenses as a normal expense.
viii. During the financial year ended 31 March 2005, investment Rs 0.26 lacs shown as Balance with
bank have been regrouped as Investment. Accordingly, in the Restated Summary Statement of
Assets and Liabilities for the year ended 31 March 2004 the same is regrouped and disclosed
accordingly.
ix. In the financial statement for the year ended 31 March 2006, tax provision Rs 1.33 lacs were
grouped under Administrative Expenses. Accordingly, in the Restated Summary Statement of
Profit and Loss for the year ended 31 March 2006 Same has been regrouped and shown
accordingly.
x.
In the financial statement for the year ended 31 March 2007, advance tax payment was netted
against provision for taxation resulting in negative balance in provision for taxation. In the
Restated Summary Statement of Assets and Liabilities, the advance tax payment is regrouped
under Loans and Advances.
xi. In the financial statement for the year ended 31 March 2006, Hire/Lease Charges Expenses
shown earlier under the head Administration and Other Expenses have been regrouped under
Network Operation Cost. Accordingly, in Restated Summary Statement of Profit and Loss
regrouping is made in past year also.
xii. During the financial year ended March 31, 2008 income from Bandwidth charges was grouped
under ‘Other Income’. However in the financial statement for the three month period ended 30
June 2008, the same is regrouped under ‘Sales and Services’ as separate item. Hence in the
Restated Summary Statement of Profit and Loss the same is regrouped and disclosed
accordingly.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
138
Annexure-E
Consolidated Capitalisation Statement of the Group as at June 30, 2008
(Rs. in lacs)
Pre issue as at
Particulars
June 30, 2008
As adjusted for issue
(Immediately after the
issue)*
Short Term Debts
Long Term Debts
47,593.91
5,538.32
17,593.91 @
5,538.32
Total Debts
Shareholder's Fund
Share Capital
Reserves & Surplus
(Net of Profit & Loss Account Debit Balance)
(Excluding Revaluation Reserve)
Miscellaneous Expenditure
53,132.23
23,132.23
4,282.23
(65,389.80)
9,463.73 *
43,421.61 *
-
-
(61,107.57)
Refer Note-3
below
Total Shareholder's Funds/Net Worth
Long Term Debt/Equity Ratio
52,885.34*
10.47%
Note:
1. Short term debts is considered as debts having original repayment term not exceeding 12 months.
2. Long term debts is considered as debts other than short-term debt as defined above.
3. Since networth is negative,hence ratio not calculated.
4. The figures disclosed above are based on the restated summary financial statements of the Group as at June
30, 2008.
5.
The Capitalization Statement has been prepared based on the Management’s assumption that the proposed
Rights issue of equity shares to the shareholders of the Company consisting of 518,149,592 Equity shares
of Re. 1 each to be issued at the rate of Rs. 22/- per share will be subscribed fully.
6.
@ After adjusting repayment of loan Rs. 30,000 lacs out of application money proceeds from proposed
Rights issue.
7.
* Considering full issue price of Rs.22/- per equity share. However the amount is payable in installment as
under:Per equity share
(Rs.)
Due on
Against Share Capital
(Rs. In lacs)
Against Securities
Premium (Rs. In lacs)
Alongwith Application
First Call (any time after three months but within nine months from the
date of allotment)
6
8
2,590.75
1,295.38
28,498.23
40,156.59
Second and Final Call (any time after nine months but within eighteen
months from the date of allotment)
8
1,295.37
40,156.59
Total
22
5,181.50
108,811.41
139
8.
The above statement should be read with the Significant Accounting Policies and Selected Notes to
Accounts for Restated Summary Statements, as appearing in Annexure ‘D' to this Report.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
140
(Formerly ASC Enterprises Limited)
Annexure- F
Consolidated Details of Secured & Unsecured Loans of the Group
(Rs in Lacs)
S.No.
A.
1
2
3
4
5
6
Particulars
Secured Loans
Hire Purchase
Finance/Vehicle Loan- From
Various Banks
Secured against hypothecation
of vehicles, charge not
registered under Section 125 of
the Companies Act, 1956. Rate
of interest varies from 4.91% to
11.83%. Loan repayable over
next 04 years is Rs 22.73 Lacs,
Rs 10.53 Lacs, Rs 6.37 Lacs ,
Rs 1.60 Lacs & Rs 1.79 Lacs.
Term Loan from Axis Bank
Secured by first pari-pasu
charge on all present and future
movable fixed assets relating to
DTH project and pledge of
shares owned by promoter/
group companies. Interest
payable @ 11.50% p.a.
Term Loan from ING
Vyasya Bank
Secured by second charge on
entire moveable fixed assets of
the company and pledge of
shares
owned
by
and
guaranteed by related parties.
Interest payable @ 6.50% p.a.
Term Loan from Axis Bank
Secured by first pari passu
hypothecation charge on all
present and future current
assets including goods, stocks
and all other such articles and
book
debts,
receivables,
investments, cash flow and
corporate guarantee of related
party.Interest payable BPLR 3%. Applicable rate is 12.00%
p.a.
Bridge Loan from IDBI
Bank
Secured by hypothecation of all
movable properties including
movable Plant and machinery,
machinery spares, tools and
accessories, book debts etc.,
present and future, and
corporate guarantee of related
party and pledge of certain
shares held by the promoters in
the Company. Interest payable
@ 12.75% p.a.
Cash Credit from Axis Bank
Balance as
at Jun 30,
2008
Balance as
at Mar 31,
2008
Balance as
at Mar 31,
2007
Balance as
at Mar 31,
2006
Balance as
at Mar 31,
2005
Balance as
at Mar 31,
2004
43.02
33.50
74.54
30.15
11.78
19.51
-
-
-
-
200.00
200.00
-
-
-
-
1,000.00
-
-
-
7,500.00
-
-
-
-
6,047.81
6,047.81
-
-
-
758.99
758.72
757.26
750.70
180.78
-
141
S.No.
7
8
B.
1
2
3
4
a)
b)
Particulars
hypothecation
charge
on
moveable fixed assets of the
company and pledge of shares
by related parties. Short term,
normally repayable in one year
& present rate of interest is
13.25% p.a.
Cash Credit From Bank
Secured by way of first charge
on all movable & immoveable
assets
of
the
company
including stock, book debts,
furniture & fixture etc., both
present & future & guaranteed
by holding company & one of
the directors of the company.
Short term, normally repayable
in one year & rate of interest as
negotiated from time to time.
Interest Accrued and Due
Total Secured Loans
Unsecured Loans
From Banks- Standard
Chartered Bank
Backed by corporate gurantee
provided by a related party.
Short term, repayable in one
year & Rate of Interest payable
@ 11% p.a.
From Banks- ICICI Bank
Foreign Currency arrangement
of buyer credit from bank for
capital expenditure is against
guarantee of a related party.
Long Term. See note 1 below
for terms and condition
Chartered Bank
Ranking pari passu in all
respect with all other, present
and future, senior, unsecured
and unsubordinated obligation
of the Company. A reserve
account is maintained to
provide cover for three months
interest on outstanding loan.
Related party of the Company
is required to provide negative
pledge of shares of the
Company held by them. Short
Term, repayable in 9 months
and interest @ 11.50%
From OthersZee Entertainment
Enterprises Limited
Short term, repayable on
demand and interest payable @
12% p.a.
Rupee Finance &
Management Pvt. Limited
Balance as
at Jun 30,
2008
Balance as
at Mar 31,
2008
Balance as
at Mar 31,
2007
Balance as
at Mar 31,
2006
Balance as
at Mar 31,
2005
Balance as
at Mar 31,
2004
-
-
-
-
96.07
-
802.01
6,840.03
70.06
14,449.67
780.85
5.35
1,493.98
219.51
2,500.00
-
-
-
-
5,495.30
3,517.14
-
-
-
-
8,000.00
8,000.00
-
-
-
-
3,971.56
2,770.00
-
-
-
-
616.31
-
500.00
-
-
-
142
S.No.
c)
d)
e)
f)
g)
h)
i)
j)
k)
5
Particulars
Balance as
at Jun 30,
2008
Balance as
at Mar 31,
2008
Balance as
at Mar 31,
2007
Balance as
at Mar 31,
2006
Balance as
at Mar 31,
2005
Balance as
at Mar 31,
2004
27.00
27.00
27.00
27.00
27.00
27.00
-
-
19.00
19.00
-
-
-
-
-
-
50.00
50.00
-
-
-
-
10.00
-
-
-
-
-
-
1,700.00
1,787.83
1,787.83
1,787.83
1,787.83
-
-
-
-
-
-
4.63
4.63
-
-
-
-
60.00
60.00
12.50% p.a.
Suncity Projects Limited
Short term repayable on
demand and interest free
Kenlott Gamming Solutions
Pvt Limited
India Securities Limited
Pan India Network Infravest
Pvt Limited
Rajaram Finance &
Investment Co (India) Ltd
Ganjam Trading Co Pvt
Limited
Integrated Subscriber
Playwin Infravest Private
Limited
Churu Trading Company
Private Limited
12% p.a.
Total Unsecured Loans
32,421.44
30,000.00
-
-
-
-
10.78
52,330.22
1,509.69
47,611.66
17.15
4,850.98
10.78
1,844.61
10.78
162.41
10.78
1,852.41
Total Loans (A+B)
53,132.23
54,451.69
19,300.65
2,625.46
1,656.39
2,071.92
Note:
1)
Terms and conditions relating to unsecured loan from ICICI Bank Rs 5495.30 lacs
Loan Amt (US$ in Lacs)
23.45
23.45
20.60
20.10
10.07
6.03
10.05
6.70
6.70
127.15
Interest Rate (%)
Libor+1.15
Libor +1.15
Libor +1.15
Libor +1.15
Libor +1.15
Libor +1.25
Libor +1.15
Libor +1.15
Libor +1.15
Effective Rate (%)
3.5163
3.5163
3.5163
3.5163
4.0363
4.1363
4.3038
4.3038
4.3038
143
Repayable
19-Jan-11
25-Jan-11
30-Jan-11
28-Dec-10
18-Feb-11
25-Apr-11
01-Mar-11
15-Feb-11
07-Feb-11
2)
Repayment Schedule given above is applicable only for Loans outstanding as on June 30, 2008.
3) The above statement should be read with the Significant Accounting Policies and Selected Notes on
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
144
Annexure-G
Consolidated Details of the Investments of the Group
(Rs. in lacs)
Particulars
June 30,
2008
March 31,
2008
As at
March 31,
March 31,
2007
2006
March 31,
2005
March 31,
2004
Long Term (At Cost) Unquoted
In Others - Non Trade
IDBI Regular Income Bonds
National Saving Certificate
0.26
0.26
0.26
0.26
0.26
7.50
0.26
Total
Investments in Related Parties
Aggregate Cost-Unquoted
-Quoted
0.26
0.26
-
0.26
0.26
-
0.26
0.26
-
0.26
0.26
-
0.26
0.26
-
7.76
7.76
-
Note:
1) The Company has not made investment is related party.
2) The above statement should be read with the Significant Accounting Policies and Selected Notes on
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
145
Consoliated Restated summary statement of Sundry Debtors of the Group
Annexure-H
(Rs. in lacs)
Particulars
As at
March 31,
March 31,
2007
2006
June 30,
2008
March 31,
2008
March 31,
2005
March 31,
2004
3,308.54
3,417.20
563.97
325.85
367.40
245.39
1,000.04
964.10
4,174.46
818.97
253.78
515.58
4,308.58
4,381.30
4,738.43
1,144.82
621.18
760.97
349.49
349.49
554.50
133.34
173.24
178.52
3,959.09
4,031.81
4,183.93
1,011.48
447.94
582.45
3,848.38
3,865.42
3,757.00
702.50
199.48
14.83
Debts outstanding over six months
Other debts
Provision for Doubtful Debts
Total Sundry Debtors
Amount due from Related Parties
Amount due from related parties
includes:
Due from Promoter
Due from Promoter Companies
Due from Promoter Group
Total
2,859.89
2,859.89
2,678.43
2,678.43
2,759.57
2,759.57
16.41
16.41
0.89
0.89
0.78
0.78
Note:
1.
2.
Detail of related party transactions and balances have been disclosed in ‘Annexure – M’
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
146
Consolidated Restated Summary of Loans and Advances of the Group
Annexure-I
(Rs. in lacs)
Particulars
As at
March 31,
March 31,
2007
2006
June 30,
2008
March 31,
2008
March 31,
2005
March 31,
2004
11,504.18
9,015.07
8,497.67
7,803.82
11,391.96
8,466.46
23,241.47
21,386.11
19,146.39
15,405.32
12,488.28
12,624.92
-
-
-
300.00
-
-
656.20
620.10
167.53
61.34
265.59
314.75
35,401.85
31,021.28
27,811.59
23,570.48
24,145.83
21,406.13
12,260.43
12,260.43
12,260.43
12,084.30
12,096.63
12,158.21
23,141.42
18,760.85
15,551.16
11,486.18
12,049.20
9,247.92
27,582.88
25,405.05
23,991.35
22,029.49
23,457.77
19,174.09
-
2,517.36
2,517.36
1,367.48
1,367.48
28.46
28.46
6,113.17
212.96
6,326.13
207.28
207.28
Loans
Advances (recoverable in cash or in kind
or for value to be received and/or to be
adjusted)
Security and other Deposits
Total
TOTAL
includes:
Due from Promoter
Total
2,,517.06
2,517.06
Note:
1
2
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
147
Annexure-J
Consolidated Restated Summary Statement of Sales & Services of the Group
(Rs. In lacs)
SN.
Particulars
1
Subscription Income
2
Lease Rentals
3
4
Other DTH Revenue
Placement and Active
Services
5
Teleport Services
6
7
Royalty
Revenue from Network
operations
(Public Mobile Radio
Turnking Services)
8
Call Centre Charges
9
Service Income
10
11
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
13,321.24
32,884.20
12,190.09
1,939.01
6,036.15
2,180.71
-
-
-
-
318.83
1,121.75
1,048.88
-
-
-
25.00
-
-
-
993.45
40.17
57.21
9.03
-
-
Bandhwith Charges
Sales(net of Returns)
260.69
53.97
11A
Traded Normally
620.07
1,068.31
11B
Not Normally Traded
Total
From Related Parties
With related parties
includes:
From Promoter
From Promoter
Companies
From Promoter Group
Total
-
51.06
3,592.15
13.81
-
69.16
-
73.96
16,468.87
333.50
41,278.51
1,261.10
19,203.07
4,726.63
-
-
161.39
161.39
562.34
562.34
For the year
ended
March 31,
2006
For the
year ended
March 31,
2005
1,953.05
-
462.89
77.39
For the
year ended
March 31,
2004
Nature
186.15
Recurring
122.08
155.50
300.00
-
Recurring
NonRecurring
NonRecurring
492.68
71.52
16.50
110.00
-
Recurring
NonRecurring
1,000.74
979.22
Recurring
-
Recurring
148.69
Recurring
-
Recurring
8,026.28
Recurring
NonRecurring
77.96
275.28
-
1,191.36
-
2,678.82
5,273.78
-
-
747.29
1,200.13
4,558.44
633.52
10,259.63
98.40
-
-
-
-
2846.78
2846.78
156.03
156.03
72.15
72.15
26.27
26.27
Note:
1
2
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
148
Place: Noida
149
Annexure-K
Consolidated Restated Summary Statement of Other Income of the Group
(Rs. In lacs)
SN.
Particulars
1
Interest Received (Gross)
2
Exchange Gain Realised
3
Balances written back
4
5
Profit on sale of assets
Profit on Redemption of
units of Mutual Funds
6
Miscellaneous Income
Total
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year
ended
March 31,
2007
192.54
654.04
582.82
31.28
275.55
29.55
-
277.90
251.63
-
66.13
425.91
15.07
1.33
37.47
56.59
0.51
7.25
-
-
-
42.04
24.02
-
-
24.87
-
-
-
-
2.45
35.00
15.76
19.27
46.19
16.14
210.06
178.65
993.14
592.89
887.68
528.18
149.18
3.81
412.40
259.66
478.85
-
-
-
-
-
-
-
-
-
-
-
248.55
-
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
For the
year ended
March 31,
2004
includes:
From Promoter
From Promoter
Companies
From Promoter Group
-
4.27
-
-
11.11
-
Total
-
4.27
-
-
259.66
-
Note:
1
2
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
150
Nature
Recurring
NonRecurring
NonRecurring
NonRecurring
NonRecurring
NonRecurring
Annexure-L
Consolidated Statement of Accounting Ratios of the Group
(Rs. in lacs)
For the three
months
ended June
30, 2008
For the Year
ended
March 31,
2008
For the Year
ended
March 31,
2007
For the Year
ended
March 31,
2006
For the Year
ended
March 31,
2005
For the
Year ended
March 31,
2004
S.No.
Particulars
1
Net Profit/(Loss) before
exceptional items but after
Tax
(13,245.86)
(41,042.20)
(24,873.33)
(9,561.53)
(3,564.20)
(1,162.99)
2
Net Profit/(Loss) after
exceptional items and Tax
(13,245.86)
(41,042.20)
(24,873.33)
(9,561.53)
(3,564.20)
(13,247.29)
3
outstanding at the end of
the year/period
428,222,803
428,222,803
428,222,803
71,568,765
71,568,765
71,568,765
1
1
1
10
10
10
428,222,803
428,222,803
428,222,803
715,687,650
715,687,650
715,687,650
428,222,803
428,222,803
428,222,803
715,687,650
715,687,650
715,687,650
4,282.23
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
(65,389.80)
(52,143.94)
(11,101.74)
1,312.99
5,968.68
9,591.73
-
-
-
-
0.24
0.81
(61,107.57)
(47,861.71)
(6,819.51)
8,469.87
13,125.32
16,747.80
Basic & Diluted before
exceptional items (1) / (6)
(3.09)
(9.58)
(5.81)
(1.34)
(0.50)
(0.16)
Basic & Diluted after
(3.09)
(9.58)
(5.81)
(1.34)
(0.50)
(1.85)
4
Paid up Value of each
equity share (Rs.)
(Refer Note 3 below)
5
outstanding at the end of
the year/period
(after split of share from
Rs 10 to Re.1 per share)
6
7
8
9
Weighted average number
of Equity Shares of Re. 1
each outstanding during
the year/period after
considering split of share
(Refer Note 5
below)
(for Basic as well as
Diluted earning per share)
(also Refer Note- 3 below)
Total Paid-up Capital
Reserves & surplus (Net of
debit balance in Profit &
Loss Account)(excluding
(to the extent not written
off or adjusted)
10
Net worth (7+8-9)
a)
Accounting Ratios
Earning per share (In
Rs.)
151
S.No.
For the three
months
ended June
30, 2008
For the Year
ended
March 31,
2008
For the Year
ended
March 31,
2007
Before Exceptional Item
(1) / (10)
Refer Note 2 below
Refer Note 2 below
After Exceptional Item (2)
/ (10)
Refer Note –
2 below
Refer Note
– 2 below
Particulars
For the Year
ended
March 31,
2006
For the Year
ended
March 31,
2005
For the
Year ended
March 31,
2004
Refer Note 2 below
(112.89)
(27.16)
(6.94)
Refer Note
– 2 below
(112.89)
(27.16)
(79.10)
1.18
1.83
2.34
exceptional items (2) / (6)
b)
c)
Return on Net Worth -%
Net Asset Value Per Share
(10) / (5)
[Calculated on split value
Re. 1 per share (Refer Note
5)]
(14.27)
(11.18)
152
(1.59)
Note:
1) The ratios have been computed as under:
Basic & Diluted earnings per share (Rs.)
Net profit/(loss) after tax, as restated, attributable to equity
Shareholders
___________________________________________________
Weighted average number of equity shares outstanding during the
year/period
Return on Net Worth (%)
Net Profit /(Loss) after tax, as restated
__________________________________________
Net Worth, as restated, at the end of the year/period
Net asset value per share (Rs.)
_____________________________________________________
Number of equity shares outstanding at the end of the year/period
2) Return on Net Worth for the year ended March 31, 2007, 2008 and three months period ended June 30,
2008 are not given as net worth as on the date as well as profits for the year/period are negative.
3) Equity Share Capital as at March 31, 2007 was after giving effect to the Scheme but pending reorganization
and actual allotments of share capital (Refer Note 6 to Annexure D)
4) Potential conversion of the stock options granted during the financial year ended March 31, 2008 and period
ended June 30, 2008 is anti-dilutive and accordingly has not been considered in the calculation of diluted
earning per share.
5) As per requirement of AS-20, issued by the ICAI, the corresponding figures relating to all previous
reporting periods have been restated to give the effect of split of equity share from Rs. 10 each to Re. 1 each
(pursuant to the Scheme of Arrangement)
6) During the financial year ended 31 March 2007, pursuant to the Scheme of Arrangement, the Company
beside split of equity share from Rs 10 to Re 1 each, also re-organized its share capital and allotted shares.
For the purpose of calculation of earning per share for financial year ended 31 March 2006 and earlier
years, the effect of such reorganization has not been considered.
7) Earning per share is calculated as per compliance of Accounting Standard 20- ‘Earning Per Share.’
8) The above statement should be read with the Significant Accounting Policies and selected notes to accounts
for restated Summary Statements, as appearing in Annexure D to this report.
For Dish TV India Limited
(Jawahar Lal Goel)
Managing Director
(B D Narang)
Director
Place: Noida
Date : November 12, 2008
153
(Formerly known as ASC Enterprises Limited
Restated Summary Statement of Related Party Transactions
Annexure-M
Name of Subsidiary
List of parties where control exists.
30 June '08 31 Mar '08 31 Mar '07 31 Mar '06
31 Mar '05
51.00
51.00
51.00
51.00
100.00
(Holding reduced to 51% on March 31, 2006)
100.00
100.00
100.00
100.00
100.00
98.80
Agrani Wireless Services Limited*@
Agrani Satellite Communication Enterprises (Gibraltor)
100.00
Limited *
Integrated Subscribers Management Services Ltd
100.00
100.00
100.00
(Formerly known as Agrani Telecom Limited)#
50.96
50.96
50.96
Bhilwara Telenet Services Private Limited*
99.37
Agrani Telecom Limited. (Formerly known as Essel
98.01
Telecom Holding Limited)*
# Ceased to be subsidiary on 28 August '2003 and again became subsidiary on 1 April '2006 on transfer of investment to the
parent company under the Scheme of Arrangement.
154
th
Period ended 30
June, 2008
Communication
Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Ayepee Lamitubes
Limited,
Agrani Satellite
Communication
(Gibraltar.) Limited,
Agrani Telecom
Limited, Brio
Academic,
Churu Trading
Company Private
Limited,
Diligent Media
Dakshin Media
Gamming Solutions
Corporate Resources
Private Limited,
Essel Agro Private
Limited,
ETC Networks Limited,
Essel Shyam
Technology Limited,
Limited,
Ganjam Trading Co.
Private Limited,
ITZ Cash Card Limited,
Company Limited,
Limited,
Pan India Network
Infravest Private
Limited, PAN India
Network Investment
Privated, Quick Call
Private Limited, Procall
Private Limited, Rama
Associates Limited,
Rupee Finance and
Management Private
Limited,
Smart Talk Private
Limited, Suncity
Projects Private
Limited,
Wire and Wireless India
Limited,
Year ended
31st March, 2008
Essel Corporate Services
Private Limited,
Essel Agro Private Limited,
Limited (Now merged with
PAN India Network
Infravest Limited)
Zee Entertainment
Pan India Network Infravest
Private Limited,
Pan India Paryatan Limited
Ayepee Lamitubes Limited,
Procall Private Limited,
Suncity Projects Limited,
Communication (Gibraltar)
Limited,
Limited,
ASC Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited,
Zee News Limited,
Ganjam Trading Co. Private
Limited,
Rupee Finance &
Management Private
Limited,
Limited,
Dakshin Media Gamming
Solutions Private Limited,
Rama Associates Limited,
Zee Turner Limited,
Zee Interactive Learning
Systems Limited (Now
known as ETC Networks
Limited)
Kenlott Gamming Solutions
Private Limited
Brio Academic
Zee Foundation
Zee Akash News Private
Limited
E City Entertainment (I)
Private Limited
Zee Sports Limited
Bhilwara Telenet Services
Private Limited
Diligent Media Corporation
Limited
Indian Cable Net Company
Limited,
PAN India Network
Infravest Limited,
Year ended
31st March, 2007
Smart Talk Private
Limited
Essel Corporate
Services Private
Limited
Essel Agro Private Ltd
Limited
Zee Entertainment
Enterprises Limited
Pan India Network
Infravest Private
Limited
Pan India Paryatan
Limited
Ayepee Lamitubes
Limited
Suncity Projects
Limited
Communication
(Gibraltar) Limited
Limited
ASC
Telecommunication
Limited
Asia Today Limited
Asia TV Limited
Zee News Limited
Ganjam Trading Co.
Private Ltd
Rupee Finance &
Management Private
Limited
Limited
Dakshin Media
Gamming Solutions
Private Limited
Rama Associates
Limited
Zee Turner Limited
Zee Interactive
Learning Systems
Limited
Kenlott Gamming
Solutions Private
Limited
Brio Academic
Zee Foundation
Zee Akash News
Private Limited
Private Limited
Zee Sports Limited
Bhilwara Telenet
Services Private
Limited
155
Year ended
31st March, 2006
Smart Talk Private
Limited*
Private Limited
Limited
Zee Telefilms Ltd (Now
known as Zee
Entertainment Enterprises
Limited)
Pan India Network
Infravest Private Limited,
Ayepee Lamitubes Limited
Suncity Projects Private
Limited
Communication (Gibraltar)
Limited
Limited
ASC Telecommunication
Limited
Asia Today Limited
Asia TV Limited
Ganjam Trading Co
Private Ltd
Zee Turner Limited
Bhilwara Telenet Services
Private Limited*
Quick Call Private
Limited*
Essel Telecom Holding
Limited*
Siti Cable Network
Limited
Network Limited
Management Services
Limited
Limited
Prajatma Trading
Company Private Limited
Veena Investment Private
Limited
Kenllot Gaming Solution
Private Limited
Intrective Tredex Private
Limited
Ltd.*
* Ceased to be subsidiary
on March 31st, 2006
Year ended
31st March, 2005
Private Limited
Private Limited
known as Zee
Entertainment
Pan India Network
Infravest Private Limited
Ayepee Lamitubes
Limited
Limited,
Communication
(Gibraltar) Limited
Limited
ASC
Telecommunication
Limited
Asia Today Limited
Asia TV Limited
Ganjam Trading Co.
Private Ltd
Zee Turner Limited
Siti Cable Network
Limited
Network Limited
Management Services
Limited
Limited
Prajatma Trading
Company Private
Limited
Veena Investment
Private Limited
Jawahar Goel,
Interactive Tradex
Private Limited
Kavita Goel
Zee Interactive Learning
System Limited
ASC (U K) Limited
ASC (Maurititus)
th
Period ended 30
June, 2008
Zee Turner Limited,
Zee News Limited,
Zee Aakash News
Private Limited,
Zee Entertainment
Zee Multi-Media
Worldwide Mauritus
Limited,
Year ended
31st March, 2008
Zee Multi-Media
Worldwide Mauritus
Limited,
Limited,
Agrani Satellite
Communication (Gib)
Limited,
Essel Shyam
Communication Limited,
Essel Shyam Technologies
Limited,
Private Limited,
Agrani Telecom Limited,
Year ended
31st March, 2007
Quick Call Private
Limited
Diligent Media
Corporation Limited
Indian Cable Net
Company Limited
Mr Jawahar Lal Goel
Year ended
31st March, 2006
Year ended
31st March, 2005
Mr. Subhash Chandra
Mr. Ashok Kurien
Mr. B.D.Narang
Mr. Arun Duggal
Mr. Pritam Singh
Mr. Subhash Chandra
Mr. Ashok Kurien
Mr. B.D.Naran,
Mr. Arun Duggal
Mr. Pritam Singh*
* w.e.f April 27 , 2007
$ w.e.f October 22, 2007
Mr. Subhash Chandra
Mr. Jawahar Lal Goel#
Mr. Ashok Kurien#
Mr. B.D.Naran,#
Mr. Arun Duggal#
Mr. Laxmi Narayan Goel*
Mr. Punit Goenka*
Mr. Rajagopalan
Chandrashekhar*
Mr. Ashok Goel*
* Upto January 6, 2007
# w.e.f. January 6, 2007
156
Mr. Subhash Chandra
Mr. Ashok Goel
Mr. Puneet Goenka
Mr. Rajagopalan
Chandrashekhar
Mr. Subhash Chandra
Mr. Ashok Goel
Mr. Puneet Goenka
Mr. Rajagopalan
Chandrashekhar
(Rs. In lacs)
Particular
Sales, Services & Recoveries (Net of Taxes)
Zee News Limited
Asia Today Limited
Asia TV Limited
Zee Turner Limited
New Era Entertainment Network Limited
Others
Purchase of Goods & Services
Zee Turner Limited
Integrated Subscribers Management Services
Limited
Others
Rent Paid
E-City Entertainment (I) Private Limited
Interest Paid
Rupee Finance & Management Private Ltd.
Others
Donation
Zee Foundation
Interest Received
Purchase of Fixed Assets
Others
Sale of Fixed Assets
Sale of Investment
Loan, Advance and Deposit Taken (Including
advance against share application money)
Zee News Limited
3 Months Period
ended 30 June
2008
Year ended
March 31,
2008
Year ended
March 31,
2007
Year
ended
March 31,
2006
Year
ended
March 31,
2005
333.50
67.35
84.59
121.66
59.90
3,637.33
2,196.53
423.51
833.54
-
1,261.10
213.55
300.85
419.57
6.37
320.76
10,025.83
5,549.87
1,295.82
1,041.70
1,426.63
-
4726.63
1,783.22
711.45
348.97
248.05
745.21
889.73
9,877.73
8,025.22
674.52
255.66
710.25
-
1,200.13
85.94
46.45
177.53
172.25
591.44
87.50
39.02
5,163.27
26.24
360.80
54.90
7.81
3,714.87
644.63
83.23
27.42
19.01
67.51
415.19
32.27
89.54
46.05
32.63
-
-
-
-
937.23
0.20
183.75
193.28
186.90
6.38
1,256.52
233.58
21.36
976.92
24.66
178.65
152.55
26.10
-
711.81
140.99
106.29
11.51
23.19
2,425.55
1,974.81
401.43
40.66
8.65
592.90
502.18
86.45
4.27
388.73
388.73
-
212.08
55.72
43.34
12.38
520.12
496.25
9.51
14.36
25.00
25.00
528.19
460.18
68.01
7,289.34
29.61
7,256.46
3.27
5.96
5.96
-
61.42
8.64
8.64
67.41
67.41
3.81
3.81
6,943.18
6,930.34
12.84
12.16
12.16
2,022.17
2,022.17
10.66
248.55
248.55
640.13
639.96
0.17
-
7,836.36
78,790.90
6,421.28
10,141.85
2,690.26
6.31
3,200.00
130.00
2,500.00
31,770.00
30,000.00
217.50
16,800.00
-
3,263.25
1,053.00
2,100.00
-
31.11
6,900.00
830.00
1,787.83
-
2,541.21
-
2,000.00
157
Particular
Limited
Others
Repayment of Loan, Advance and Deposit
Taken
Kenlott Gaming Solutions Private Limited
Zee News Limited
Zee Interactive Learning Systems Limited
Others
Loan, Advance and Deposit Given
ITZ Cash Card Limited.
Others
Refund Received against Loan, Advance and
Deposit Given
Ganjam Trading Co. Private Ltd.
Jay Properties Private Ltd.
Others
Amount Written Off
Zee Turner Limited
Bhilwara Telenet Services Limited
Corporate Guarantee received
Release of Corporate Guarantee received
Brio Academic
Others
Assets & Liabilities Received Pursuant to
Scheme of Arrangement
DCS undertaking of Zee Entertainment
Enterprises Limited
Total Assets
Total Liabilities
Total Assets
Year ended
March 31,
2008
Year ended
March 31,
2007
Year
ended
March 31,
2006
Year
ended
March 31,
2005
-
-
500.00
-
0.05
3.40
5.03
92.91
149.05
5,017.61
46,320.15
2,922.49
81.00
518.02
2,200.00
810.00
2,000.00
6.31
1.30
4,456.12
1,934.51
32.00
5.20
2,483.91
0.50
17,300.00
29,000.00
20.15
273.81
267.07
6.74
-
250.00
1,053.00
1,600.00
19.49
4,236.41
3,136.46
941.00
158.95
21.00
60.00
13,896.42
11,986.06
584.59
36.25
355.00
700.00
234.52
433.27
73.00
11.75
9,381.88
2,070.00
2,055.00
5,184.08
72.80
-
40.96
2,508.78
13,017.44
6,406.89
8000.00
8000.00
6,047.81
6,047.81
-
15.00
18.00
7.96
4.56
4.56
6,227.00
6,227.00
10,000.00
10,000.00
-
155.11
2,312.82
40.85
240.00
200.00
15.00
15.00
10.00
22,240.31
22,240.31
22,240.31
22,240.31
80.31
79.50
0.81
293.86
982.42
5,073.23
3,430.75
2,755.00
482.18
-
4,201.66
1,839.00
355.00
11.23
-
-
-
13,856.07
-
-
-
-
17,119.52
3,263.45
(4,245.84)
10,118.49
-
-
3 Months Period
ended 30 June
2008
158
Particular
Total Liabilities
Total Assets
Total Liabilities
Assets & Liabilities Received pursuant to Slump
Sale
Total Assets
Total Liabilities
Purchase Consideration
Key Management Personnel
Remuneration to Managing Director
Jawahar Lal Goel
Salary & Allowances
Jawahar Lal Goel
Balance at the end of period:
Loan, Deposit and Advances Given
Afro-Asian Satellite Comm. (UK) Limited
Afro-Asian Satellite Comm. (Gib.) Limited
Agrani Satellite Comm. (Gib.) Limited
Jay Properties (P) Ltd.
Others
Provision outstanding against advances given
Afro-Asian Satellite Comm. (UK) Limited
Afro-Asian Satellite Comm. (Gib.) Limited
Others
Loan, Deposit and Advances Taken (Including
advance share application money)
Kenlott Gaming Solutions Private Limited
Ayepee Lamitube Limited
Rupee Finance & Management Private Limited
Play Win Infrawest Private Limited
Others
Creditors for expenses and other liabilities
Limited
Zee Turner Limited
ASC (UK) Limited
ASC (Maurititus)
Others
14,364.33
98.20
11,414.15
11,315.95
Year
ended
March 31,
2006
-
Year
ended
March 31,
2005
-
-
(4511.78)
15,249.00
19,755.78
5.00
-
-
15.43
15.43
-
61.74
61.74
-
12.94
12.94
10.15
10.15
-
-
27,582.88
3,768.82
8,277.08
38.41
1,688.08
9,679.14
1,512.01
2,483.91
135.43
12,164.61
3,768.82
8,277.08
118.71
25,405.06
3,768.82
8,277.08
38.41
587.21
11,091.60
1,506.81
135.13
12,164.61
3,768.82
8,277.08
118.71
23,991.35
3,768.82
8,277.08
38.41
1,331.28
8,996.56
1,439.82
139.38
12,164.61
3,768.82
8,277.08
118.71
22,029.49
3,768.82
8,277.08
38.41
9,233.33
585.93
125.92
12,084.31
3,768.82
8,277.08
38.41
23,457.77
3,768.82
8,277.08
5,073.23
2,055.00
3,075.75
1,207.89
12,084.31
3,768.82
8,277.08
38.41
40,695.22
36,981.31
2,454.08
1,844.83
6,055.70
27.00
33,398.37
10.78
4,205.14
347.50
725.03
1,787.83
193.57
23,556.85
8,718.43
-
27.00
30,040.65
10.78
4,323.83
217.50
403.67
1,787.83
170.05
21,224.96
8,629.81
-
27.00
19.00
10.78
38.06
506.37
1,787.83
65.04
15,876.05
7,399.69
-
27.00
19.00
10.78
1,787.83
0.22
8,661.74
4,616.88
2,670.53
27.00
10.78
139.45
4,364.78
1,370.00
143.69
2,857.24
452.66
-
-
-
-
1,164.44
-
13,912.60
925.82
11,826.20
768.95
8,006.33
470.03
35.69
174.20
34.49
1,868.41
496.57
5.12
3 Months Period
ended 30 June
2008
Year ended
March 31,
2008
Year ended
March 31,
2007
-
-
-
159
Particular
Debtors
Asia Today Limited
Asia TV Limited
Zee News Limited
Interactive Tradex India Limited
Others
Bhilwara Talenet Services Limited
Corporate Guarantee Received
3 Months Period
ended 30 June
2008
Year ended
March 31,
2008
Year ended
March 31,
2007
3,848.38
354.89
438.51
2,006.34
1,048.64
20,527.00
20,527.00
3,865.42
386.37
343.46
1,931.05
1,204.54
18,467.31
18,467.31
3,757.00
237.72
164.73
468.82
1,933.22
952.51
240.00
200.00
15.00
15.00
10.00
22,240.31
22,240.31
Year
ended
March 31,
2006
702.50
178.58
172.25
0.53
153.33
85.54
101.37
10.90
40.00
15.00
15.00
10.00
4,000.00
4,000.00
Year
ended
March 31,
2005
199.48
27.42
0.89
61.84
2.22
101.37
5.74
500.00
500.00
4,000.00
4,000.00
Note:
1
2
3
4
The related party transaction disclosed are as per the requirement of Accounting standard ‘18’.
2005 hence above statement is for the financial year ended March 31, 2005 and onwards.
Entities who account for less then 10% of the aggregate for that category of transaction are grouped under
‘others’.
The above Statement should be read with the Significant Accounting Policies and selected notes to accounts
Restated Summary Statement as appearing in Annexure D to this report.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
160
DISH TV INDIA LIMITED (Consolidated)
(formerly Known as ASC Enterprises Ltd.)
Annexure-N
Restated Segmental Reporting of the Company
The Company follows AS-17 ‘Segmental Reporting’ relating to the reporting of the financial and descriptive
information about their operating segments in financial statements.
The Company’s reportable operating segments have been determined in accordance with the internal
management structure, which is organized based on the operating business segments as described below. The
geographical segment is not relevant as exports are insignificant.
Direct to Home Services (DTH) – Uplink of satellite television signals to be received by the customer directly
in the home. This segment derives revenue by way of Subscription, Lease Rental, Placement and Active
Services and Other Incomes.
Trading – Trading in electronics and other equipments.
Teleport Services – Facility for uplink signals.
Subscriber Management Services – Providing conditional access services, customer support services and
related activities.
Transponder Services – Acquisition of Transponders for DTH Services and leasing to external parties.
Public Mobile Radio Trunking Services (PMRTS) - Providing mobile radio trunking services. The segment
drives income mainly from network subscription and rental.
Services – Comprises of servicing and leasing of electronics devices.
161
(a) Business Segment ( for the three months ended June 30, 2008 )
(Rs. In lacs)
DTH
Trading
Subscriber
Management
Services
Teleport
Services
Description
Transponder
PMRTS Services Unallocated Elimination
Services
Segment Revenue
Total
15,520.94
620.07
318.83
9.03
-
-
-
-
-
-
-
-
2,006.22
-
-
-
-
(2,006.22)
-
15,520.94
620.07
318.83
2,015.25
-
-
-
-
(2,006.22)
16,468.87
(10,399.75)
(996.61)
(132.80)
(254.85)
-
-
-
-
-
(11,784.01)
(10,399.75)
(996.61)
(132.80)
(254.85)
-
-
-
-
-
(11,784.01)
Interest Expenses
-
-
-
-
-
-
-
-
-
1,635.33
Interest Income
Profit / (Loss) Before
Tax
Current TaxesFBT/Wealth Tax
-
-
-
-
-
-
-
-
-
192.54
-
-
-
-
-
-
-
-
-
(13,226.80)
-
-
-
-
-
-
-
-
-
17.34
Deferred Tax
Short Income Tax
provision for earlier
years
Tax provision for earlier
years written back
Profit / (Loss) After
Tax but before
Minority Interest
-
-
-
-
-
-
-
-
-
1.72
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,245.86)
Minority Interest
Profit / (Loss) After
Tax and Minority
Interest
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,245.86)
(b) Other segment Information
90,467.93
Segment Assets
806.21
2,705.07
8,476.67
15,314.45
-
-
32,348.35
(21,127.37)
128,991.31
184,825.93
1,962.19
183.05
8,730.63
6,079.35
-
-
-
(11,682.27)
190,098.88
7,923.22
-
-
815.25
15.96
-
-
-
-
8,754.43
4,368.45
0.02
88.36
269.98
-
-
-
-
-
4,726.81
5.40
-
-
-
-
-
-
-
-
5.40
External Sales
Inter Segment Sales
Total Revenue
Segment Results
Operating Profit/(Loss)
before interest & Tax
Segment Liabilities
Capital Expenditure
Depreciation/Amortisati
on
Non cash expenditure
other than
Depreciation/Amortisati
on
162
16,468.87
(formerly Known as ASC Enterprises Ltd.)
(a) Business Segment ( year ended March 31, 2008 )
(Rs. In lacs)
Description
DTH
Subscriber
Management
Services
Teleport
Services
Trading
Transponder
Services
PMRTS
Services Unallocated Elimination
-
Segment Revenue
External Sales
Total
38,974.31
1,142.28
1,121.75
40.17
-
-
-
-
-
41,278.51
-
230.67
-
5,698.03
-
-
-
-
(5,928.70)
-
38,974.31
1,372.95
1,121.75
5,738.20
-
-
-
-
(5,928.70)
41,278.51
(35,161.48)
(891.47)
(334.12)
105.03
-
-
-
-
- (36,282.04)
(35,161.48)
(891.47)
(334.12)
105.03
-
-
-
-
- (36,282.04)
Interest Expenses
-
-
-
-
-
-
-
-
-
5,341.51
Interest Income
-
-
-
-
-
-
-
-
-
654.04
Profit / (Loss) Before Tax
Current TaxesFBT/Wealth Tax
-
-
-
-
-
-
-
-
- (40,969.51)
-
-
-
-
-
-
-
-
-
61.43
Deferred Tax
Short Income Tax
provision for earlier years
Tax provision for earlier
years written back
Profit / (Loss) After Tax
but before Minority
Interest
-
-
-
-
-
-
-
-
-
10.28
-
-
-
-
-
-
-
-
-
0.98
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (41,042.20)
Minority Interest
and Minority Interest
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (41,042.20)
87,041.55
Segment Assets
935.01
2,567.32
8,671.55
15,665.16
-
-
30,958.79 (21,357.26)
124,482.12
Segment Liabilities
167,105.23
1,841.55
75.28
8,803.87
6,430.06
-
-
- (11,912.16)
172,343.83
Capital Expenditure
25,789.79
-
-
3,109.57
105.43
-
-
-
-
29,004.79
Depreciation/Amortisation
Non cash expenditure
other than Depreciation
/Amortisation
14,549.54
0.08
355.19
798.48
-
-
-
-
-
15,703.29
150.99
-
-
-
-
-
-
-
-
150.99
Inter Segment Sales
Total Revenue
Segment Results
before interest & Tax
163
-
(a) Business Segment (Year ended March 31, 2007)
(Rs. In lacs)
Subscriber
Teleport
Transponder
Trading
Management
PMRTS Services Unallocated Elimination
Services
Services
Services
DTH
Description
Total
Segment Revenue
External Sales
Inter Segment Sales
Total Revenue
18,014.01
18,014.01
69.16 1,048.88
71.02
-
-
-
-
-
-
2,747.33
-
-
-
-
(2,747.33)
-
69.16 1,048.88
2,818.35
-
-
-
-
(2,747.33)
19,203.07
-
19,203.07
(25,122.78)
35.04
(107.83)
(70.87)
-
-
-
-
1,247.05
(24,019.39)
(25,122.78)
35.04
(107.83)
(70.87)
-
-
-
-
1,247.05
(24,019.39)
Interest Expenses
-
-
-
-
-
-
-
-
-
1,438.60
Interest Income
-
-
-
-
-
-
-
-
-
582.82
-
-
-
-
-
-
-
-
-
(24,875.17)
Current Taxes-FBT/Wealth Tax
-
-
-
-
-
-
-
-
-
(27.19)
Deferred Tax
Short Income Tax provision for
earlier years
Tax provision for earlier years
written back
Profit / (Loss) After Tax but
before Minority Interest
-
-
-
-
-
-
-
-
-
29.03
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(24,873.33)
Minority Interest
Profit / (Loss) After Tax and
Minority Interest
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(24,873.33)
463.48 2,930.40
11,180.68
12,643.38
-
-
23,488.45 (19,716.79)
103,978.89
249.30
11,116.40
3,408.28
-
-
- (10,271.69)
110,798.40
- 2,120.63
2,369.28
98.92
-
-
-
-
63,518.40
460.15
-
-
-
-
-
6,236.26
0.16
-
-
-
79.50
-
711.14
Segment Results
Operating Profit/(Loss) before
interest & Tax
Segment Assets
Segment Liabilities
Capital Expenditure*
72,989.29
104,332.62 1,963.49
58,929.57
5,399.06
23.27
353.78
Non cash expenditure other than
509.80
121.68
Depreciation /Amortisation
*Capital Expenditure includes assets received pursuant to the Scheme of
Arrangement.
164
(Rs. In lacs)
DTH
Trading
Description
Subscriber
Teleport
Management
Services
Services
Transpond
PMRTS Services Unallocated
er Services
Elimination
Total
Segment Revenue
External Sales
Inter - Segment Sales
Total Revenue
2,077.20 1,460.24
492.68
-
- 1,478.25
66.33
-
(300.92)
-
-
-
-
-
-
-
-
-
2,077.20 1,460.24
492.68
-
- 1,478.25
66.33
-
(300.92)
5,273.78
-
5,273.78
(8,781.31)
(35.50)
(28.38)
-
(216.34)
(342.15)
(84.69)
-
-
(9,488.37)
(8,781.31)
(35.50)
(28.38)
-
(216.34)
(342.15)
(84.69)
-
-
(9,488.37)
Interest Expenses
-
-
-
-
-
-
-
-
-
87.35
Interest Income
-
-
-
-
-
-
-
-
-
31.28
Profit/ (Loss) Before Tax
-
-
-
-
-
-
-
-
-
(9,544.44)
Current Taxes - FBT/Wealth Tax
-
-
-
-
-
-
-
-
-
(18.91)
Deferred Tax
earlier years
written back
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(9,563.35)
Minority Interest
Minority Interest
-
-
-
-
-
-
-
-
-
1.82
-
-
-
-
-
-
-
-
-
(9,561.53)
Segment Assets
22,669.59
315.97
952.93
-
12,551.56
-
278.15
14,521.51
(13,962.49)
37,327.22
Segment Liabilities
19,305.47 2,015.33
39.94
-
3,316.46
-
55.49
7,400.00
(3,275.34)
28,857.35
Capital Expenditure
10,250.31
7.94
-
-
95.52
278.62
-
-
-
10,632.39
251.30
13.62
32.15
-
-
171.13
20.24
-
-
488.44
1.97
74.78
-
-
-
7.11
2.29
-
-
86.15
Segment Results
Interest and Tax
(b) Other Segment Information
165
DISH TV INDIA LIMITED
Consolidated Restated Segment Reporting of the Group
(Rs. In lacs)
DTH
Trading
Description
Subscriber Transpo
Teleport
Manageme
nder
Services
nt Services Services
PMRTS
Services Unallocated Elimination
Total
Segment Revenue
410.00 3,222.02
External Sales
-
-
-
1,135.77
263.80
-
(544.66)
4,558.44
-
-
-
-
-
-
-
-
-
410.00 3,222.02
71.52
-
-
1,135.77
263.80
-
(544.66)
4,558.44
(2,445.30) (930.71)
(137.62)
-
44.49
(110.38)
(30.53)
-
- (3,610.05)
(2,445.30) (930.71)
(137.62)
-
44.49
(110.38)
(30.53)
-
- (3,610.05)
Inter - Segment Sales
Total Revenue
Segment Results
Interest and Tax
71.52
Interest Expenses
-
-
-
-
-
-
-
-
-
247.82
Interest Income
-
-
-
-
-
-
-
-
-
275.55
Profit/ (Loss) Before Tax
-
-
-
-
-
-
-
-
- (3,582.32)
Current Taxes - FBT/Wealth Tax
-
-
-
-
-
-
-
-
-
-
Deferred Tax
earlier years
written back
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.40
-
-
-
-
-
-
-
-
- (3,577.92)
Minority Interest
Minority Interest
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (3,564.20)
Segment Assets
1,258.39
699.20
295.99
- 12,653.61
6,748.90
114.69
Segment Liabilities
5,877.18 1,931.85
-
- 6,001.56
7,620.91
55.49
1,150.04
(6,742.97)
15,894.06
Capital Expenditure
331.48
11.91
308.84
-
152.38
203.26
0.30
-
-
1,008.17
145.57
58.78
26.69
-
-
211.42
34.45
-
-
476.91
5.18
295.70
-
-
-
9.34
116.69
-
-
426.91
13.72
(b) Other Segment Information
25,898.49 (18,649.89)
Note:
1
Accounting Standard ‘AS-17’ became applicable to the Company for the financial year ended March 31,
2005 hence above statement is for the financial year ended 31, 2005 and onwards.
2.
The above Statement should be read with the Significant Accounting Policies and selected notes to accounts
for Restated Summary Statements as appearing in Annexure D to this Report.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
166
29,019.38
AUDITORS REPORT
The Board of Directors
Dish TV India Limited (Formerly known as ASC Enterprises Limited)
B-10, Lawrence Road Industrial Area
New Delhi- 110035
Dear Sirs,
1.
We have examined the Financial Information of Dish TV India Limited (Formerly known as ASC
Enterprises Limited) (hereinafter referred to as ‘the Company’) for the three month period ended on
June 30, 2008 and for each of the financial years ended on March 31, 2008, 2007, 2006, 2005 and 2004
prepared by the Company and approved by the Board of Directors of the Company in its meeting held
on November 12, 2008 for the proposed Rights Issue of equity shares of the Company, in accordance
with the requirements of:
a.
Paragraph B(1) of part II of Schedule II to the Companies Act, 1956 (hereinafter referred to as ‘the
Act’);
b.
The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000
(‘the Guidelines’) and the clarifications issued by the Securities and Exchange Board of India
(hereinafter referred to as ‘the SEBI’) on January 19, 2000 as amended from time to time, in
pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992;
c.
The terms of reference received from the Company and
d.
The Guidance Note on Reports in Company Prospectuses and Guidance Note on Audit
Reports/Certificates on Financial Information in Offer Documents issued by the Institute of
Chartered Accountants of India (ICAI).
The financial information furnished in this report is based on the financial statements which have been
audited by us for the three months period ended June 30, 2008 and for the financial years ended March
31, 2008, 2007, 2006, 2005 and 2004 as well. The Financial Statements for the three months period
ended June 30, 2008 are approved by the Board of Directors of the Company for the purpose of
disclosure in the Offer Document being issued by the Company in connection with the proposed Right
Issue of Equity Shares of the Company. These Financial Statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these accounts based on our
audit.
2.
We report that:
(a) (i) Restated Summary Statement of Assets and Liabilities of the Company, as at June 30, 2008 and
March 31, 2008, 2007, 2006, 2005 and 2004 is as set out in Annexure 1 to this report, after making
such adjustments and regroupings, as described in para (2) (a) (v) below, as in our opinion are
appropriate and more fully described in the notes appearing in Annexure 4 to this report.
(ii) The Restated Summary Statement of Profit and Loss of the Company for the three months period
ended June 30, 2008 and for the financial years ended March 31, 2008, 2007, 2006, 2005 and 2004
is as set out in Annexure 2 to this report. These profits and losses have been arrived at after making
such adjustments and regroupings as described in Para (2)(a)(v) below, as in our opinion are
appropriate and more fully described in the notes appearing in Annexure 4 to this report.
(iii) The Restated Summary Statement of Cash Flows for the three months period ended June 30, 2008
and for the financial years ended March 31, 2008, 2007, 2006 and 2005 is as set out in Annexure 3
to this report, after making such adjustments and regroupings in para (2)(a)(v) below, as in our
opinion are appropriate and more fully described in the notes appearing in Annexure 4 to this report.
Restated Summary Statement of Cash Flow for the financial year ended March 31, 2004 is not
provided as in the opinion of the Company, the Accounting Standard -3 ‘ Cash Flow Statement ‘
became applicable on the Company from accounting period starting from April 1, 2004 only.
167
(iv) The Statement of Significant Accounting Policies applied to all reporting periods in the financial
information, described in para 2(a)(i) to 2(a)(iii) above, as appearing in para A of Annexure 4 to this
report, the summary of Significant Selected Notes on the Restated Summary Statement of Assets and
Liabilities and Restated Summary Statement of Profit and Loss and Statement of qualifications in
Auditor’s Report during the reporting periods, as in our opinion are appropriate and more fully
described in the notes appearing in para C of Annexure 4 to this report.
(v) On the basis of our examination of these “Restated Summary Statements”, as highlighted above, we
state that:
v.1
There is no adjustment on account of change or correction of accounting policies:
v.2 As explained in Note 12.1 of Para C of Annexure 4, qualifications in the auditors’ report which
require any adjustments in the “Restated Summary Statements” have been made. However, the
qualifications in the auditors’ report in respect of three months period ended June 30, 2008 and
financial year ended March 31, 2008, 2007, 2006, 2005 and 2004 where it is not possible to
make adjustments/ rectifications, have been summarized in Note12.2 and 12.3 of Para C of
Annexure 4 to this report;
v.3 Notes on adjustments for Restated Summary Statement are given in Para D of Annexure 4 to
this report.
v.4 Exceptional items have been separately disclosed in the Restated Summary Statements however
there are no extraordinary items, which need to be disclosed separately in the Restated Summary
Statements and
v.5
There are no revaluation reserves which need to be disclosed separately in the “Restated
Summary Statements”.
As a result of these adjustments, the amounts reported in the above mentioned statements/financial
information are not necessarily the same as those appearing in the audited financial statements for the
relevant financial years/period.
(b) The Company has not declared any dividend during three months period ended June 30, 2008 and
financial year ended March 31, 2008, 2007, 2006, 2005 and 2004.
(c) For the financial year ended March, 2004 ‘Segment Reporting‘ and ‘Related Party Disclosures‘ are
not presented as in the opinion of the Company, the relevant accounting standards ‘AS-17’ ‘Segment
Reporting’ and ‘AS 18’ ‘Related Party Disclosures‘ respectively became applicable to the Company
from accounting period commencing from April 1, 2004.
(d) The Company has not prepared Statement of Tax Shelter of the Company for all the reported periods
as the Company has not recognized deferred tax benefits and liabilities based on the conservative
policy of the Company keeping in view accumulated loss and unabsorbed depreciation.
(e) We draw reference to Note 4 para C of Annexure 4 to Selected Notes to Accounts regarding
preparing the accounts on going concern basis.
3.
We have examined the following financial Information relating to the Company, proposed to be
included in the Offer Document, as approved by the Board of Directors of the Company and annexed
to this report:
i.
Capitalization Statement as at June 30, 2008, enclosed in Annexure 5.
ii.
Details of Secured and Unsecured Loans taken, enclosed in Annexure 6.
iii.
Details of Investments, enclosed in Annexure 7.
iv.
Details of Sundry Debtors, enclosed in Annexure 8.
v.
Details of Loans and Advances, enclosed in Annexure 9.
vi.
Details of items of Sales and Services, enclosed in Annexure 10.
168
vii. Details of items of Other Income, enclosed in Annexure 11.
viii. Statement of accounting ratios based on the adjusted profits relating to earnings per share, net
asset value per share, return on net worth, enclosed in Annexure 12.
ix.
Details of Related Party Transaction (related parties within the meaning of AS 18 issued by
ICAI), enclosed in Annexure 13.
x.
Details of Segment Reporting, enclosed in Annexure 14
xi.
Statement of Tax Shelters, enclosed in Annexure 15.
xii. Details of Contingent Liabilities, as appearing in Note 10 Para C of Annexure 4.
4.
In our opinion, the financial information as referred to in Para 2 and 3 above, read with the respective
significant accounting policies and notes disclosed in Annexure 4 and after making adjustments and regroupings as considered appropriate and disclosed in Para 2 (a) (v) above has been prepared in
accordance with part II of Schedule II of the Act and the Guidelines.
5.
This report should not, in any way be construed as a re-issuance or re-dating of any of the previous
audit reports issued by the auditors for the respective years nor should this report be construed as a new
opinion on any of the financial statements referred to herein.
6.
This report is intended solely for your information and for inclusion in the Offer Document in
connection with the proposed Rights Issue of the Company and is not be used, referred to or distributed
for any other purpose without our prior written consent.
L. K. Shrishrimal
Partner
M.No.72664
For MGB & Co
Place: Noida
Dated: November 12, 2008
169
Annexure-1
Standalone Restated Summary Statement of Assets and Liabilities of the Company
(Rs. In lacs)
Particulars
A
Fixed Assets
Gross Block
Less :
upto date
Net Block
b) Tangible Assets
Gross Block
Less :
upto date
Net Block
c) Capital Work in
Progress
Total (A) (a+b+c)
B
C
D
E
F
i
ii
Investments
Advances
Inventories
Sundry Debtors
Loans and Advances
Accrued Interest on
Investments
Total (C)
Secured Loans
Unsecured Loans
Current Liabilities and
Provisions
Advance Share Application
Money
Total (D)
Networth (A+B+C-D)
Represented by
Share Capital
Less: Share Suspense (Refer
Note 5 of Annexure 4)
Reserves & Surplus
(Excluding Revaluation
Reserve)
Less: Debit Balance of Profit
June 30,
2008
March 31,
2008
As at
March 31,
March 31,
2007
2006
March 31,
2005
March 31,
2004
7,281.89
7,268.02
7,253.25
1,000.28
1,000.00
1,000.00
2,636.51
2,280.52
855.74
250.00
150.00
50.00
4,645.38
4,987.50
6,397.51
750.28
850.00
950.00
85,042.13
77,535.78
54,449.08
5,567.92
713.18
101.20
23,459.91
19,360.73
5,881.28
259.10
81.06
25.98
61,582.22
58,175.05
48,567.80
5,308.82
632.12
75.22
14,189.01
13,797.66
11,264.06
5,365.24
-
260.90
80,416.61
76,960.21
66,229.37
11,424.34
1,482.12
1,286.12
9,445.10
9,445.10
9,445.10
9,440.10
11,263.61
11,271.11
420.33
3,765.08
1,269.98
30,757.71
471.22
3,843.70
1,994.23
28,441.50
113.71
3,906.44
1,133.17
18,694.06
47.47
753.30
593.62
14,680.02
233.76
441.08
12,545.49
460.36
464.01
13,166.91
-
-
-
-
-
0.14
36,213.10
34,750.65
23,847.38
16,074.41
13,220.33
14,091.42
801.01
50,542.39
6,838.68
45,823.83
14,446.96
3,063.15
780.85
56.78
1,394.48
97.78
213.47
1,787.78
133,666.48
114,518.00
86,974.13
18,507.77
5,467.05
3,114.98
-
-
-
7,400.00
-
0.45
185,009.88
(58,935.07)
167,180.51
(46,024.55)
104,484.24
(4,962.39)
26,745.40
10,193.45
6,959.31
19,006.75
5,116.68
21,531.97
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
7,156.88
-
-
(2,874.65)
-
-
-
4,282.23
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
16,958.57
16,958.57
16,958.57
37,282.45
37,282.45
37,282.45
80,175.87
67,265.35
26,203.19
34,245.88
25,432.58
22,907.36
170
Particulars
As at
March 31,
March 31,
2007
2006
June 30,
2008
March 31,
2008
(63,217.30)
(50,306.78)
(9,244.62)
Networth (i+ii)
(58,935.07)
(46,024.55)
(4,962.39)
March 31,
2005
March 31,
2004
3,036.57
11,849.87
14,375.09
10,193.45
19,006.75
21,531.97
and Loss Account
G
accounts for Restated Summary Statement as appearing in Annexure '4' of this Report.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
171
Annexure-2
Standalone Restated Summary Statement of Profit and Loss of the Company
(Rs. In lacs)
Particulars
INCOME
Sales & Services (Refer Annexure
10 )
Other Income (Refer Annexure
11)
Total
EXPENDITURE
Purchases
Operating Costs
Personnel Cost
Administrative and Other
Expenses
Financial Charges
Total
Profit/(Loss) before Tax and
Exceptional items
Exceptional items (Refer Note 9.1
to Annexure 4 )
Profit/(Loss) before Tax but
after Exceptional items
Provision for Taxation-Current
Tax
-Deffered Tax
-Fringe Benefit
Tax
-Wealth Tax
Excess/ (Short) Provision for
earlier years Written Back
/(Provided)
Profit/(Loss) after Tax
Less:Transfer to Restructuring
Account(Refer Annexure 4 )
Balance Carried to Balance
Sheet
Net Profit/(Loss) Before
Adjustment as per Audited
Statement
Total of Adjustments (See para
D.2 of annexure 4)
Net Profit/(Loss) After
Adjustment
For the three
months
period ended
June 30,
2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
For the
year ended
March 31,
2004
16,445.91
41,328.35
19,132.05
3,144.04
964.06
1,054.94
209.08
16,654.99
(50.89)
890.02
42,218.37
357.51
876.68
20,008.73
66.23
77.46
3,221.50
47.46
284.67
1,248.73
-
25.46
1,080.40
-
16,604.10
42,575.88
20,074.96
3,268.96
1,248.73
1,080.40
1,472.66
12,407.17
1,138.62
2,402.77
34,425.47
2,950.76
120.31
22,801.51
1,487.21
611.77
7,316.22
214.87
469.52
2,469.55
200.16
716.39
487.26
135.55
1,017.86
6,499.67
2,505.71
4,456.81
29,498.50
2,966.47
20,149.81
5,779.09
14,904.73
83,579.10
2,528.04
10,250.30
1,752.91
5,752.84
44,693.12
186.91
3,264.47
201.28
283.45
12,078.97
159.77
0.62
306.47
172.26
3,778.35
1,314.68
0.50
131.19
56.70
2,842.27
(12,894.40)
(41,003.22)
(24,618.16)
(8,810.01)
(2,529.62)
(1,761.87)
-
-
-
12,084.30
(12,894.40)
(41,003.22)
(24,618.16)
(8,810.01)
(2,529.62)
(13,846.17)
-
-
-
-
-
-
16.00
0.13
57.44
0.51
24.50
0.58
3.29
-
-
-
(12,910.53)
(67,265.34)
(0.98)
(41,062.15)
(26,203.19)
(24,643.24)
(34,245.88)
(8,813.30)
(25,432.58)
4.40
(2,525.22)
(22,907.36)
1.67
(13,844.50)
(9,062.86)
-
-
32,685.93
-
-
-
(80,175.87)
(67,265.34)
(26,203.19)
(34,245.88)
(25,432.58)
(22,907.36)
(13,667.26)
(41,320.46)
(25,188.15)
(20,783.26)
(2,788.40)
(77.41)
756.73
258.31
544.91
11,969.96
263.18
(13,767.09)
(12,910.53)
(41,062.15)
(24,643.24)
(8,813.30)
(2,525.22)
(13,844.50)
172
The above statement should be read with the Significant Accounting Policies and Selected Notes to Accounts
for Restated Summary Statements, as appearing in Annexure '4' of this Report.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
173
Annexure-3
Standalone Restated Summary Statement of Cash Flow of the Company
(Rs. In lacs)
Particulars
A)
B)
C)
Cash Flow from Operating Activities
Net Profit/(Loss) before Tax
Adjustment for :
Interest Income
Loss on Sale of Assets
Profit on sale of Investments
Provision for Doubtful Debts and Advances
Exchange Adjustments (Net)
Interest Expenses
Balances Written Off
Operating Profit before Working Capital
Changes
Adjustment for :
Decrease/(Increase)in Inventories
Decrease/(increase) in Trade and Other
Receivables
Increase/(Decrease) in Trade and Other
Payables
Cash Generated from Operations
Less : Direct Taxes Paid (net of Refunds)
Net Cash Flow from Operating Activities
Cash Flow from Investing Activities
Proceeds from Sale of Investments
Purchase of Investments
Security Received against Capital Goods
Proceeds from Sale of Fixed Assets
Purchase of Fixed Assets (including Capital
Work in Progress)
Decrease/(Increase) in Loans Given to
Subsidiaries (net)
Loans given to Others
Loan repaid by Others
Advance Against Share Application Money
given to Subsidaries
Advance Share Application to Others
Refund of Share Application Money given to
Subsidiaries
Interest Received
Net Cash Flow from Investing Activities
Cash Flow from Financing Activities
Advance Share Application Money Received
Repayment of Advance Share Application
Money Received
Interest Paid
Proceeds from Long Term Borrowing
Proceeds/ (Repayment) of Vehicle Loan
Proceeds from Short Term Borrowing
Repayment of Short Term Borrowing
Net Cash Flow from Financing Activities
Net Cash Flow during the period/year (A+B+C)
Cash and Cash Equivalents received pursuant to
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year
ended
March 31,
2007
(12,894.40)
4,456.81
(190.85)
5.40
355.99
1,635.30
-
(41,003.22)
14,904.73
(646.68)
150.99
(24.87)
(34.55)
5,341.32
-
(24,618.16)
5,752.84
(575.24)
12.36
576.94
(32.08)
1,430.56
-
(8,810.01)
283.45
(27.46)
1.97
61.28
(50.00)
(2,529.62)
172.26
(269.54)
5.18
230.09
-
(6,631.75)
(21,312.28)
(17,452.78)
(8,540.77)
(2,391.62)
50.89
(357.51)
(66.23)
(47.46)
-
(2,346.01)
(6,054.22)
(6,521.16)
(3,273.80)
238.13
17,829.90
27,438.72
42,361.24
9,628.75
2,357.86
8,903.03
(39.67)
8,863.36
(285.29)
(116.33)
(401.62)
18,321.08
(71.70)
18,249.38
(2,233.28)
(3.98)
(2,237.26)
204.37
(43.38)
160.99
4.61
6,524.87
(6,500.00)
3.23
505.60
4.30
1,823.51
3,407.96
22.67
7.50
5.99
(7,923.22)
(25,789.79)
(33,725.78)
(10,250.30)
(379.42)
-
-
-
1,521.25
16.00
(5.20)
-
33.00
(2,016.00)
1,908.33
(7,795.82)
5,995.68
(5,184.08)
6,039.90
(466.61)
(3,021.83)
(66.37)
1,203.30
(219.95)
-
-
(700.00)
(300.00)
-
810.00
30.00
1,000.00
-
-
12.84
(7,567.58)
89.15
(28,631.37)
47.05
(33,042.87)
27.46
(4,344.29)
269.67
555.61
-
-
-
7,400.00
-
-
-
-
-
(0.45)
(335.97)
1,663.62
9.87
7,700.25
(11,057.80)
(2,020.03)
(724.25)
-
(3,835.88)
3,517.13
(39.68)
96,765.48
(66,513.00)
29,894.05
861.06
-
(1,313.92)
(40.02)
19,154.36
(2,600.00)
15,200.42
406.93
132.62
(66.64)
21.81
588.92
(1,210.00)
6,734.09
152.54
-
(224.73)
(5.13)
1,190.78
(1,700.00)
(739.53)
(22.93)
-
174
For the
year ended
March 31,
2006
For the year
ended
March 31,
2005
Particulars
the Scheme
Cash and Cash equivalents at the beginning of
the period/year
Cash and Cash equivalents at the end of the
period/year
Cash and Cash Equivalents at the end to the
period/year comprises of:
Cash in hand
Balances with Scheduled Banks in Current
Accounts
Balances with Scheduled Banks in Deposit
Accounts
Balances with Scheduled Banks in Margin
Accounts
Total Cash and Cash Equivalent
For the three
months
ended June
30, 2008
For the
year ended
March 31,
2008
For the
year
ended
March 31,
2007
For the
year ended
March 31,
2006
For the year
ended
March 31,
2005
1,994.23
1,133.17
593.62
441.08
464.01
1,269.98
1,994.23
1,133.17
593.62
441.08
18.16
15.65
0.68
1.49
0.30
406.50
1,136.95
598.61
176.53
26.47
564.41
561.63
533.88
415.60
414.31
280.91
280.00
-
-
-
1,269.98
1,994.23
1,133.17
593.62
441.08
Notes
1
2005 hence above statement includes cash flow statement for the financial year ended March 31, 2005
and onwards.
2
Assets and Liabilities received pursuant to the Scheme and business acquired are not considered in the
above cash flow statement, being non cash transaction
3
Accounts for Restated Summary Statements, as appearing in Annexure '4' to this Report.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
175
Annexure-4
STANDALONE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUMMARY OF
SELECTED NOTES TO ACCOUNTS TO THE RESTATED SUMMARY STATEMENT
A.
SIGNIFICANT ACCOUNTING POLICIES:(a)
I. The Company generally follows mercantile system of accounting and recognizes income and
II. The financial statements have been prepared on historical cost convention and in accordance with
the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.
(b)
I.
Fixed Assets:
i.
The Company capitalizes Software and related implementation costs as intangible assets, where
it is reasonably estimated that the software has an enduring useful life.
ii.
License fees paid by the Company for acquiring license to operate Direct to Home (DTH)
services are capitalized as intangible asset.
II. Tangible fixed assets
i. Tangible fixed assets are stated at Cost less accumulated depreciation. Cost includes capital
cost, freight, installation cost, duties and taxes and other incidental expenses incurred during
the construction/installation stage attributable to bringing the assets to working condition for
its intended use.
ii. All capital costs and incidental expenditure incurred during pre operational period and advances
paid for capital expenditure are shown as Capital work-in-progress.
iii.
(c)
I.
Depreciation on tangible fixed assets is provided on straight line method at the rates and in the
manner prescribed in Schedule XIV to the Companies Act 1956, except customer premises
equipments on which depreciation is provided @ 20% based on useful life estimated by the
management
II. Leasehold improvements are amortized over the period of lease.
III. Computer Software are amortized based on managements estimate of useful life of five years
or license period whichever is shorter
IV. Goodwill on acquisition is amortized over a period of five years.
V.
(d)
I.
II. Lease Rentals is recognized in terms of the operating lease agreement.
176
III. Sale of goods is recognized when risk and rewards of ownership are passed on to the
IV. Income from other services is recognized on the completion of services. Period based
(e)
Investments:
I.
II.
(f)
Investments intended to be held for more than one year from the date of acquisition are classified
as long term investment and are carried at cost. Provision for diminution in value of these
investments is made to recognize a decline other than temporary.
Current investments are stated at cost or fair value whichever is lower.
Inventories:
Inventories are valued at lower of cost and net realizable value. Cost is determined on weighted
average basis.
(g) Retirement Benefits:
Institute of Chartered Accountants of India, originally comes into effect in respect of the accounting
periods commencing on or after April 01, 2006 and was mandatory in nature from that date.
Consequently, the above standard becomes applicable to the Company for any period on or after the
effective date. However, subsequently the Council of the Institute has deferred the mandatory
applicability of the standard for all periods on and after 7 December 2007. The Company adopted
the Accounting Standard (AS) 15, “Employee Benefits (revised 2005)” for the first time in preparing
restated statements, AS-15 (revised) has not been applied for the years ended March 31, 2006, 2005
and 2004 as the same was not applicable in those years. The restated financial statements for those
years have been prepared in compliance with the erstwhile Accounting Standard (AS) 15.
Consequently significant impact, if any, of applicability of the new standard has not been recognized
in the restated statements for the years ended March 31, 2006, 2005 and 2004.
I.
For the year ended March 31, 2006, 2005, 2004
i. Provident fund and gratuity benefits
Retirement benefits to employees comprise contributions to provident fund and gratuity.
Provident fund contributions are charged to the Profit and Loss Account. The Company’s
contribution to employees gratuity fund Scheme of Life Insurance Corporation (LIC) is
charged to profit and loss account. Further, provision is made for the shortfall, if any, based
on actuarial valuation at the year end by an independent actuary. Effective from 31st March,
2006, the Company has discontinued the payment of contribution to gratuity fund scheme of
LIC.
ii. Leave Encashment
II. For the year ended March 31, 2007, 2008 and three months ended June 30, 2008
i.
In respect of retirement benefits in the form of provident fund, the contribution payable by
the Company for the year is charged to the profit and loss account for the year.
ii. Defined Benefit plan
177
The present value of defined benefit obligation and the related current service cost are
measured using the projected unit credit methods with actuarial valuation being carried out
at each balance sheet date. The defined benefit obligations are not funded.
Leave encashment:
date.
Gratuity
retirement, death or termination of employment of an amount based on the respective
employee’s salary and the term of employment with the Company.
The Company has changed the method of computing provision for gratuity and leave
encashment from the method prescribed under AS 15 (Employee Benefit) to AS 15 (Employee
Benefit) (revised 2005). Pursuant to the adoption, the transitional obligation of the Company
amounting to Rs 22.40 lacs has been adjusted against general reserve as provided in the AS.
(h)
(i)
Borrowing Cost:
j)
Taxes on Income:
benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with
timing difference, being the difference between taxable income that originate in one period and are
capable of reversal in one or more subsequent periods and measured using relevant enacted tax
rates. At the balance sheet date the company assesses unrealized deferred tax assets to the extent
they become reasonably certain or virtually certainty of realization, as the case may be.
(k)
Operating Lease:
(l)
Earning Per Share:
common shares outstanding during the year. Diluted earnings per share is computed and disclosed
using the weighted average number of common and dilutive common equivalent share outstanding
during the year except where the result would be anti dilutive.
(m) Employees Stock Option Scheme:
178
In respect of stock option granted pursuant to the Company’s Stock Options Scheme, the intrinsic
value of the option is treated as discount and accounted as employee compensation cost over the
vesting period.
(n) Impairment:
At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to
determine whether there is an indication that those assets have suffered impairment loss. If any
such indication exists, the recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net selling price and value in
use, determined by discounting the estimated future cash flows expected from the continuing use
of the asset to their present value.
(o)
Provisions, Contingent Liabilities and Contingent Assets:
B) Comparability
C.
SELECTED NOTES TO ACCOUNTS
1.
Background:
Dish TV India Limited is mainly in the business of providing Direct to Home (DTH) Satellite Television
Service since 2003 – 2004 and also provide Teleport Service. During the year 2006-07, the name of The
Company has been changed from ASC Enterprises Limited to Dish TV India Limited.
2.
Use of Estimates:
The preparation of the financial statements in accordance with the generally accepted accounting principles
requires the management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported
amount of revenue and expenses of the period. Actual results could differ from those estimates.
3.
3.1
Capital Structure:
(Rs. in lacs)
Share Capital
428,222,803 (428,222,803) Equity Shares of Re. 1 each fully paid
up
Total
3.2
Three Months
Period ended
June 30, 2008
Year ended
March 31, 2008
10,000.00
7,300.00
4,282.23
4,282.23
4,282.23
4,282.23
Reserve and Surplus:
(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Reserve and Surplus
179
Year ended
March 31, 2008
General Reserve
Total
4.
16,958.57
16,958.57
-
16,958.57
16,958.57
-
Going Concern:
The restated financial statements have been prepared assuming the Company will continue as a going
concern. The management believes that it is appropriate to prepare these financial statements on a
‘going concern’ basis, for the following reasons:
4.1
5.
The Company holds DTH license from Government of India for considerable long time.
4.2
The Company is the first to launch DTH services in India. This type of business necessitates long
gestation period to stand on its feet. Being first mover, the Company has incurred huge expenses
on awareness of the product, brand building on a pan India basis. The benefit of these expenses
will accrue in the future years.
4.3
The Promoters are fully seized of the matter and is of the view that going concern assumption
holds true and that the Company will be able to discharge its liabilities in the normal course of
business. The Company would be able to meet its fund requirement with the various funding
option including debts. Hence no adjustment is made on account of reclassification of assets and
liabilities for the going concern assumption.
The Scheme of Arrangement:
During the financial year ended 31st March, 2007, the Scheme of Arrangement (the Scheme) under
Section 391 to 394 read with Section 78, 100 and other applicable provisions of the Companies Act,
1956 between Zee Entertainment Enterprises Limited. (ZEEL) (formerly known as Zee Telefilms
Limited), Siti Cable Network Limited (SITI) and New Era Entertainment Network Limited. (NEENL)
and Dish TV India Limited (the Company) (formerly known as ASC Enterprises Limited) and their
respective shareholders have been sanctioned by the Hon’ble High Court of Judicature at Mumbai and
High Court of Judicature at New Delhi vide their respective order dated 12th January, 2007 and 18th
December, 2006 and a copy of these orders have been filed with the respective Registrar of Companies
on 17th January, 2007 and 19th January, 2007 respectively. The Scheme has been given effect in
financial statements for the year ended 31st March 2007 except actual allotment and reorganization of
share capital, which has taken place in the financial year ended 31st March, 2008.
5.1
Pursuant to the Scheme, Direct Consumer Services undertaking (DCS) of ZEEL including
investment made by ZEEL in SITI and the entire business and whole of the undertaking of the
transferor Companies i.e. SITI and NEENL have been transferred to and vested in the Company
on appointed date i.e.1st April, 2006 on going concern basis. The assets and the liabilities of
DCS undertaking of ZEEL at book value and of SITI and NEENL at fair value accounted on
Purchase Method as per ‘Accounting Standard- 14’ have been transferred to and vested in the
Company as under:
(Rs. in lacs)
DCS undertaking of
ZEEL
3,204.42
Particulars
Less: Depreciation
Investments
Current Assets,
Advances
Total Assets (A)
Loans
and
180
SITI
NEENL
757.24
265.17
475.67
2,728.75
757.24
265.17
-
3,293.48
-
193.64
10.00
-
14,197.14
5,000.00
6,900.00
-
1,057.76
4,248.97
17,119.53
10,118.48
11,414.14
Particulars
Loan Funds
DCS undertaking of
ZEEL
3,263.25
5.2
SITI
NEENL
10.70
71.00
0.20
14,353.63
11,244.95
3,263.45
14,364.33
11,315.95
13,856.08
(4,245.85)
98.19
Reorganization of Share Capital:5.2.1 The paid up equity share capital of the Company had been sub-divided on 25th September,
2006 by splitting 71,568,765 equity share of Rs. 10 each into 715,687,650 equity share
of Re. 1 each.
5.2.2 Pursuant to the Scheme following effect are given in the financial statements for the year
ended 31st March, 2007 considering the shareholding pattern of ZEEL on record date
i.e. 20th February, 2007:•
997,203,560 equity shares of Re 1 each fully paid up to be issued in the ratio of 23
equity shares of Re 1 each fully paid up of the Company for every 10 equity shares
of Re 1 each fully paid up of ZEEL.
•
Reduction of above equity share capital by way of cancellation of 3 equity shares of
Re. 1 each fully paid up for every 4 equity shares of Re. 1 each fully paid up
resulting in final issues of 249,300,890 equity shares of Re. 1 each fully paid up.
•
Pending actual action, the difference on allotment, cancellation, reduction and issue
of Share Capital as above has been taken to the “Share Capital Suspense”. The actual
action has been taken place during the year ended 31st March, 2008.
5.2.3 The Share capital of the Company Rs. 715,687,650 divided into 715,687,650 equity
shares of Re 1 each fully paid up had been reduced by cancellation of 3 equity shares of
Re 1 each fully paid up for every 4 equity shares of Re 1 each fully paid up. The resultant
Share Capital is Rs. 1,789.22 lacs. Pending actual reduction, Rs. 5,367.66 lacs has been
taken to ‘Share Capital Suspense’.
5.3
5.4
Pursuant to the Scheme, surplus Rs. 16,980.97 lacs in the Restructuring Account after carrying
out following adjustments as per the Scheme has been transferred to General Reserve Account.
5.3.1
The value of net assets of DCS undertaking of ZEEL as reduced by the face value of
equity shares to be issued amounting to Rs.11,363.07 lacs has been credited to
Restructuring Account as prescribed in the Scheme.
5.3.2
The value of net assets/ (liabilities) of SITI and NEENL amounting to (Rs. 4,439.48
lacs) and Rs. 93.20 lacs respectively, as reduced by the cancellation of the
investments amounting to Rs. 193.63 lacs and Rs. 5.00 lacs respectively has been
(debited)/credited to Restructuring Account as prescribed in the Scheme.
5.3.3
Balance in Securities Premium Account and Profit and Loss Account (Debit Balance)
amounting to Rs. 37,282.45 lacs and Rs. 32,685.93 lacs respectively has been
transferred to Restructuring Account.
5.3.4
Reduction in share capital Rs. 5,367.66 lacs has been transferred to Restructuring
Account.
Pursuant to demerger of DCS undertaking of ZEEL , SITI and NEENL became wholly owned
subsidiaries of the Company and hence upon the merger of the Subsidiaries with the Company,
entire equity share capital of these Companies stand automatically cancelled and hence there
was no issue and allotment of shares of the Company.
181
5.5
The transactions of NEENL, SITI and DCS business of ZEEL between the appointed date and
the effective date are deemed to be made on behalf of the Company. Accordingly, all assets,
liabilities, income and expenditure of the demerged undertakings for the said period are taken
over by the Company and given effect in those financial statements.
5.6
The assets, license and agreements etc. transferred pursuant to the Scheme of Arrangement are
in the process of registration/transfer in the name of the Company.
6. During the financial year ended 31st March, 2007, the Company acquired DTH Equipment Unit
Business (DEU) of Essel Agro Private Limited on a going concern basis vide agreement to transfer
DTH Equipment Unit (DEU) Business dated 31st December, 2006. Pursuant to the agreement
following assets and liabilities have been acquired and are included in these financial statements. The
goodwill arising on acquiring of DEU Business amounting to Rs. 4,511.78 lacs (including purchase
consideration Rs. 5.00 lacs) has been treated as intangible asset.
(Rs. in lacs)
Amounts
15,034.97
214.03
15,249.00
19,755.78
4,506.78
Particulars
Fixed Assets
Total Assets
Net Deficit
7. Taxes on Income:
7.1
In view of the losses incurred during all the years/period covered in Restated Summary
Statements and brought forward losses, provision for taxation is not required under the
provisions of Income Tax Act, 1961.
7.2
In accordance with the ‘Accounting Standard-22’ on “ Accounting for Taxes on Income “ issued
by The Institute of Chartered Accountant of India, applicable from period 1st April, 2001,
deferred tax assets and liability should be recognized for all timing difference in accordance
with the said standard. However, considering the present financial position and requirements of
the accounting standard regarding certainty/ virtual certainty, the same is not provided for. The
accumulated deferred tax assets (Net) of the company not taken in accounts based on
conservative policy of the company is as under:
(Rs. in lacs)
Particulars
Three Months
Period ended
June 30, 2008
Deferred Tax Assets
Depreciation
Disallowances under the Income
Tax Act
Total
Depreciation
Total
Deferred Tax Balance Assets (Net)
8
Year ended
March 31, 2008
Year ended
March 31, 2007
28,515.82
2,888.65
272.89
24,523.68
1,257.40
256.15
12,211.92
313.99
31,677.36
26,037.23
12,525.91
31,677.36
26,037.23
911.47
911.47
11,614.44
Capital Work in Progress:
Capital Work in Progress comprises of equipments [including customer premises equipment (CPE)],
capital goods in transit, capital advances and pre-operative project expenses (to be eventually allocated
to fixed assets on commencement of commercial operation). The CPE are subject to physical
verification and reconciliation.
9.
Others Disclosures:
182
9.1 Exceptional item expensed in the financial year ended 31st March, 2004 represents provision for
doubtful advance Rs. 12,084.30 lacs (including due from a subsidiary of shareholder Rs. 8277.08
lacs) relating to multi mission satellite system project. The approval of the Reserve Bank of India
is yet to be obtained.
9.2
Sharing of Expenses:
The expenses under various heads are net of expenses shared with subsidiaries and other related
parties as per arrangement.
9.3 As per advice received and in terms of DTH license agreement, the Company till March 31, 2008
provided license fee on revenue from DTH subscribers. However based on recent judgment
during August 2008 of Telecom Dispute Settlement & Appellate Tribunal in the case of one of the
DTH service provider, the Company, as an abundant precaution, has also provided license fee on
other revenue accruing from DTH license related activities for all the past years.
9.4 During the financial year ended March 31, 2005, the Company had granted rights to distribution,
marketing and aggregation (DTH Service) w.e.f. 1st April 2004 for a lump sum consideration of
Rs 410 lac per annum to New Era Entertainment Network Limited (NEENL) which has been
terminated on June 15, 2005. The Company has provided license fees payable to Pay & Accounts
Officer, Ministry of I & B, New Delhi on the revenue accounted by NEENL from these services.
9.5 As at the balance sheet date, the Company has following foreign currency payable and receivables
which are not hedged by a derivative instrument or otherwise:(Rs. In lacs)
June 30,
Particulars
Receivables
Payables
9.6
Year ended
March 31, 2008
2008
Value in
USD $
Value in
Euro
Equivalent to
INR Rs.
4.27
-
182.19
4.02
-
159.18
298.78
-
12,913.20
154.17
0.04
6,192.92
Value in
USD $
Value
in Euro
Equivalent
to INR Rs.
Employee Stock Option Plan –ESOP 2007
Board of Directors of the Company at their meeting held on June 28, 2007 and by the shareholders
of the Company by way of special resolution passed at their Annual General Meeting held on
August 03, 2007, to grant aggregating 4,282,228 options ( not exceeding 1% of the issued and
paid up equity share capital of the Company as on March 31, 2007), representing one share for
each option upon exercise by the employee of the Company at a exercise price determined by
the Board/remuneration committee. The Scheme covers grant of options to the specified permanent
eligible employees of the Company as well as of its subsidiaries and also to non-executive
directors of the Company including independent directors. Pursuant to the Scheme, the
Remuneration Committee during August 2007 and April 2008 has granted 3,073,050 options
and 184,500 options respectively to specified eligible employees of the Company at the market
price determined as per the SEBI Guidelines.
The options granted under the Scheme shall vest not less than one year and not more than five
years from the date of grant of options. Under the terms of the Scheme, 20% of the options will
vest in the employee every year equally. The Option grantee must exercise all vested options
within a period of four years from the date of vesting. Once the options vest as per the Scheme,
they would be exercisable by the Option Grantee at any time and the shares arising on exercise of
such options shall not be subject to any lock-in period.
Period ended
June 30, 2008
183
Year ended
March 31, 2008
Options Outstanding at beginning of period (Nos.)
Options Outstanding at end of the period (Nos.)
2,926,150
184,500
1,227,100
1,883,550
3,073,050
146,900
2,926,150
account for the accounting value. The Shareholders and Remuneration Committee in their
respective meeting, held on August 28, 2008 have approved re-pricing of stock options.
9.7 Previous year’s Figures have been regrouped wherever necessary.
9.8 Debit and Credit balances of parties including of subscribers, distributors and dealers’ are subject
to confirmation/ reconciliation and effect if any, will be considered on its determination.
10.
Contingent Liabilities Not Provided For:
10.1
(Rs. in lacs)
Particulars
Estimated amount of
contract remaining
to be executed on
capital account (Net
of advance)
Bank guarantees
given on behalf of
subsidiaries.
Guarantees given on
behalf of other
company.
Guarantees given by
bank on our behalf
(Above includes
guaranteed by a
related party)
Claim against the
Company not
acknowledged as
debt
Legal Cases against
the company.
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Year ended
March 31,
2007
Year ended
March 31,
2006
Year ended
March 31,
2005
Year ended
March 31,
2004
2,864.17
3,335.92
3,077.22
1,754..86
-
-
-
-
-
40.00
140.00
440.00
-
-
240.00
-
500.00
500.00
5,046.15
5,046.15
4,001.05
4,000.00
4,000.00
4,000.00
4,908.60
4,908.60
4,000.00
4,000.00
4,000.00
4,000.00
448.40
448.40
-
-
-
-
10.2. The Entertainment Tax Authorities, Noida has raised a demand of Rs. 404.60 Lacs on account
of entertainment tax for the period from November, 2003 to February, 2004. The Company has
filed petition against the demand, which is pending. Further, the authorities have intimated a
total demand of Rs. 920.20 lacs till 31st March, 2007.
10.3
Entertainment Tax demand Rs. 116.75 lacs (estimated on the basis of various notices issued
from time to time) raised by various entertainment tax authorities of Utrakhand state have been
challenged and the petition is pending before the High Court. The demand has been stayed by
the High Court. Notice for further period has been issued wherein the demand has not been
quantified.
184
10.4
The Company has given a guarantee for the performance of the term and conditions of satellite
capacity agreement between a subsidiary of the company namely Agrani Satellite Services
Limited and the vendor, which is strategically important for the business of the Company.
11. Operating Lease:
11.1
In respect of assets taken on operating lease:
The Company’s significant leasing arrangements are in respect of operating leases taken for
offices, residential premises, transponder etc. These leases are cancelable/ non-cancelable
operating lease agreements that are renewable on a periodic basis at the option of both the lessee
and the lessor. The initial tenure of the lease generally is for 11 months to 120 months. The
detail of assets taken on operating lease is as under:(Rs. in lacs)
Particulars
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Year ended
March 31,
2007
Year ended
March 31,
2006
Lease
rental
charges for the
1,443.31
4,364.37
4,034.24
3,688.07
period (net of
shared cost)
Not later than one
year
Later than one
year but not later
than five years
More than five
years
Year ended
March 31,
2005
Year ended
March 31,
2004
1,984.76
423.53
432.51
392.42
1,411.19
3,526.76
-
-
1,130.86
1,161.20
70.60
1,469.49
-
-
-
-
-
-
-
-
11.2. In respect to assets given on operating lease
The Company has leased out assets by way of operating lease. The gross book value of such
assets, its accumulated depreciation, depreciation and lease rental income for the period is as
given below:(Rs. in lacs)
Three Months Year ended Year ended Year ended Year ended Year ended
Period ended March 31,
March 31,
March 31,
March 31,
March 31,
June 30, 2008
2008
2007
2006
2005
2004
Lease Rental Income
2,141.23
6,728.87
2,731.55
35.10
Gross Value of the
76,526.34
69,117.47
47,219.24
4,956.51
190.05
Assets
Accumulated
17,156.83
4,600.02
139.11
19.65
21,011.17
Depreciation
Depreciation for the
3,854.34
12,556.81
4,460.91
119.46
19.65
period
Future Lease Rental Receivable (Under non-cancelable lease)
Not later than one
8,229.09
7,371.79
4,556.00
231.12
year
Later than one year
but not later than
20,102.41
19,639.27
14,475.65
4,382.54
five years
More than five Year
Particulars
12. Auditors qualifications and Remarks:
12.1
12.1.1 The auditors have qualified the report for the financial year ended 31st March, 2004 and
2005 for non recoverable advances aggregating to Rs. 12,284.30 lacs included in other
185
advances due from foreign companies as a part of the project taken over. Accordingly,
adjustments are made to the financial statement, as restated for the year ended 31st
March, 2004 to account for the loss of Rs. 12084.30 lacs on such advance and balance
Rs. 200.00 lacs recovered.
12.1.2 The auditors have qualified the report for the financial year ended 31st March 2004,
2005 and 2006 regarding carrying value of investment in subsidiaries. The carrying value
of investment in subsidiaries as at 31st March, 2006 is aggregating to Rs.10,687.15 lacs.
Accordingly, adjustments for Rs. 1,247.05 lacs are made to the statement of financial
statement, as restated for the year ended 31st March, 2004 to account for the loss on
permanent diminution in the value of investment. Balance Rs. 9,440.10 lacs is
considered good and recoverable based on the subsequent event for the project under
implementation undertaken by the subsidiary and also in view of long term involvement
and relation with the subsidiary.
12.2 Other audit qualification / remarks, which do not require any corrective adjustment in the
financial information are as follows:
12.2.1 The auditors have qualified the report for the financial year ended 31st March 2004,
2005 and 2006 regarding recoverability of loans and advances to subsidiaries and
other companies. Loans and advances outstanding (due from subsidiaries) as at 2006
is aggregating to Rs. 3,275.34 lacs. The said loans and advance is considered good
and recoverable based on the subsequent event for the project under implementation
by the subsidiary and also in view of long term involvement and relation with the
subsidiary.
12.2.2 The auditors have qualified the report for the financial year ended 31st March, 2004,
2005 and 2006, that the Company has given interest free loans given to certain
companies, which are not in accordance with provision of sub section (3) of section
372 A of the Companies Act, 1956.
12.2.3 The auditors have qualified the report for the financial year ended 31st March, 2004
and 2005 for not providing exchange difference loss of Rs 1,029.05 and Rs. 1072.79
lacs respectively as required by AS -11 on realignment of foreign exchange advances
Rs. 12,284.30 lacs. The Company has not adjusted the same in restated account as the
loss on such advance in foreign exchange is fully provided in the accounts (Refer
Note 12.1.1).
12.2.4 The auditors have qualified the report for the financial year ended 31st March, 2007,
for the managerial remuneration amounting to Rs. 12.94 lacs paid to managing
director pending approval of Central Government. The Company has not adjusted the
restated account as subsequently approved by the Central Government.
12.2.5 The auditors in their audit report for the financial year ended 31 March 2007, has
drawn reference to note on preparing the financial statements on going concern basis.
12.2.6 Auditors comment under MAOCARO 1988/ CARO 2003
Fixed Assets:• In the financial year ended 31st March, 2006 and 2007, auditors have reported
that there is a phased program of Physical verification of fixed assets except
for consumer premises equipments installed at the customers premises, which
is reasonable having regard to the size of the Company and nature of its assets.
Pursuant to the program, the physical verification of certain assets was carried
out during the period. The reconciliation of the fixed assets physically verified
with the books is in progress and differences, if any, will be accounted on its
determination.
186
• In the financial year ended 31st March, 2008, auditors have reported that the
fixed assets, except consumer premises equipments installed at the customer
premises have been physically verified by the management as per the phased
program of verification and no discrepancies were noticed on such
verification.
Interest free loan granted to parties covered u/s 301 of the Companies Act, 1956:In the financial year ended 31st March, 2005 and 2006, the auditors have
reported, that the Company has granted interest free unsecured loans to
companies covered in the register maintained under section 301 of the Act. The
maximum amount involved during the financial year ended 31st March, 2006
and 2005 was Rs. 50.73 crores and Rs. 69.12 crores respectively and outstanding
balance as at 31st March 2006 and 2005 was Rs. Nil and Rs. 50.73 crores
respectively. Further in financial year ended 31st March, 2007 auditor has
reported that loans given to parties covered in the register maintained u/s 301 of
the Companies Act, 1956, aggregating to Rs. 12.40 Crores are provided at the
interest rate prejudicial to interest to the Company.
Internal Audit:In the financial year ended 31st March, 2007, auditors have reported that the
Company has an internal audit system commensurate with its size and nature of
its business. However, the same needs to be strengthened as regard scope and
periodicity.
Statutory Dues:• In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008
auditors have reported that the Company is regular in depositing undisputed
statutory dues including, investor education and protection fund, employees
state insurance, income tax, sales tax, wealth tax, custom duty, excise duty,
cess, provident fund and other statutory dues, wherever applicable, with
appropriate authorities except delay in few cases.
• In the financial year ended 31st March 2007 and 2008. The auditors have
reported that, there is no dues of Income Tax, Sales Tax, Custom Duty, Wealth
Tax, Excise Duty and Cess which have not been deposited on account of any
dispute except the following:
(Rs. In lacs)
Name of Statue
Utter Pradesh
Entertainment &
Utter Pradesh
Entertainment &
(As Applicable to
Uttarakhand)
Period to which
Nature of dues
pertain
Forum where
dispute is
pending
Amount
stand as at
31st March,
2008
Amount
stand as at
31st March,
2008
Entertainment
Tax
2003-2004 to
2006-2007
Allahabad High
Court
920.20
920.20
Entertainment
Tax
2003-2004 to
2006-2007
High Court of
Uttarakhand
88.36
-
Accumulated losses:In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008, auditors
have reported that the accumulated losses (without considering audit qualifications)
are more than fifty percent of its net worth. Further, the Company has incurred cash
losses in all the above financial years.
In the financial year ended 31st March, 2004, 2005 and 2008 auditors have reported,
default in repayment to financial institutions / banks as under:-
187
Rs. in lacs)
Particulars
During the year ended 31st March 2004
Banks
Banks
Axis Banks
Axis Banks
Axis Banks
IDBI Banks
Principal
Interest
Period of default
50.00
-
1.56
45.06
1-3 Month
1-2 Month
1,000.00
126.53
1-30 Days
3,750.00
500.00
3,250.00
-
65.49
31 days
16 days
28 days
23 days
Fund utilization:In the financial year ended 31st March, 2004, 2007 and 2008 auditors have reported
that the company has used short term funds amounting to Rs. 2,479.50 lacs, Rs.
51,626.07 lacs and 25,300.93 lacs respectively for long term investments.
12.3
12.3.1 For the financial year ended 31st March, 2004, the Company did not form an audit
committee of its Board of Directors as required under section 292A of the Companies
Act, 1956.
12.3.2 For the financial year ended 31st March, 2004 and 2005, the Company did not have a
1956.
D).
1.
The Company adopted the revised ‘Accounting Standard 15(R)’ on employees Benefits
effective from 1 April, 2006. Pursuant to the adoption, the incremental liability at the
beginning of the year in respect to Gratuity and Leave Encashment has been adjusted against
general reserve as provided in the Standard and accordingly no adjustment is made in previous
years.
2.
Below mentioned is the summary of results of restatement made in the audited accounts for
the respective years and its impact on the profit or loss of the Company:
Rs. In lacs)
Particulars
Prior Period Items
Diminution in value of
investments
items)
Sales/VAT Demand
Licenses fees
Reference to
Note given in
Para D
3(a)
-
106.63
48.87
9.10
-
3(b)
-
- (1,247.05)
-
-
1,247.05
3 (c)
-
-
- (12,084.30)
-
12,084.30
3(d)
3(e)
3(f)
(756.73)
(220.90)
127.20
65.47
(407.08)
134.80
381.09
54.64
(756.73)
(258.31)
(544.91) (11,969.96)
(263.18)
13,767.09
Total
3.
For the
For the
For the
For the For the year For the year
three
year
year
year
ended
ended
months
ended
ended
ended
March 31,
March 31,
period June March 31, March 31, March 31,
2005
2004
30, 2008
2008
2007
2006
(164.61)
OTHER ADJUSTMENTS
188
220.90
374.61
During the three months ended 30 June, 2008 and financial year ended 31 March, 2006, 2007 and
2008 certain items of income/expenses have been identified as prior period items. For the purpose
of this statement, such prior period items have been appropriately adjusted in the respective years.
b) DIMINUTION IN VALUE OF INVESTMENTS
During the financial year ended 31 March 2006, the Company has provided for diminution in the
value of investment in the subsidiary. The auditors had qualified their report for the financial year
ended 31 March 2004 and 2005 hence the amount has been appropriately adjusted in the financial
year ended 31 March 2004.
c)
PROVISION FOR DOUBTFUL ADVANCES
advances. The auditors had qualified their report for the financial year ended 31 March 2004 and
2005 hence the amount has been appropriately adjusted in the financial year ended 31 March 2004.
d) SALES TAX/VAT DEMAND
During the three months period ended 30th June 2008 and financial year ended 31 March, 2008 the
Company provided for Sales Tax/Vat demand raised. For the purpose of this statement, such
demands have been appropriately adjusted in the respective years.
e)
PRE-OPERATIVE EXPENSES
During the financial year ended 31 March, 2004 and earlier years the Company incurred certain
expenditure on promoting and implementing DTH project and C band Teleport project and also
incurred expenses on trial run. These expenses were treated as pre-operative expenses to be
allocated to fixed assets or treated otherwise on commencement of commercial operation.
However in the financial year ended 31 March, 2005, these expenses were charged off to profit
and loss. In the restated summary statements these expenses are appropriately adjusted in
respective years in which the same were originally incurred. The adjustments pertaining to
financial year ended on or before 31 March 2003 are adjusted in the opening balance in Profit &
Loss account as at 1st April 2003.
f) As per advice received and in terms of DTH license agreement, the license fee was being
provided on revenue from DTH subscribers. However based on recent judgment of Telecom
Dispute Settlement & Appellate Tribunal in the case of one of the DTH service provider , the
Company , as an abundant precaution, has also provided license fee on other revenue accruing
from DTH license related activities. The Additional license fee of Rs. 756.73 lacs is provided for
past years. According in the restated summary statements these expenses are appropriately
adjusted in respective year to which revenue pertains.
g) PROFIT AND LOSS ACCOUNT AS AT APRIL, 2003
(Rs. In lacs)
Reference to
Note No.
Particulars
Profit/(Loss) as per Audited Statement
March 31,
2003
(9,036.87)
Adjustment :
Pre-Operative Expenses
3(e)
4.
25.99
(9,062.86)
MATARIAL REGROUPING
189
a)
Upto the financial year ended 31 March 2004, interest received was shown under the head
Income but from the financial year ended 31 March 2005, the same is being shown under
the head financial charges as separate item and net balance (financial charges minus interest
received) is taken in main profit and loss account. However in the Restated Summary
Statement of Profit and Loss the interest income is shown under the head ‘Other Income’.
b)
During the financial year ended 31 March 2005 and 2006, license fee amortized was
grouped under the head ‘Operating Expenses’ but from the financial year ended 31 March
2007, the amortized amount is regrouped under the head “Depreciation/Amortization’. In
the Restated Summary Statement of Profit and Loss for the financial year ended 31 March
2005 and 2006 the amortized amount is regrouped and shown accordingly.
c)
In the financial statements for the year ended 31 March 2006, Rs. 200 lacs were shown as
investment under the head ‘Investments’. However in the financial statements for the year
ended 31 March 2007, the same has been regrouped under Other Advances. In the Restated
Summary Statement of Assets and Liabilities for the financial year ended 31 March 2006
the same is regrouped and disclosed accordingly.
d)
During the financial year ended 31 March 2004, teleport income was grouped under Other
Income. Based on regrouping of the income under Sales and Services during the financial
year ended 31 March 2005 and onward, in the Restated Summary Statement of Profit and
Loss the same is regrouped and disclosed accordingly.
e)
During the financial year ended 31 March 2007, Other DTH Revenue was grouped under
‘Other Income’. Accordingly in the Restated Summary Statement of Profit and Loss the
same is regrouped as Other DTH Revenue.
f)
During the financial year ended 31 March 2006, credit balance of a loan written off was
shown as Exceptional Item which in the Restated Summary Statement of Profit and Loss
has been regrouped under the head “Other Income’.
g)
During the financial year ended March 31, 2008 income from Bandwidth charges was
grouped under ‘Other Income’. However in the financial statement for the three month
period ended 30 June 2008, the same is regrouped under ‘Sales and Services’ as separate
item. Hence in the Restated Summary Statement of Profit and Loss the same is regrouped
and disclosed accordingly.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
190
Annexure-5
Standalone Capitalisation Statement of the Company as at June 30, 2008
(Rs. In lacs)
Pre issue as at
Particulars
June 30, 2008
Short Term Debts
Long Term Debts
Total Debts
Shareholder's Fund
Share Capital
Reserves & Surplus
(Net of Profit & Loss Account Debit Balance)
(Excluding Revaluation Reserve)
Miscellaneous Expenditure
Total Shareholder's Funds/Net Worth
Long Term Debt/Equity Ratio
45,806.08
5,537.32
51,343.40
As adjusted for issue
(Immediately after the
issue)*
15,806.08 @
5,537.32
21,343.40
4,282.23
(63,217.30)
9,463.73 *
45,594.11 *
(58,935.07)
Refer Note-3 below
55,057.84 *
10.06%
Note:
1.
2.
Short term debts is considered as debts having original repayment term not exceeding 12 months
Long term debts is considered as debts other than short-term debt as defined above.
3.
Since networth is negative, hence ratio not calculated
4.
The figures disclosed above are based on the restated summary financial statements of the Company as
at June 30, 2008
5.
The Capitalization Statement has been prepared based on the Management’s assumption that the
proposed Rights issue of equity shares to the shareholders of the Company consisting of 518,149,592
Equity shares of Re. 1 each to be issued at the rate of Rs. 22/- per share will be subscribed fully.
6.
@ After adjusting repayment of loan Rs. 30,000 lacs out of application money proceeds from
proposed Rights issue.
7.
* Considering full issue price of Rs.22/- per equity share. However the amount is payable in
installment as under:-
Due on
Alongwith Application
First Call (any time after three months but within nine months from the
date of allotment)
Per equity share
(Rs.)
6
Against Share Capital
(Rs. In lacs)
Against Securities
Premium (Rs. In lacs)
8
2,590.75
1,295.38
28,498.23
40,156.59
Second and Final Call (any time after nine months but within eighteen
months from the date of allotment)
8
1,295.37
40,156.59
Total
22
5,181.50
108,811.41
8.
191
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
192
Annexure-6
Standalone Details of Secured & Unsecured Loans of the Company
(Rs in Lacs)
S.No.
A.
1
2
3
4
5
Particulars
Secured Loans
Hire Purchase
Finance/Vehicle LoanFrom Various Banks
Secured
against
hypothecation of vehicles,
charge not registered under
Section
125
of
the
Companies Act, 1956. Rate
of interest varies from
4.91% to 11.83%. Loan
repayable over next 05
years is Rs 21.73 Lacs, Rs
10.53 Lacs, Rs 6.37 Lacs,
Rs 1.6 Lacs & Rs 1.79
Lacs.
Term Loan from Axis
Bank
Secured by first pari-pasu
charge on all present and
future movable fixed assets
relating to DTH project and
pledge of shares owned by
promoter/ group companies.
Interest payable @ 11.50%
p.a.
Term Loan from ING
Vyasya Bank
Secured by second charge
on entire moveable fixed
assets of the company and
pledge of shares owned by
and guaranteed by related
parties. Interest payable @
6.50% p.a.
Term Loan from Axis
Bank
hypothecation charge on all
present and future current
assets including goods,
stocks and all other such
articles and book debts,
receivables,
investments,
cash flow and corporate
guarantee
of
related
party.Interest
payable
BPLR - 3%. Applicable rate
is 12.00% p.a.
Bridge Loan from IDBI
Bank
Balance as
at Jun 30,
2008
Balance as
at Mar 31,
2008
Balance as
at Mar 31,
2007
Balance
as at Mar
31, 2006
42.02
32.15
71.82
-
-
-
-
-
-
-
-
-
6,047.81
193
Balance as
at Mar 31,
2005
Balance as at
Mar 31, 2004
30.15
8.35
13.47
-
200.00
200.00
-
1,000.00
7,500.00
-
6,047.81
-
-
-
-
-
-
S.No.
6
7
Particulars
Secured by hypothecation
of all movable properties
including movable Plant
and machinery, machinery
spares,
tools
and
accessories, book debts etc.,
present and future, and
corporate guarantee of
related party and pledge of
certain shares held by the
promoters in the Company.
Interest payable @ 12.75%
p.a.
Cash credit from Axis
Bank
hypothecation charge on
moveable fixed assets of the
company and pledge of
shares by related parties.
Short
term,
normally
repayable in one year &
present rate of interest is
13.25% p.a.
Balance as
at Jun 30,
2008
Balance as
at Mar 31,
2008
Balance as
at Mar 31,
2007
758.99
758.72
-
-
801.01
Balance
as at Mar
31, 2006
Balance as
at Mar 31,
2005
Balance as at
Mar 31, 2004
-
757.26
750.70
180.78
70.07
-
5.35
6,838.68
14,446.96
780.85
1,394.48
213.47
-
-
2,500.00
-
-
-
8,000.00
8,000.00
-
-
5,495.30
3,517.14
-
-
-
Total Secured Loans
B.
1
2
3
Unsecured Loans
Chartered Bank
Backed
by
corporate
gurantee provided by a
related party. Short term,
repayable in one year &
rate of interest payable @
11% p.a.
Chartered Bank
Ranking pari passu in all
respect with all other,
present and future, senior,
unsecured
and
unsubordinated obligation
of the Company. A reserve
account is maintained to
provide cover for three
months
interest
on
outstanding loan. Related
party of the Company is
required to provide negative
pledge of shares of the
Company held by them.
Short Term, repayable in 9
months and interest @
payable 11.50%.
From Banks- ICICI Bank
194
-
-
-
-
S.No.
4
a)
b)
c)
d)
e)
f)
g)
h)
5
Particulars
Balance as
at Jun 30,
2008
Balance as
at Mar 31,
2008
Balance as
at Mar 31,
2007
Balance
as at Mar
31, 2006
Balance as
at Mar 31,
2005
Balance as at
Mar 31, 2004
Foreign
Currency
arrangement of buyer credit
from bank for capital
expenditure
is
against
guarantee of a related party.
See note 1 below for terms
and condition.
From OthersZee Entertainment
Enterprises Limited
demand
and
interest
payable @ 12% p.a.
Rupee Finance &
Management Pvt. Limited
demand
and
interest
payable @ 12.50% p.a.
Suncity Projects Limited
Kenlott Gamming
Solutions Pvt Limited
India Securities Limited
Pan India Network
Infravest Pvt Limited
Rajaram Finance &
Investment Co (India) Ltd
Private Limited
demand
and
interest
payable @ 12% p.a.
3,971.56
2,770.00
-
616.31
-
-
-
-
-
27.00
27.00
-
-
-
50.00
50.00
-
10.00
-
500.00
-
27.00
27.00
19.00
19.00
27.00
27.00
-
-
-
-
-
-
-
-
-
-
-
32,421.44
30,000.00
10.78
1,509.69
17.15
50,542.39
45,823.83
51,343.40
52,662.51
-
-
-
-
1,700.00
-
-
10.78
10.78
10.78
3,063.15
56.78
97.78
17,510.11
837.63
1,492.26
-
Total Unsecured Loans
1,787.78
Total Loans (A+B)
2,001.25
Note:
1)
Terms and conditions relating to unsecured loan from ICICI Bank Rs 5495.30 lacs
23.45
23.45
20.60
20.10
10.07
Interest Rate (%)
Libor+1.15
Libor +1.15
Libor +1.15
Libor +1.15
Libor +1.15
195
Effective Rate (%)
3.5163
3.5163
3.5163
3.5163
4.0363
Repayable
19-Jan-11
25-Jan-11
30-Jan-11
28-Dec-10
18-Feb-11
6.03
10.05
6.70
6.70
127.15
Interest Rate (%)
Libor +1.25
Libor +1.15
Libor +1.15
Libor +1.15
Effective Rate (%)
4.1363
4.3038
4.3038
4.3038
Repayable
25-Apr-11
01-Mar-11
15-Feb-11
07-Feb-11
2)
Repayment Schedule given above is applicable only for Loans outstanding as on June 30, 2008.
3)
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
196
Annexure-7
Standalone Details of the Investments of the Company
(Rs. In lacs)
Particulars
As at
March 31,
March 31,
2007
2006
June 30,
2008
March 31,
2008
March 31,
2005
March 31,
2004
1,247.05
1,247.05
1,247.05
1,247.05
2,445.20
2,445.20
9,440.10
9,440.10
9,440.10
9,440.10
9,440.10
9,440.10
5.00
5.00
5.00
-
-
-
-
-
-
-
1.34
1.34
-
-
-
-
4.94
4.94
-
-
-
-
169.96
169.96
-
-
-
-
183.70
183.70
-
-
-
-
145.18
145.18
-
-
-
-
117.77
117.77
-
-
-
-
2.47
2.47
-
-
-
-
-
7.50
10,692.15
10,692.15
10,692.15
10,687.15
12,510.66
12,518.16
1,247.05
1,247.05
1,247.05
1,247.05
1,247.05
1,247.05
9,445.10
10,692.15
10,692.15
-
9,445.10
10,692.15
10,692.15
-
9,445.10
10,692.15
10,692.15
-
9,440.10
10,687.15
10,687.15
-
11,263.61
12,510.66
12,510.66
-
11,271.11
12,510.66
12,518.16
-
Long Term (At Cost) - Unquoted
In Subsidiaries- Trade
Equity Shares of Agrani Convergence
Limited
Equity Shares of Agrani Satellite Services
Limited
Equity Shares of Integarted Subscriber
Managment Services Limited
Equity Shares of Agrani Satellite
Communication (Gib) Limited
Equity Shares of Agrani Wireless Services
Limited
Equity Shares of Quickcalls Private
Limited
Equity Shares of Smartalk Private Limited
Equity Shares of Bhilwara Telenet Services
Private Limited
Equity Shares of Procall Private Limited
Equity Shares of Essel Telecom Holdings
Limited
In Others - Non Trade
IDBI Regular Income Bonds
Less: Provision for diminution in value of
investments
Total
Investments in Related Parties
Aggregate Cost-Unquoted
-Quoted
Note:
The above statement should be read with the Significant Accounting Policies and Selected Notes to Accounts
for Restated Summary Statements, as appearing in Annexure '4' to this Report.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
197
Annexure-8
Standalone Restated summary statement of Sundry Debtors of the Company
(Rs. In lacs)
Particulars
As at
March
March
31, 2007 31, 2006
181.47
81.26
4,147.85
672.04
4,329.32
753.30
422.88
-
Less: Provision for Doubtful Debts
June 30,
2008
3,038.04
971.75
4,009.79
244.71
March 31,
2008
3,150.15
938.26
4,088.41
244.71
Total Sundry Debtors
3,765.08
3,607.82
3,843.70
3632.94
3,906.44
3,645.08
includes:
Due from Promoter
Total
2837.15
2837.15
2658.78
2658.78
2752.84
2752.84
Debts for period exceeding six months
Others
March
31, 2005
233.76
233.76
-
March
31, 2004
460.36
460.36
-
753.30
529.65
233.76
233.76
460.36
460.36
-
-
-
Note:
1.
Detail of related party transactions and balances have been disclosed in ‘Annexure – 13’
2.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
198
Annexure-9
Standalone Restated Summary of Loans and Advances of the Company
(Rs. In lacs)
Particulars
As at
March 31,
March 31,
2007
2006
March 31,
2005
March 31,
2004
-
1,521.25
1,533.99
8,431.67
7,795.82
6,253.63
7,112.63
6,333.53
3,341.70
3,275.34
4,478.64
4,258.70
-
-
-
300.00
-
-
22,730.66
20,894.04
19,014.67
15,335.78
12,268.01
12,189.48
597.70
43,018.14
564.18
40,701.94
166.45
30,954.49
57.38
26,764.32
108.26
24,629.79
156.41
25,251.21
12,260.43
12,260.44
12,260.43
12,084.30
12,084.30
12,084.30
30,757.71
28,441.50
18,694.06
14,680.02
12,545.49
13,166.91
35,783.71
35,649.54
27,283.25
25,286.87
24,314.40
24,953.72
Amount due from related
parties includes:
Due from Promoter
3.02
3.32
1337.35
28.46
982.42
212.96
202.70
Total
3.02
3.32
1337.35
28.46
1195.38
202.70
Loans and Advances to
Loan to Employees and Others
Advance against Share
Application Money to Subsidiary
Companies
Advance against Share
Application Money to Others
Advances recoverable in cash or
in kind for value to be received
and/or to be adjusted
Deposits
Less :Provision for Doubtful
Advances
TOTAL
(Gross)
June 30,
2008
March 31,
2008
4,739.37
3,955.12
-
8,960.27
8,955.07
5,990.14
Note:
1.
2.
Accounts for Restated Summary Statements, as appearing In Annexure '4' to this Report.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
199
Annexure-10
Standalone Restated Summary Statement of Sales & Services of the Company
(Rs. In lacs)
SN.
1
Particulars
Income from DTH
Subscription Income
Lease Rentals
Bandwidth Charges
For the three
months period
ended June
30, 2008
For the
year
ended
March
31, 2008
For the
year
ended
March
31, 2007
For the
year
ended
March 31,
2006
For the
year
ended
March
31, 2005
For the
year
ended
March
31, 2004
13,321.24
1,939.01
260.69
32,884.20
6,036.15
53.97
12,190.09
2,180.71
-
1,953.05
21.77
-
-
186.15
-
-
-
-
25.00
110.00
-
-
-
51.06
77.39
300.00
-
15,520.94
38,974.32
14,421.86
2,077.21
410.00
186.15
-
-
3,592.15
-
-
-
318.83
1,121.75
1,048.88
492.68
71.52
16.50
-
-
-
-
-
105.00
606.14
1,158.32
69.16
574.15
482.54
-
-
73.96
-
-
-
747.29
16,445.91
32,6.95
41,328.35
1461.62
19,132.05
4675.99
3,144.04
1188.72
964.06
961.96
1,054.94
-
-
-
-
-
-
-
Royalty
Other DTH Revenue
2
3
4
5
5A
5B
Sub-Total
Placement and Active
Services
Teleport Services
Consultancy Services
Sales(net of Returns)
Traded Normally
Not Normally Traded
Total
includes:
From Promoter
From Promoter
Companies
From Promoter Group
-
-
-
-
-
-
159.15
550.90
2826.21
130.00
42.00
-
Total
159.15
550.90
2826.21
130.00
42.00
-
Nature
Recurring
Recurring
Recurring
NonRecurring
NonRecurring
NonRecurring
Recurring
NonRecurring
Recurring
NonRecurring
Note:
1.
2.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
200
Annexure-11
Standalone Restated Summary Statement of Other Income of the Company
(Rs. In lacs)
SN.
1
2
3
4
5
Particulars
Interest Received
(Gross)
Exchange Gain
Realised
Balance Written off
Profit on Redemption
of units of Mutual
Funds
Miscellaneous Income
Total
For the
three
months
period ended
June 30,
2008
For the
year
ended
March
31, 2008
For the
year
ended
March
31, 2007
For the
year
ended
March
31, 2006
For the
year
ended
March
31, 2005
For the
year
ended
March
31, 2004
190.85
646.68
575.24
27.46
269.54
21.83
-
208.68
251.63
-
4.02
3.63
15.07
1.33
37.47
50.00
-
-
-
24.87
-
-
-
-
3.16
8.46
12.34
-
11.11
-
209.08
178.65
890.02
592.90
876.68
528.19
77.46
3.81
284.67
259.66
25.46
-
-
-
-
-
-
-
-
-
-
-
248.55
-
-
4.27
4.27
-
-
11.11
259.66
-
includes:
From Promoter
From Promoter
Companies
From Promoter Group
Total
Nature
Recurring
NonRecurring
NonRecurring
NonRecurring
NonRecurring
Note:
1.
2.
(Jawahar Lal Goel)
Managing Director
(B.D. Narang)
Director
Place: Noida
201
Standalone Statement of Accounting Ratios of the Company
Annexure-12
(Rs. In lacs)
S.No.
1
2
3
4
5
6
Particulars
For the three
months ended
June 30, 2008
For the Year For the Year For the Year For the Year For the Year
ended March
ended
ended
ended
ended
31, 2008
March 31,
March 31,
March 31,
March 31,
2007
2006
2005
2004
Net Profit/(Loss) before
exceptional items but
after Tax
(12,910.53)
(41,062.15)
(24,643.24)
(8,813.30)
(2,525.22)
(1,760.20)
Net Profit/(Loss) after
exceptional items and
Tax
(12,910.53)
(41,062.15)
(24,643.24)
(8,813.30)
(2,525.22)
(13,844.50)
Number of Equity
Shares outstanding at
the end of the
year/period
428,222,803
428,222,803
428,222,803
71,568,765
71,568,765
71,568,765
1
1
1
10
10
10
428,222,803
428,222,803
428,222,803 715,687,650 715,687,650 715,687,650
428,222,803
428,222,803
428,222,803 715,687,650 715,687,650 715,687,650
4,282.23
4,282.23
4,282.23
7,156.88
7,156.88
7,156.88
Paid up Value of each
equity share (Rs.) (Refer
Note 3 below)
Number of Equity
Shares outstanding at
the end of the
year/period
(after split of share from
Rs 10 to Re.1 per share)
Weighted average
number of Equity
Shares of Re. 1 each
outstanding during the
year/period after
considering split of
share (Refer Note 5
below) (for Basic as
well as Diluted earning
per share) (also Refer
Note- 3 below)
7
Total Paid-up Capital
8
Reserves & surplus (Net
of debit balance in
Profit & Loss
Account)(excluding
(63,217.30)
(50,306.77)
(9,244.62)
3,036.57
11,849.87
14,375.09
(to the extent not written
off or adjusted)
-
-
-
-
-
-
(58,935.07)
(46,024.55)
(4,962.39)
10,193.45
19,006.75
2,1531.97
9
10
Net Worth (7+8-9)
202
S.No.
Particulars
For the three
months ended
June 30, 2008
For the Year For the Year For the Year For the Year For the Year
ended March
ended
ended
ended
ended
31, 2008
March 31,
March 31,
March 31,
March 31,
2007
2006
2005
2004
Accounting Ratios
a)
b)
c)
Earning per share
Basic & Diluted before
exceptional items (1) /
(6)
(3.01)
(9.59)
(5.75)
(1.23)
(0.35)
(0.25)
Basic & Diluted after
exceptional items (2) /
(6)
(3.01)
(9.59)
(5.75)
(1.23)
(0.35)
(1.93)
Return on Net Worth %
Before Exceptional Item Refer Note – 2
(1) / (10)
below
ReferNote - 2
below
Refer Note –
2 below
(86.46)
(13.29)
(8.17)
After Exceptional Item
(2) / (10)
Refer Note -2 Refer Note -2
below
below
(86.46)
(13.29)
(64.30)
1.42
2.66
3.01
Net Asset Value Per
Share (10) / (5)
[Calculated on restated
value of Re. 1 per share
(Refer Note 5 ) ]
Refer Note - 2
below
(13.76)
(10.75)
203
(1.16)
(Dish TV India Limited (Standalone)
Note:
1) The ratios have been computed as under:
Basic & Diluted earnings per
Shareholders
Net profit/(loss) after tax, as restated, attributable to equity share (Rs.)
_____________________________________________________
Weighted average number of equity shares outstanding during the year/period
Return on Net Worth (%)
Net Profit /(Loss) after tax, as restated
__________________________________________
Net asset value per share (Rs.)
_____________________________________________________
Number of equity shares outstanding at the end of the year/period
2) Return on Net Worth for the year & period ended March 31, 2007, 2008 and June 30, 2008 are not given as
net worth as on the date as well as profits for the year/period are negative.
3) Equity Share Capital as at March 31, 2007 was after giving effect to the Scheme but pending reorganization
and actual allotments of share capital (Refer Note 5 to Annexure 4)
4)
Potential conversion of the stock options granted during the financial year ended March 31, 2008 and
period ended June 30, 2008 is anti-dilutive and accordingly has not been considered in the calculation of
diluted earning per share.
5) As per requirement of AS-20, issued by the ICAI, the corresponding figures relating to all previous
reporting periods have been restated to give the effect of split of equity share from Rs. 10 each to Re. 1 each
(pursuant to the Scheme of Arrangement)
6) During the financial year ended 31 March 2007, pursuant to the Scheme of Arrangement, the Company
beside split of equity share from Rs 10 to Re 1 each, also re-organized its share capital and allotted shares.
For the purpose of calculation of earning per share for financial year ended 31 March 2006 and earlier
years, the effect of such reorganization has not been considered.
7) Earning per share is calculated as per compliance of Accounting Standard 20- ‘Earning Per Share.’
8) The above statement should be read with the Significant Accounting Policies and selected notes to accounts
for restated Summary Statements, as appearing in Annexure 4 to this report.
For Dish TV India Limited
(Jawahar Lal Goel)
Managing Director
(B D Narang)
Director
Place: Noida
Date : November 12, 2008
204
Standalone Restated Summary Statement of Related Party Transactions
Annexure-13
Name of Subsidiary
List of Parties where control exists.
31 Mar '07 31 Mar '06
30 June '08 31 Mar '08
(Holding reduced to 51% on March 31, 2006)
51.00
51.00
51.00
51.00
100.00
100.00
100.00
100.00
Agrani Wireless Services Limited*@
Agrani Satellite Communication Enterprises
(Gibraltor) Limited *
Ltd (Formerly known as Agrani Telecom
Limited)#
100.00
100.00
100.00
Bhilwara Telenet Services Private Limited*
Agrani Telecom Limited. (Formerly known as
Essel Telecom Holding Limited)*
# Ceased to be subsidiary on 28 August '2003 and again became subsidiary on 1 April '2006 on transfer of
investment to the parent Company under the Scheme of Arrangement.
205
31 Mar '05
100.00
100.00
98.80
100.00
50.96
50.96
50.96
99.37
98.01
Period ended
30th June, 2008
Communication
Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Ayepee Lamitubes
Limited, Agrani
Satellite
Communication
Brio Academic,
Churu Trading
Company Private
Limited,
Diligent Media
Dakshin Media
Gamming Solutions
Corporate Resources
Private Limited,
Essel Agro Private Ltd,
Essel Shyam
Technology Limited,
Limited, ITZ Cash Card
Limited,
Company Limited,
Limited,
Pan India Network
Infravest Private
Limited,
Rama Associates
Limited,
Rupee Finance and
Management Private
Limited, Suncity
Projects Private
Limited,
Limited,
Zee Turner Limited,
Zee News Limited,
Zee Aakash News
Private Limited,
Zee Entertainment
Enterprises Limited
Year ended
31st March, 2008
Smart Talk Private
Limited,
Essel Corporate
Services Private
Limited,
Essel Agro Private Ltd ,
Limited (merged with
Pan India Network
Infravest Private
Limited),
Zee Entertainment
Pan India Network
Infravest Private
Limited,
Pan India Paryatan
Limited, Ayepee
Lamitubes Limited,
Procall Private Limited,
Limited,
Communication
Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited (UK),
Zee News Limited,
Rupee Finance and
Management Private
Limited,
Limited,
Dakshin Media
Gamming Solutions
Private Limited,
Rama Associates
Limited,
Zee Turner Limited,
Zee Interactive
Learning Systems
Limited (now known as
ETC Networks
Limited),
Kenlott Gamming
Solutions Private
Limited,
Brio Academic,
Zee Foundation,
Zee Akash News
Private Limited,
Private Limited,
Zee Sports Limited,
Bhilwara Telenet
Year ended
31st March, 2007
Smart Talk Private
Limited,
Essel Corporate
Services Private
Limited,
Essel Agro Private
Ltd,
Cyquator
Technologies
Limited,
Zee Entertainment
Pan India Network
Infravest Private
Limited,
Pan India Paryatan
Limited,
Ayepee Lamitubes
Limited,
Procall Private
Limited,
Suncity Projects
Private Limited,
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited,
Zee News Limited,
Ganjam Trading Co.
Private Ltd,
Rupee Finance &
Management Private
Limited,
ITZ Cash Card
Limited,
Wire and Wireless
India Limited,
Dakshin Media
Gamming Solutions
Private Limited,
Rama Associates
Limited,
Zee Turner Limited,
Zee Interactive
Learning Systems
Limited,
Kenlott Gamming
Solutions Private
Limited,
Brio Academic,
Zee Foundation,
Zee Akash News
Private Limited,
206
Year ended
31st March, 2006
Smart Talk Private
Limited,*
Essel Corporate
Services Private
Limited,
Essel Agro Private Ltd ,
Limited,
known as Zee
Entertainment
Pan India Network
Infravest Private
Limited,
Ayepee Lamitubes
Limited,
Procall Private
Limited,*
Limited,
Communication
Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Asia TV Limited,
Ganjam Trading
Co.Private Ltd,
Zee Turner Limited,
Bhilwara Telenet
Services Private
Limited,*
Quick Call Private
Limited,*
Essel Telecom Holding
Limited,*
Siti Cable Network
Limited,
Network Limited,
Management Services
Limited,
Limited,
Kenllot Gaming
Solution Private
Limited,
Agrani Wireless
Services Ltd.*
Agrani Sattelite
Services Limited (Gib.)
* Ceased to be
subsidiary on March
31st, 2006
Year ended
31st March, 2005
Essel Corporate
Services Private
Limited,
Cyquator
Technologies Private
Limited,
Zee Telefilms Ltd
(Now known as Zee
Entertainment
Pan India Network
Infravest Private
Limited,
Ayepee Lamitubes
Limited,
Suncity Projects
Private Limited,
Communication
Communication
(U.K.) Limited,
ASC
Telecommunication
Limited,
Asia Today Limited,
Ganjam Trading Co.
Private Ltd,
Siti Cable Network
Limited,
New Era
Entertainment
Network Limited,
Integrated
Subscribers
Management
Services Limited,
Limited,
Jawahar Goel,
Kavita Goel.
Zee Interactive
Learning System
Limited
Period ended
30th June, 2008
Mr. Subhash Chandra
Mr. Ashok Kurien
Mr. B.D.Narang
Mr. Arun Duggal
Mr. Pritam Singh
Year ended
31st March, 2008
Services Private
Limited,
Quick Call Private
Limited,
Diligent Media
Indian Cable Net
Company Limited,
Limited, Pan India
Network Infravest
Private Limited,
Agrani Telecom
Limited,
Agrani Satellite
Communication
(Gib.)Limited,
Essel Shyam
Communication
Limited,
Essel Shyam
Technology Limited,
Churu Trading
Company Private
Limited.
Year ended
31st March, 2007
Zee Sports Limited,
Bhilwara Telenet
Services Private
Limited,
Quick Call Private
Limited,
ETC Networks
Limited,
Diligent Media
Indian Cable Net
Company Limited,
Mr Jawahar Goel.
Year ended
31st March, 2006
Mr. Subhash Chandra
Mr. Subhash Chandra Mr. Subhash Chandra
Mr. Jawahar Lal Mr. Laxmi Narain Goel
Mr. Ashok Kurien
Goel#
Mr. Ashok Goel
Mr. B.D.Narang
Mr. Ashok Kurien#
Mr. Puneet Goenka
Mr. Arun Duggal
Mr. B.D.Narang#
Mr. Rajagopalan
Chandrashekhar
Mr. Pritam Singh*
Mr. Arun Duggal#
Mr. Laxmi Narayan
Goel*
Mr. Punit Goenka*
Mr. Rajagopalan
Chandrashekhar*
Mr. Ashok Goel*
* w.e.f April 27 , 2007
$ w.e.f October 22,
2007
* Upto January 6,
2007
# w.e.f. January 6,
2007
207
Year ended
31st March, 2005
Mr. Subhash Chandra
Mr. Laxmi Narain
Goel
Mr. Ashok Goel
Mr. Puneet Goenka
Mr. Rajagopalan
Chandrashekhar
(Rs. in Lacs
Particular
(i) With
Subsidiries
Companies
Purchase of Goods
& ServicesIntegrated
Subscribers
Management
Services Limited
Quick Call Private
Limited
Smart Talk Private
Limited
Others
Sales, Services &
Recoveries (Net of
Taxes)
Integrated
Subscribers
Management
Services Limited
Agrani Convergance
Limited
Purchase of Fixed
Assets
Agrani Satellite
Services Limited
Loan,Advance and
Deposit Given
(including Share
Application
Money)
Agrani Satellite
Services Limited
Agrani Convergance
Limited
Agrani Wireless
Service Limited
Agrani Telecom
Limited
Others
Refund Received
against
Loan,Advance and
Deposit Given
Agrani Satellite
Services Limited
Agrani Convergence
Limited
Agrani Wireless
Service Limited
Quick Call Private
Limited
Others
Customer Security
transferred by
Integrated
Subscribers
Management
Services Limited
Repayment of
Loan, Advance and
Deposit
Agrani Convergence
Limited
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amount for Total Amount for
Amunt
oMajor
Amount
Major
Parties
Parties
2,006.22
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
5,698.03
2,747.33
Year ended 31st March,
2006
Total
Amount for
Amount Major Parties
-
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
8.06
2,006.22
5,698.03
2,747.33
-
-
-
-
-
-
5.06
-
-
-
-
2.50
-
-
-
-
0.50
0.92
233.10
-
0.92
233.10
-
-
-
466.61
-
-
-
-
-
-
-
482.54
-
3,021.83
482.54
23.82
-
66.36
23.82
1,688.55
-
260.30
466.61
3,021.83
66.36
288.31
158.09
-
-
-
608.33
102.11
-
-
-
428.75
-
-
-
-
274.31
-
-
-
-
88.85
0.10
810.00
30.00
-
2,069.14
56.28
810.00
30.00
-
356.17
32.31
-
-
-
715.05
7.94
-
-
-
699.30
16.00
-
-
-
298.62
-
-
-
-
-
0.03
-
8,806.78
-
-
-
8,806.78
3.25
-
-
-
3.25
208
-
-
-
-
-
-
-
Particular
Diminution in the
value of
Investment
Agrani Convergence
Limited
(ii) With Other
Related Parties:
Sales, Services &
Recoveries (Net of
Taxes)
Zee Entertainment
Enterprises Limited
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amunt
oMajor
Amount
Major
Parties
Parties
-
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
-
326.03
1,247.05
-
1,228.52
2006
Total
Amount for
1,247.05
4,675.99
-
1,188.72
67.35
213.55
1,783.22
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
-
490.53
83.55
53.11
84.59
300.85
711.45
46.45
-
121.66
419.57
348.97
177.53
27.42
Asia TV Limited
-
-
248.05
172.25
-
Zee Turner Limited
Essel Agro Private
Limited
New Era
Entertainment
Network Limited
-
-
738.40
-
-
-
-
-
591.44
-
-
-
-
87.50
410.00
Others
Purchase of Goods
& Services
52.43
294.55
845.9
30.00
-
Zee News Limited
Asia Today Limited
3,636.83
Zee Turner Limited
Zee Entertainment
Enterprises Limited
ITZ Cash Card
Limited
Essel Agro Private
Limited
New Era
Entertainment
Network Limited
Integrated
Subscribers
Management
Services Limited
Interest Paid
Zee Entertainment
Enterprises Limited
Rupee Finance &
Management Private
Ltd.
Churu Trading
Company Private
Limited
Donation
Interest Received
Essel Agro Private
Limited
56.71
8,025.22
26.24
-
423.01
1,273.67
674.52
360.80
46.05
833.54
1,041.70
255.66
32.29
-
-
1,426.63
710.25
7.81
-
-
-
-
3,714.87
-
-
-
-
937.23
0.20
711.81
134.27
212.08
49.00
60.80
8.64
10.46
-
186.90
99.57
36.62
8.64
-
-
11.51
12.38
-
-
6.38
23.19
-
-
-
1,256.52
2,425.55
520.12
67.41
-
233.58
1,974.81
496.25
67.41
-
21.36
401.43
9.51
-
-
976.92
40.66
-
-
-
24.66
8.65
14.36
-
-
-
-
Zee Foundation
5,140.04
5,547.87
193.28
Others
9,877.73
2,196.53
183.75
Others
Rent Paid
Zee Entertainment
Enterprises Limited
E-City
Entertainment (I)
Private Limited
Rama Associates
Limited
10,003.68
25.00
-
592.90
178.65
152.55
25.00
528.19
502.18
209
-
3.81
460.18
248.55
3.81
-
Particular
Ganjam Trading
Company Private
Limited
ASC
Telecmmunication
Limited
Wire & Wireless
India Limited
Purchase of Fixed
Assets
Wire & Wireless
India Limited
Zee Entertainment
Enterprises Limited
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amunt
oMajor
Amount
Major
Parties
Parties
Sale of Investment
Essel Agro Private
Limited
Loan, Advance and
Deposit Taken
(including against
share apllication
money)
Essel Agro Private
Limited
Zee Entertainment
Enterprises Limited
Wire & Wireless
India Limited
Churu Trading
Company Private
Limited
Rupee Finance &
Management Private
Ltd.
New Era
Entertainment
Network Limited
Others
Repayment of
Loan, Advance and
Deposit Taken
Essel Agro Private
Limited
Zee Entertainment
Enterprises Limited
Wire & Wireless
India Limited
Rupee Finance &
Management Private
Ltd.
Kenlotte Gaming
Solution Private
Limited
New Era
Entertainment
Network Limited
Churu Trading
Company Private
Limited
Zee News Limited
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
-
-
-
248.55
26.10
86.45
68.01
-
-
-
4.27
-
-
-
388.73
7,289.34
6,943.18
639.96
-
388.73
29.61
-
-
-
-
7,256.46
6,930.34
639.96
-
-
3.27
12.84
-
-
-
7,836.31
Zee News Limited
Integrated
Subscribers
Management
Services Limited
2006
Total
Amount for
-
-
Others
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
-
78,787.50
2,022.17
-
6,416.25
2,022.17
8,354.02
-
2,690.26
-
-
-
830.00
-
6.31
31,770.00
3,263.25
31.11
-
130.00
217.50
1,053.00
-
-
3,200.00
30,000.00
-
-
-
2,500.00
16,800.00
2,100.00
-
-
-
-
-
6,900.00
2,541.21
2,000.00
-
-
-
-
-
-
-
500.00
-
-
-
-
92.91
149.05
5,016.31
46,319.00
2,903.00
21.00
518.02
-
-
250.00
-
-
6.31
29,000.00
-
-
-
-
-
1,053.00
-
-
2,200.00
17,300.00
1,600.00
-
-
-
-
-
21.00
-
-
-
-
-
433.27
810.00
-
-
-
-
2,000.00
-
-
-
-
210
Particular
Zee Interactive
Learning Systems
Limited
Others
Loan,Advance and
Deposit Given
ITZ Cash Card
Limited
Essel Agro Private
Limited
ASC
Telecommunication
Limited
Ganjam Trading
Company Private
Limited
Others
Refund Received
against
Loan,Advance and
Deposit Given
ASC
Telecommunication
Limited
Essel Agro Private
Limited
Ganjam Trading
Company Private
Limited
Jay properties
Private Limited
Others
Corporate
Guarantee Given
Procall Private
Limited
Quick Call Private
Limited
Smart Talk Private
Limited
Bhilwara Telenet
Services Limited
Corporate
Guarantee
received
Zee Entertainment
Enterprises Limited
Release of
Corporate
Guarantee
received
Zee Entertainment
Enterprises Limited
Provision for
Doubtful Advances
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amunt
oMajor
Amount
Major
Parties
Parties
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
-
-
-
73.00
19.00
-
-
11.75
1,971.71
267.07
4,173.37
2006
Total
Amount for
9,248.90
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
5,251.84
1,934.51
267.07
-
-
-
32.00
-
3,136.46
8,434.62
-
5.20
-
941.00
584.59
-
-
-
-
-
5,184.08
-
-
95.91
229.69
67.76
-
33.00
2,473.93
6,802.00
6,044.58
-
15.00
155.11
293.86
-
-
18.00
2,312.82
-
-
-
-
-
982.42
4,201.66
-
-
-
5,073.23
1,839.00
-
-
6.00
452.49
3.92
-
-
240.00
-
-
-
-
200.00
-
-
-
-
15.00
-
-
-
-
15.00
-
-
-
-
10.00
-
-
8,000.00
6,227.00
8,000.00
6,047.81
22,240.31
6,227.00
10,000.00
6,047.81
-
22,240.31
-
10,000.00
-
-
-
80.31
-
-
-
-
Brio Acedmic
-
-
79.50
-
-
Others
Assets & Liabilities
Received Pursuant
to Scheme of
Arrangement
DCS undertaking
of Zee
Entertainment
Enterprises
Limited
-
-
0.81
-
-
-
-
13,856.07
211
-
-
Particular
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amunt
oMajor
Amount
Major
Parties
Parties
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
2006
Total
Amount for
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
Total Assets
-
-
17,119.52
-
-
Total Liabilities
Siti Cable Network
Limited
-
-
3,263.45
-
-
-
-
(4,245.84)
-
-
Total Assets
-
-
10,118.49
-
-
Total Liabilities
New Era
Entertainmet
Network Limited
-
-
14,364.33
-
-
-
-
98.20
-
-
Total Assets
-
-
11,414.15
-
-
Total Liabilities
Assets & Liabilities
Received pursuant
to Slump Sale
Essel Agro Private
Limited
-
-
11,315.95
-
-
-
-
(4,511.78)
-
-
Total Assets
-
-
15,249.00
-
-
Total Liabilities
Purchase
Consideration
Key Management
Personnel
Remuneration to
Managing Director
-
-
19,755.78
-
-
-
-
5.00
-
-
Jawahar Lal Goel
Salary &
Allowances
15.44
15.44
-
Others
Loan, Deposit and
Advances Given
Agrani Satellite
Services Limited
Integrated
Subscribers
Management
Services Limited
Agrani Convergence
Limited
Agrani Wireless
Service Limited
Debtors
Agrani Convergence
Limited
Agrani Satellite
Services Limited
Creditors for
-
10,692.15
14.62
-
-
10.15
10,692.15
-
-
10,687.15
-
12,510.66
9,440.10
9,440.10
9,440.10
9,440.10
9,440.10
1,247.05
1,247.05
1,247.05
1,247.05
2,445.20
5.00
5.00
5.00
-
-
-
-
-
-
625.36
10,288.65
3,341.70
3,275.34
5,999.89
5,990.14
6,333.53
3,341.70
3,275.34
3,246.52
4,739.37
3,955.12
-
-
-
-
-
-
-
1,232.12
-
-
-
-
521.31
-
-
-
-
999.94
-
9.27
-
10.15
10,692.15
10,729.51
Others
14.62
61.74
-
Jawahar Lal Goel
Balance at the end
of period:
With Subsidiaries
Companies:
Investment
Agrani Satellite
Services Limited
Agrani Convergence
Limited
Integrated
Subscribers
Management
Services Limited
61.74
-
-
-
206.34
-
-
-
-
106.72
-
-
-
-
99.62
9.27
6,766.07
212
-
-
Particular
expenses and other
liabilities
Integrated
Subscribers
Management
Services Limited
Agrani Convergence
Limited
Corporate
Guarantee Given
Quick Call Private
Limited
Smart Talk Private
Limited
Bhilwara Telenet
Services Limited
Agrani Convergence
Limited
With Other
Related Parties:
Loan, Deposit and
Advances Given
Comm. (UK)
Limited
Comm. (Gib.)
Limited
Agrani Satellite
Comm. (Gib.)
Limited
ITZ Cash Card
Limited
Essel Agro Private
Limited
ASC
Telecommunication
Limited
Jay Properties
Limited
Others
Provision
outstanding
against advances
given
Comm. (UK)
Limited
Comm. (Gib.)
Limited
Others
Loan, Deposit and
Advances Taken
New Era
Entertainment
Network Limited
Suncity Project
Limited
Kenlott Gaming
Solutions Private
Limited
Ayepee Lamitube
Limited
Churu Trading
Company Private
Limited
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amunt
oMajor
Amount
Major
Parties
Parties
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
2006
Total
Amount for
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
-
-
6,753.55
-
-
9.27
9.27
12.52
-
-
-
-
-
140.00
-
-
-
-
-
15.00
-
-
-
-
15.00
-
-
-
-
10.00
-
-
-
-
100.00
25,054.20
25,360.89
23,941.55
22,011.53
18,314.51
3,768.82
3,768.82
3,768.82
3,768.82
3,768.82
8,277.08
8,277.08
8,277.08
8,277.08
8,277.08
38.41
38.41
38.41
38.41
-
1,688.08
587.21
1,331.28
-
-
9,679.14
11,091.60
8,996.56
9,233.33
-
1,512.01
1,506.81
1,439.82
585.93
-
-
-
-
-
5,073.23
90.66
90.96
89.58
107.96
1,195.38
12,164.61
12,164.61
12,164.61
12,084.31
12,084.31
3,768.82
3,768.82
3,768.82
3,768.82
3,768.82
8,277.08
8,277.08
8,277.08
8,277.08
8,277.08
118.71
118.71
118.71
38.41
38.41
38,841.26
35,126.11
601.21
56.78
4,481.62
-
-
-
-
4,364.78
27.00
27.00
27.00
27.00
27.00
-
-
19.00
19.00
-
10.78
10.78
10.78
10.78
10.78
33,398.37
30,040.66
-
-
-
213
Particular
Zee Entertainment
Enterprises Limited
Wire & Wireless
India Limited
Rupee Finance &
Management P.Ltd.
Others
Creditors for
expenses and other
liabilities
Zee Entertainment
Enterprises Limited
New Era
Entertainment
Network Limited
Integrated
Subscribers
Management
Services Limited
Period ended 30th
Year ended 31st
June 2008
March 2008
Total
Amunt
oMajor
Amount
Major
Parties
Parties
Others
-
-
-
347.50
217.50
38.06
-
-
725.03
403.67
506.37
-
-
127.34
102.89
-
-
79.06
21,083.68
Asia TV Limited
Zee News Limited
Zee Entertainment
Enterprises Limited
Essel Agro Private
Limited
New Era
Entertainment
Network Limited
Others
Corporate
Guarantee Given
Procall Private
Limited
Quick Call Private
Limited
Smart Talk Private
Limited
Bhilwara Telenet
Services Limited
Suncity Project
Limited
Corporate
Guarantee
Received
Zee Entertainment
Enterprises Limited
15,733.31
8,626.05
448.85
8,597.21
8,508.59
7,305.84
4,616.88
447.77
-
-
-
2,670.53
-
-
-
-
1,164.44
-
13,912.60
11,826.20
8,006.33
-
-
-
-
-
-
-
916.96
748.89
421.14
174.20
1.08
3,632.94
354.89
Asia Today Limited
Year ended 31st
March, 2005
Total
Amount
Amount
for Major
Parties
4,323.61
3,607.82
Debtors
2006
Total
Amount for
4,205.14
23,426.77
Zee Turner Limited
Essel Corporate
Services Limited
Year ended 31st
March, 2007
Total
Amount for
Amount
Major
Parties
3,645.08
529.65
27.42
386.37
237.72
178.58
27.42
-
-
164.73
172.25
-
438.51
343.46
468.82
-
-
2,006.34
1,931.05
1,933.22
-
-
-
-
-
91.49
-
-
-
-
85.54
-
808.08
972.06
840.59
1.79
-
-
-
240.00
40.00
500.00
-
-
200.00
-
-
-
-
15.00
15.00
-
-
-
15.00
15.00
-
-
-
10.00
10.00
-
-
-
-
-
500.00
20,527.00
18,467.31
20,527.00
22,240.31
18,467.31
4,000.00
22,240.31
4,000.00
4,000.00
Note:
1
2.
3.
4.
Major parties denote who account for 10% or more of the aggregate for that category of transaction.
The related party transaction disclosed are as per the requirement of accounting standard ‘18’.
Accounting Standard 'AS-18' became applicable to the Company for the financial year ended March
The above Statement should be read with the Significant Accounting Policies and selected notes to
accounts Restated Summary Statement as appearing in Annexure 4 to this report.
214
4,000.00
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
215
Standalone Restated Segmental Reporting of the Company
Annexure-14
(Rs. In lacs)
For the three months ended June 30, 2008
Teleport
Trading
Unallocated
Services
Particulars
DTH
Segment Revenue
External Sales
Inter-Segment Sales
Total Revenue
Segment Results
Operating Profit/(Loss) before Interest and Tax
Interest Expenses
Interest Income
Current Taxes-FBT/Wealth Tax
Other Information
Segment Assets
Segment Liabilities
Capital Expenditure
Total
15,520.94
606.14
318.83
-
-
-
-
-
15,520.94
606.14
318.83
-
(10,399.75)
(10,399.74)
-
(917.41)
(917.41)
-
(132.80)
(132.80)
-
-
(11,449.95)
(11,449.95)
1,635.30
190.85
(12,894.40)
16.13
90,468.84
184,826.83
7,923.22
4,368.46
552.55
-
2,705.07
183.05
88.36
32,348.35
-
126,074.81
185,009.88
7,923.22
4,456.81
5.40
-
-
-
5.40
216
16,445.91
16,445.91
(12,910.53)
For the year ended March 31, 2008
Teleport
Trading
Services
Unallocated
Particulars
DTH
Total
Teleport
Trading
Services
Unallocated
DTH
Total
Segment Revenue
38,974.32
External Sales
Inter-Segment Sales
1,232.28
1,121.75
-
41,328.35
18,014.01
69.16
1,048.88
-
19,132.05
-
-
-
-
-
-
-
-
-
-
38,974.32
1,232.28
1,121.75
-
41,328.35
18,014.01
69.16
1,048.88
-
19,132.05
Segment Results
(35,161.50)
(812.97)
(334.12)
-
(36,308.59)
(23,670.09)
15.08
(107.83)
-
(23,762.84)
before Interest and Tax
(35,161.50)
(812.97)
(334.12)
-
(36,308.59)
(23,670.09)
15.08
(107.83)
-
(23,762.84)
-
1,430.56
-
575.24
-
(24,618.16)
-
25.08
Total Revenue
Interest Expenses
Interest Income
Current Taxes-FBT/Wealth
Tax
Short Provision for earlier
years
-
-
-
-
-
5,341.32
-
-
-
646.68
-
(41,003.23)
-
57.94
-
0.98
-
(41,062.15)
30,958.79
121,155.96
72,989.29
113.71
-
-
-
-
-
-
(24,643.24)
23,488.45
99,521.85
Other Information
Segment Assets
87,041.54
588.31
2,567.32
2,930.40
Segment Liabilities
167,105.23
-
75.28
-
167,180.51
104,234.94
-
249.30
-
104,484.24
Capital Expenditure
25,789.79
-
-
-
25,789.79
58,929.57
-
2,120.63
-
61,050.20
14,549.54
-
355.19
-
14,904.73
5,399.06
-
353.78
-
5,752.84
150.99
509.80
Non cash expenditure other
than
150.99
-
-
-
217
-
-
79.50
589.30
Teleport
Trading
Services
Unallocated
Particulars
DTH
Total
Teleport
Trading
Services
Unallocated
DTH
Total
Segment Revenue
2,077.21
574.15
492.68
-
3,144.04
410.00
482.54
71.52
-
964.06
-
-
-
-
-
-
-
-
-
-
2,077.21
574.15
492.68
-
3,144.04
410.00
482.54
71.52
-
964.06
(8,807.66)
9.85
(28.38)
50.00
(8,776.19)
(2,483.56)
17.03
(102.53)
-
(2,569.06)
(8,807.66)
9.85
(28.38)
50.00
(8,776.19)
(2,483.56)
17.03
(102.53)
-
(2,569.06)
Interest Expenses
-
-
-
-
61.28
-
-
-
-
230.09
Interest Income
-
-
-
-
27.46
-
-
-
-
269.53
Current Taxes-FBT/Wealth
Tax
Income tax provision
written back
-
-
-
-
(8,810.01)
-
-
-
-
(2,529.62)
-
-
-
-
3.29
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.40
-
-
-
-
(8,813.30)
-
-
-
-
(2,525.22)
Segment Assets
20,879.54
46.95
952.93
15,059.43
36,938.85
1,215.32
106.72
323.41
24,320.61
25,966.06
Segment Liabilities
19,305.46
-
39.94
7,400.00
26,745.40
5,861.53
-
-
1,097.78
6,959.31
Capital Expenditure
10,250.30
-
-
-
10,250.30
331.48
-
308.84
-
640.32
251.30
-
32.15
-
283.45
145.57
-
26.69
-
172.26
1.97
-
-
-
1.97
5.18
-
-
-
5.18
External Sales
Inter-Segment Sales
Total Revenue
Segment Results
before Interest and Tax
Other Information
Non cash expenditure other
than
218
Annexure-15
Standalone Statement of Tax Shelter of the Company
(Rs. In lacs)
Sr. No.
A
B
C
D
E
F
G
H
I
J
K
L
Note:
1
2
For the three
Months period
ended June 30,
2008
PARTICULARS
Net Profit/Loss before current and deferred taxes, as
restated
Income Tax Rates applicable
(including Surcharge, education & higher education
cess)
Tax at applicable rate on (A)
Adjustments
Add: permanent Differences
Permanent disallowance under the Income Tax Act.
(Net)
Total (C)
Timing Difference
Difference between tax depreciation and book
depreciation (including loss on sale of depreciable
assets)
Other Allowance/ (Disallowance) as per Income Tax Act
(net)
Total (D)
Net Adjustments (C+D)
Profit/ (Loss) as per Income Tax Act. (A+E)
Tax Saving/(demand) on Adjustment
Taxation charge-Current (B-G)
Effect of the Scheme of Arrangement
Effect of Revised AS-15
Impact of change in tax rate (Net)
Total tax savings/(demand) ( G+I+J+K)
For the Year
ended
March 31,
2008
For the Year
ended
March 31,
2007
(12,894.41)
(41,003.23)
(24,618.16)
33.99%
33.99%
33.99%
-
-
-
225.59
1,066.97
627.06
225.59
1,066.97
627.06
1,620.44
3,785.59
(1,180.21)
49.23
82.63
790.64
1,669.67
1,895.26
(10,999.15)
644.20
-
3,868.22
4,935.19
(36,068.04)
1,677.47
-
644.20
1,677.47
(389.57)
237.49
(24,380.67)
80.72
(367.49)
7.61
38.23
(240.93)
The Company is not recognizing differed tax assets (Net) in all the years based on conservative policy
of the Company hence figures are given for only three periods.
(Jawahar Lal Goel)
Managing Director
(B.D.Narang)
Director
Place: Noida
219
STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY
Our Equity Shares are listed on the BSE, NSE and CSE. As our Equity Shares are actively traded on the BSE
and NSE, our stock market data have been given separately for each of these Stock Exchanges.
The high and low closing prices recorded on the BSE and NSE for the preceding month and the number of
Equity Shares traded on the days the high and low prices were recorded are stated below:
BSE
Month
High
(Rs.)
October 2008
28.50
September, 2008
41.20
August, 2008
41.40
July, 2008
34.40
June, 2008
Date of
High
49.40
October 1,
2008
September
9, 2008
August 21,
2008
July 11,
2008
June 2, 2007
May, 2008
60.7
April, 2008
66.00
Volume on
date of high
(no. of
shares)
Low (Rs.)
14,66,017
11.75
75,06,551
24.25
1,02,75,754
29.10
10,07,711
26.30
9,42,060
28.80
May 5, 2007
20,35,574
46.40
April 22,
2007
20,27,046
46.50
Date of
Low
October 27,
2008
September
30, 2008
August 1,
2008
July 2, 2008
June 30,
2007
May 30,
2007
April 7,
2007
Volume on
date of low
(no. of
shares)
Average
price for
the month
(Rs.)
9,51,974
18.21
8,15,531
33.68
6,98,552
36.70
8,73,227
30.06
6,82,297
39.72
16,56,013
53.65
5,67,210
54.25
Source: BSE website
NSE
Month
High
(Rs.)
Date of
High
Volume on
date of high
(no. of
shares)
29,48,853
Low (Rs.)
Date of
Low
October 2008
28.50
September, 2008
41.15
August, 2008
41.40
July, 2008
34.35
June, 2008
49.85
October 1,
2008
September
4, 2008
August 21,
2008
July 24,
2008
June 2, 2007
11.90
1,49,85,546
24.30
1,93,88,632
29.30
28,60,357
26.35
October 27,
2008
September
30, 2008
August 1,
2008
July 2, 2008
18,32,854
28.70
May, 2008
60.70
May 5, 2007
31,54,154
45.55
April, 2008
65.75
April 23,
2007
33,52,950
46.50
June 30,
2007
May 30,
2007
April 4,
2007
Volume on
date of low
(no. of
shares)
17,11,888
Average
price for
the year
(Rs.)
18.40
16,38,452
33.71
12,42,905
36.70
25,81,298
30.05
12,52,384
39.67
40,88,282
53.60
8,92,600
54.32
Source: NSE website
Our Equity Shares are infrequently traded on the CSE. By a certificate dated April 15, 2008 issued by CSE,
there was no trading in the Equity Shares on the CSE.
The market price was Rs. 23.05 on BSE on October 5, 2008, the trading day immediately following the day on
which Board meeting was held to finalize the offer price for the Issue.
The market price was Rs. 23.10 on NSE on October 5, 2008,, the trading day immediately following the day on
which Board meeting was held to finalize the offer price for the Issue.
In accordance with the provisions of the Scheme of Arrangement, the equity shares of our Company, issued
pursuant to the Scheme of Arrangement as well as its existing equity shares issued for the purpose of
220
incorporation were listed on BSE and NSE on April 12, 2007 and thereafter they were listed on CSE on June 4,
2007. The equity shares of our Company have not been listed for a period of three years.
221
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
You should read the following discussion of our financial condition and results of operations together with (a)
our consolidated financial statements as at and for the year ended March 31, 2008 and the three months ended
June 31, 2008 and the reports thereon and annexures thereto and (b) our standalone financial statements as at
and for the year ended March 31, 2008 and the reports thereon and annexures thereto, which have been
restated in accordance with paragraph B(1) of Part II of Schedule II to the Companies Act and with the SEBI
Guidelines, and which are all included in this Letter of Offer. Hence to that extent the figures are not strictly
comparable. Our financial statements are prepared in conformity with Indian GAAP.
In this section, references to “we”, “our” and “us” refers to the Company on a standalone basis for any period
or date up to and including March 31, 2008. References to “we”, “our” and “us” for any period or date after
March 31, 2008 refers to the Company, the Subsidiaries and the Associate Company on a consolidated basis.
Business Overview
channels and allied video/ audio services to subscribers on a monthly subscription basis. Our business
commenced operations in October 2003 (pursuant to a DTH license issued by the Ministry of Information &
Broadcasting, Government of India in 2003) with 47 channels. Currently, we offer over 200 digital channels
(including approx. 20 voice channels) to approx. 4 million subscribers across India.
We also provide various Value added services like Electronic Program Guide, Parental Lock, Sports Active,
News Active, Games and Movie on Demand. Our current subscription packages include Silver packwith 110
channels, Gold pack with 125 channels, Diamond pack with 140 channels, Platinum pack Offer with 165
channels; We also offer multi-room pricing at Rs. 155 (plus taxes) of Rs. 150, and package customization to suit
regional needs. Infrastructure wise we have 9 Ku band transponders on the New Skies Satellite (NSS) which
provide a footprint across the country. We also have bookings on the Protostar satellite which will enable access
for upto 12 additional transponders. We have approx. more than 100 Dish Care Centers (DCCs) and service
franchisees, which function as our service face in the market providing installation and after sale-service. We
currently have a 500 seat call centre, operating 24*7, answering calls from across all over India, related to
content provisioning, prospective customers and dealers, complaints and suggestions, service packages etc. Our
675 distributors and approx. 38,000 dealers present in 6,500 towns ensure proximity with the consumers across
India.
Our first mover advantage, geographic subscriber spread, infrastructure and technology partnerships are few of
our competitive advantages. We believe that our strength lies in strategy and execution, brand awareness,
subscriber & revenue growth, service capability, etc. We also hold the permission from the MIB for the
implementation of the HITS (Head-end In the Sky) platform where we will be able to provide digital signals to
our subscribers on mass scale at better economics. The Company is also in the business of providing teleport
services (uplinking and space segments) to the broadcasters of various channels.
Business Performance
Revenues
Our revenues comprise of:
•
•
Subscription income comprises of renewal charges and subscription charges from new activations paid
by active and the new subscribers respectively on various pay terms based on the package chosen by
them. Renewal charge is one of the key revenue driver and exhibits the health of the subscriber base.
ARPU, churn amongst the subscribers, collection efficiencies are the main drivers of this stream of
revenues. Subscription fees from new subscribers are subsidized and the portion charged to
subscription contributes towards the revenue stream.
Lease rentals of CPE received from new subscribers. The company provides CPE on a right to use
basis for a period of 3 years and collects advance rentals for the CPE for the entire period of lease. The
annual apportion of the same is accrued as income for the respective year and the balance amount is
treated as liability.
222
•
•
•
•
Other DTH revenues from sale of spare parts of CPE. The company is also providing repair services for
the CPE which gets defected at subscribers beyond the warranty period. In the process it sells the spare
parts to rectify the defect of the CPE.
Teleport revenues for uplinking of channels from our playout station. The company has the teleport
license and provides uplinking facilities for various channels for the broadcasters.
Net sales of CPE. To some customers the company also sells CPE and books the revenues as sales
revenues net of returns.
The company used to charge Placement and Active Services fees to the broadcasters for carrying the
channels at the preferred band. The same has been discontinued for FY 2007 and are adjusted against
the content cost paid to the broadcasters.
Expenditure
Our expenditure comprise of:
•
•
•
•
•
Operating costs comprising of:
o Broadcasting expenses like license fees, transponder lease costs, WPC charges, etc.
o Content cost which is one of the major component of the operating costs and is directly linked
to the package opted by our subscribers. So far the company has been buying content on
bouquet basis and the agreements for the same are generally executed on a sliding scale basis.
o The company has taken on lease 9 transponders from ISRO and the payment for the same is
made on monthly basis
Personnel cost: As at September 30, 2008, the Company had 984 employees including the call centre
staff. The personnel cost is guided by prevailing market salaries, potential attrition, etc.
Sales and distribution cost: The company provides its products through a wide network of distributors,
dealers, DSA, DCCs, Dish Shoppees, etc. The distributors are paid a fixed commission for CPE passed
on to the dealers. The dealers get the commission based on the activation done and for providing
relevant information of the subscriber. We also pay incentive on monthly basis to the distributors and
dealers based on a slabs set for CPE activations.
Financial charges: The company has borrowed money from banks / promoters and their associates for
which the interest is paid on monthly/ quarterly basis.
Depreciation: The substantial part of the depreciation expenditure comes from the depreciation booked
for the CPE which is leased out to the subscribers for 3 years but remains as an asset in the books of the
company.
Results of Operation
Three months ended June 30, 2008
Revenue:
Our consolidated Sales and Services and Loss after Tax for the period ended June 30, 2008 was Rs. 16,468.87
Lacs and Rs.13,245.86 Lacs respectively. The major contribution to the sales is from the subscription money
received from the new and existing customers contributing approx 80.89% to the total sales. Lease rentals of
CPE contribute 11.77% to the revenues while, teleport services, direct sale of CPE and others are other sources
of revenues contributing 1.94%, 3.76% and 1.64% each respectively.
Revenue Mix
(Rs. Lacs)
Particulars
Three months period ending
June 30, 2008
13,321.24
1,939.01
318.83
9.03
620.07
260.69
Subscription Income
Lease Rental Income
Teleport Services Income
Call Center Charges
Sales Trade
Bandwidth Charges
Other Income
223
Other income for the three month period ended June 30, 2008 is Rs. 210.06 Lacs which is primarily due to
Interest received and miscellaneous income.
Expenditure
Our total expenditure for the three months ended June 30, 2008 was Rs. 29,762.80 lacs. Operating costs
constituted 40.67% of the total expenditure while in a bid to acquire more subscribers we spend approx. 19.54%
of the total expenditure towards commission, selling and distribution expenses. As we lease out the CPE on
rental basis to the subscribers, the CPE assets are recorded on the asset side of our balance sheet; the
depreciation for the year including on CPE contributed approx. 15.88% of the total expenditure. Financial
charges were paid for the debts taken by the company contributing 8.85% of the total expenditure. Personnel
costs and other administrative costs contributed 5.36% and 4.75% each towards the total costs.
Profit/(Loss) before Tax and exceptional items
Profit/(Loss) before Tax and exceptional items is Rs. (13,226.80) Lacs for the period ended June 30, 2008 which
amounts to (79.99%) of the gross revenues (sales as mentioned above + other income + inventory increase)
Finance Charges
Finance charges for the period ended June 30, 2008 are Rs. 2,635.31 Lacs. The financial charges are paid
towards term loans and demand loans availed from banks and others.
Depreciation
The depreciation expense on fixed assets including for the CPE is Rs. 4,726.81 Lacs for the period ended June
30, 2008.
Loss after tax
Our loss after tax for the three month period ended June 30, 2008 was Rs. 13,245.86 Lacs.
Net Working capital
As of June 30, 2008, our net working capital, defined as difference between (a) current assets, loans and
advance and (b) current liabilities and provisions is Rs. (107,902.98) Lacs.
Current assets, loans and advances (or Total Current Assets) consist of inventories, sundry debtors, cash and
bank balances and loans and advances. Total Current Assets as of June 30, 2008 is Rs. 28,983.09 Lacs.
The following table sets forth details of our Total Current Assets:
(Rs. Lacs)
Particulars
Inventories
Sundry Debtors (net of Provisions)
Loans and Advances (net of provisions)
Total Current Assets
As of June 30, 2008
440.25
3,959.09
23,141.42
1,442.33
28,983.09
% of Total Current Assets
1.52%
13.66%
79.84%
4.98%
Inventory
Inventory comprises of stock in trade for the period ended June 30, 2008 valued at Rs. 440.25 Lacs.
Sundry Debtors
Sundry debtors consist of receivables from subscribers, LCN, teleport services and others. In turn, these
receivables are divided into those that have been outstanding for periods up to six months and those that have
224
remained outstanding for over six months. Receivables that have been outstanding for more than six months are
sub-divided into those that are considered good based on our internal guidelines and those that are considered
doubtful. Provisions are made for all receivables that management has determined are doubtful. The following
table presents the details of our debtors:
(Rs. Lacs)
Particulars
Amount due from debtors (net of provisions)
Gross amounts due from debtors outstanding for up to six months
Gross amounts due from debtors outstanding for more than six
months
Provisions for doubtful debts as at end of the period
As of June 30, 2008
3,959.09
1,000.04
3308.54
349.49
% of Debtors
23.21%
76.79%
8.11%
Loans and Advances given
Loans and advances consist of unsecured loans and advances that are considered good. These include, among
other items, deposits with landlords for properties taken on lease, customs, port trusts, excise authorities,
advance income tax etc. As of June 30, 2008 loans and advances totaled Rs 35,401.85 Lacs.
Current liabilities and provisions consist primarily of liabilities to sundry creditors, advances and deposits
received and temporary overdrafts as well as provisions for leave travel allowance, medical allowance, fringe
benefit tax and income taxes. The current liabilities and provisions as at June 30, 2008 was Rs. 1,36,886.07
Lacs.
Net Cash Flows
The table below summarizes our cash flows for the three months period ending June 30, 2008:
(Rs. Lacs)
June 30, 2008
9,575.48
(11,227.24)
(2,020.41)
(3672.17)
Net Cash Generated from (Used in) Operating Activities
Net Cash from (Used in) Investing Activities
Net Cash Generated from (Used in) Financing Activities
Net Increase/(Decrease) in Cash and Cash Equivalents
Cash flows from Investing activity and Financing activity was negative whereas cash generated from operating
activities was positive, which resulted into negative cash and cash equivalents of Rs. 3672.17. Cash generated
from operating activities was Rs. 9,575.48 lacs due to increase in overall subscriber base resulting in generating
the positive cash flows. However due to repayment of existing loan and substantial increase in subscriber
acquisition cost resulted in overall negative cash flow.
Financial year ended March 31, 2008 (FY 2008) compared with financial year ended March 31, 2007 (FY
2007)
Revenues:
42,271.65 Lacs for FY 2008, which is an increase of 110.40% over FY 2007. Major components of our sales
and services mix is as follows;
(Rs. Lacs)
Period ending
Subscription Income
Lease Rentals
Placement and Active services
Call center charges
Year ended March 31,
2008
32,884.20
6,036.15
1,121.75
40.17
225
12,190.09
2180.71
1048.88
3592.15
57.21
Period ending
Sales Trade
Bandwidth Charges
2008
1,142.27
53.97
69.16
-
Increase in Revenues for FY 2008 over FY 2007 was mainly on account of the increase in the subscriber base
from 1.97 mn in FY 2007 to 3 mn in FY 2008 and increase in average revenue per user (ARPU). This lead to
169.76% increase in the subscription income and 176.80% increase in the lease rentals. The increase in the
revenues from teleport services was due to increased number of channels uplinked.
Other Income
Other income, which was primarily due to Interest received and Exchange Gain realized, for FY 2008 was Rs.
993.14 Lacs while for FY 2007 was Rs. 887.68 Lacs.
Expenditure
Our total expenditure for FY 2008 was Rs. 83,706.71 Lacs and increase of 85.88% over Rs. 45,032.15 for FY
2007. Operating costs increased 48.04% due to increased number of subscribers. While the selling and
distribution expenses increased 98.73% in a bid to acquire more number of subscribers. Depreciation for the
assets including for CPE increased 151.81% mainly on account of increased CPEs leased. Financial charges
increased 228.60% due to increased debt financing to fund the subscriber acquisition costs. Personnel costs
increased 90.99% due to increased hiring of personnel.
Profit/(Loss) before Tax and exceptional items for FY 2008 increased 64.70% to Rs. (40,969.51) Lacs from
Rs.(24,875.17) for FY 2007 on account of increased subscriber acquisition subsidy, brand building and creation
of marketing and sales infrastructure.
Loss after tax
Loss after tax for FY 2008 increased by 65.00% to Rs. 41,042.20 Lacs from Rs. 24,873.33 Lacs for FY 2007 on
account of higher depreciation and increased financial charges.
Net Working capital
As of March 31, 2008, our net working capital, defined as difference between (a) current assets, loans and
advance and (b) current liabilities and provisions was Rs. (89,322.95) Lacs, while that of FY 2007 was Rs.
(70,298.74) Lacs. Decrease in the net working capital was due to increased scale of operations of the company
and the expenditure incurred in order to maintain the same.
Current assets, loans and advances consist of inventories, sundry debtors, cash and bank balances and loans and
advances. Total Current Assets as of March 31, 2008 was Rs. 28,490.33 Lacs and for FY 2007 was Rs.
21,130.43 Lacs. The increase in the current assets was mainly due to increase in loans and advances,
inventories, and cash and bank balance.
Following table sets forth details of our Total Current Assets:
(Rs. Lacs)
As of March 31, 2008
583.17
4,031.81
18,760.85
5,114.50
28,490.33
Inventories
Sundry Debtors
Loans and Advances
117.62
4,183.93
15,551.16
1277.72
21130.43
Following table presents the details of our Debtors:
(Rs. Lacs)
226
Period ending
Gross amounts due from debtors outstanding for more than six months
As of March 31, 2008 As of March 31, 2007
4,031.81
4183.93
964.10
4174.46
3,417.20
563.97
349.49
554.50
Loans and Advances given (net of provisions)
Loans and advances consist of unsecured loans and advances given that are considered good. These include,
among other items, deposits with landlords for properties taken on lease, customs, port trusts, excise authorities,
advance income tax etc. For FY 2008, loans and advances totaled Rs 18,760.85 Lacs and Rs. 15,551.16 Lacs for
FY 2007.
benefit tax and income taxes. Current liabilities and provisions for FY 2007 were Rs. 91,429.17 Lacs and for FY
2008 were Rs. 1,17,813.28 Lacs.
Financial year ended March 31, 2007 (FY 2007) compared with financial year ended March 31, 2006 (FY
2006)
Revenues:
20,090.75 Lacs for FY 2007, which is an increase of 270.48% over FY 2006. Major components of our sales
and services mix is as follows;
(Rs. Lacs)
Particular
2007
12,190.09
2,180.71
1,048.88
3,592.15
57.21
69.16
13.81
51.06
Subscription Income
Lease Rentals
Placement and active services
Call center charges
Sales Trade
Other Services Income
Other DTH revenues
2006
1,953.05
462.89
492.68
1,191.36
77.96
77.39
Increase in Revenues for FY 2007 over FY 2006 was mainly on account of the increase in the subscriber base
from 0.89 mn in FY 2006 to 1.97 mn in FY 2007 and increase in average revenues per user (ARPU). This lead
to 524.15% increase in the subscription income and 371.10% increase in the lease rentals. The increase in the
revenues from teleport services was due to increased number of channels uplinked. In FY 2006 we earned Rs.
25.00 Lacs by way of royalty and Rs. 993.45 Lacs as revenue from network operations.
Prior to Financial Year 2006, our Company had transmission rights only for the ‘Zee’ and ‘ESPN’ channels
which had comparatively limited content availability at its platform and low subscription rates. Consequently,
our Company could not reach mass markets especially in the metropolitan cities. Our Company received
transmission rights for the ‘Star’ and ‘Sony’ in approximately June 2006, which has contributed in a substantial
increase in the revenues.
Other Income
887.68 Lacs while for FY 2006 was Rs. 149.18 Lacs.
Expenditure
227
Our total expenditure for FY 2007 was Rs. 45,032.15 Lacs and increase of 203.30% over Rs. 14,847.59 Lacs for
FY 2006. Operating costs increased 179.72% due to increased number of subscribers. While the selling and
distribution expenses increased 194.37% in bid to acquire more number of subscribers. Depreciation for the
assets including for CPE increased 1176.77% mainly on account of increased CPEs leased. Financial charges
increased 305.47% due to increased debt financing to fund the subscriber acquisition costs. Personnel costs
increased 213.91% due to increased hiring of personnel.
Profit/(Loss) before Tax and exceptional items for FY 2007 decreased by 160.62% to Rs.(24,875.17) Lacs from
Rs. (9,544.44) for FY 2006 on account of increased subscriber acquisition subsidy, brand building and creation
of marketing and sales infrastructure.
Loss after tax
account of higher depreciation and increased financial charges.
Net Working capital
(5,510.57) Lacs. Decrease in the net working capital was due to increased scale of operations of the company
and the expenditure incurred in order to maintain the same.
Current assets, loans and advances consist of inventories, sundry debtors, cash and bank balances, and loans and
advances. Total Current Assets as of March 31, 2007 was Rs. 21,130.43 Lacs and for FY 2006 was
Rs.13,321.32 Lacs. The increase in the current assets was mainly due to increase of 128.88% in the inventory
and 313.64% in the Debtors. Debtors consist of receivables from subscribers, LCN, teleport services and other
debtors
(Rs. Lacs)
117.62
4,183.93
15,551.16
1,277.72
21,130.43
Inventories
Sundry Debtors
Loans and Advances
51.39
1,011.48
11,486.18
772.27
13,321.32
(Rs. Lacs)
Period ending
Gross amounts due from debtors outstanding for more than six months
4,183.93
4,174.46
563.97
554.50
1,011.48
818.97
325.85
133.34
Loans and Advances given (Net of provisions)
advance income tax etc. For FY 2007, loans and advances totaled Rs 15,551.16 Lacs and Rs.11,486.18 Lacs for
FY 2006.
228
2007 were Rs.91,429.17 Lacs.
Financial year ended March 31, 2006 (FY 2006) compared with financial year ended March 31, 2005(FY
2005)
Revenues
Our Sales for FY 2006 was Rs. 5,273.78 Lacs compared to Rs. 4,558.44 Lacs for FY 2005, an increase of
15.69%. While the total revenues increased from Rs. 4,970.84 Lacs for FY 2005 to Rs.5,422.96 Lacs for FY
2006, an increase of 9.09% over FY 2005.
Increase in Revenues for FY 2006 over FY 2005 was mainly on account of generation of subscription revenues,
increase in the lease rentals by 279.17% and revenues from teleport services by 588.87%
Other Income
149.18 Lacs and for FY 2005 was Rs.412.40 Lacs
Expenditure
Our total expenditure for FY 2006 was Rs. 14,847.59 Lacs and increase of 88.96% over Rs. 7,857.59 Lacs for
FY 2005. Operating costs increased 196.37% due to business expansion. While the selling and distribution
expenses increased from Rs.137.40 Lacs for FY 2005 to Rs.3086.69 Lacs in FY 2006 in bid to acquire
subscribers. Financial charges increased 29.70% due to increased debt financing.
Profit/(Loss) before Tax and exceptional items for FY 2006 decreased by 166.43% to Rs. (9,544.44) Lacs from
Rs. (3,582.32) for FY 2005 on account of subscriber acquisition subsidy, brand building and creation of
marketing and sales infrastructure.
Loss after tax
account of increased financial charges.
Net Working capital
4,453.95 Lacs. Decrease in the net working capital was due to increased scale of operations of the company and
the expenditure incurred in order to maintain the same.
Current assets, loans and advances consist of inventories, sundry debtors, cash and bank balances and loans and
advances. Total Current Assets as of March 31, 2006 was Rs.13,321.32 Lacs and for FY 2005 was Rs.13,501.82
Lacs. The increase in the current assets was mainly due to decrease of 69.98% in the inventory and increase of
125.80% in the Debtors.
(Rs. Lacs)
51.39
1,011.48
Inventories
Sundry Debtors
229
171.20
447.94
Loans and Advances
11,486.18
772.27
13,321.32
12,049.20
833.48
13,501.82
(Rs. Lacs)
Particular
Gross amounts due from debtors outstanding for more than six
months
1,011.48
818.97
325.85
447.94
253.78
367.40
133.34
173.24
Loans and Advances given (Net of provision)
advance income tax etc. For FY 2006 loans and advances totaled Rs.11,486.18 Lacs and Rs.12,049.20 Lacs for
FY 2005.
2005 were Rs.9,047.87 Lacs.
Net Cash Flows summary
The table below summarizes our cash flows for the period ending March 31, 2008, 2007 and 2006;
(Rs. Lacs)
March 31, 2008
March 31, 2007
March 31, 2006
Net Cash Generated from (Used in) Operating Activities
2,778.50
21,054.99
(5,586.31)
Net Cash from (Used in) Investing Activities
(28,834.22)
(35,481.97)
(1,596.25)
Net Cash Generated from (Used in) Financing Activities
29,892.50
14,789.63
7,121.36
Net Increase/(Decrease) in Cash and Cash Equivalents
3,836.78
505.45*
(61.20)
* Includes Rs. 142.80 Lacs arising out of demerger of DCS business unit from ZEEL and merger of the same with the
company pursuant to the scheme of arrangement approved by the High Court.
Positive operating cash flows in FY 2008 and FY 2007 was due to favorable credit terms, while the negative
operating cash flows in FY 2006 was due to losses in operating activities on account of increase in total
subscriber acquisition expenses due to expanding subscriber base and increased marketing expenditure.
Negative investing cash flows in FY 2008, FY 2007 and FY 2006 were due to expenditure incurred for purchase
of CPE. Positive financing cash flows in FY 2008, FY 2007 and FY 2006 were due to increase in short term
borrowings.
Related Party Disclosures
For details of Related Party Disclosures, please refer to the section entitled “Notes to Risk Factors – Related
Party Transactions” on page xxix of this Letter of Offer.
Significant Accounting Policies and Notes to Accounts
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUMMARY OF SELECTED NOTES
TO ACCOUNTS TO THE RESTATED SUMMARY STATEMENTS - CONSOLIDATED
A)
SIGNIFICANT ACCOUNTING POLICIES
a) Accounting Convention:
i) The Company generally follows mercantile system of accounting and recognizes income and
230
ii) The financial statements have been prepared on historical cost convention and in accordance
with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.
(b)
Fixed Assets:
I.
i)
Goodwill arising on consolidation represents the excess of cost to the parent of its investment
in subsidiaries company over the parent’s portion of equity, at the date on which investment in
subsidiary is made.
ii)
The Group capitalized Computer Software and related implementation costs as intangible
assets, where it is reasonably estimated that the software has an enduring useful life.
iii) License fees paid for acquiring
capitalized as intangible assets.
II.
license to operate Direct to Home (DTH) services are
i)
Tangible fixed assets are stated at Cost less accumulated depreciation. Cost includes capital
cost, freight, installation cost, duties and taxes and other incidental expenses incurred during
the construction/installation stage attributable to bringing the assets to working condition for
its intended use.
ii) All capital costs and incidental expenditure incurred during pre operational period and
advances paid for capital expenditure are shown as Capital work- in-progress.
iii) Customer premises equipments are capitalized on its activation.
(c)
(i) Depreciation is provided on tangible fixed assets including leased assets at the rates adopted in
the accounts of respective subsidiaries as permissible under applicable law, on straight line
method from the time they are available for use, so as to write off their cost over estimated
useful life of the assets. However the depreciation rates for assets listed below are higher than
the minimum rates specified in Schedule XIV of the Companies Act, 1956:S.No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Particular
Customer Premises Equipment
Network Equipment
Equipment on rental
Demonstration Equipment
Decoders
Office Equipments
Software
Signage
Digital Posters
Furniture and Fixture
Vehicle
Rate
20.00%
14.29%
20.00% to 40.00%
20.00% to 33.33%
10.00%
4.75% to 14.29%
16.21% to 20.00%
33.33%
20.00%
6.33% to 14.29%
9.50% to 14.29%
(ii) No part of goodwill arising on consolidation is amortized whereas goodwill arising on
acquisition is amortized over a period of five years
(iii) Leasehold improvements are amortized over the period of lease.
(iv) Computer Software is amortized based on managements estimate of useful life of five years or
license period whichever is shorter.
(v) License fee is amortized over the period of license.
231
(vi) Depreciation on other intangible assets is amortized over the economic useful life of the assets
as estimated by the management.
(d)
(i) Subscription revenue is recognized on completion of service.
(ii) Lease rentals is recognized in terms of the operating lease agreements.
(iii) Incomes from other services are recognized on the completion of services. Period based
(iv) Sale of goods are recognized when risk and rewards of ownership are passed on to the
(v) In the case of sales under deferred payment scheme, amounts of installments receivable are
allocated towards revenue from sale of radios and network airtime revenue based on
managements’ estimates. The amount allocated towards network revenue is recognized on
accrual basis over the period of the contract.
(e)
Investments:
i.
Investment intended to be held for more than one year from the date of acquisition are
classified as long term investment and are carried at cost. Provision for diminution in value of
these investments is made to recognize a decline other than temporary.
ii.
Current Investments are stated at cost or fair value, whichever is lower.
(f)
Inventories:
Inventories are valued at the lower of cost or net realizable value and cost is determined on
weighted average basis except in case of three subsidiaries where cost is determined on first in first
out basis. The effect is unascertained. Stock under deferred payment scheme is stated at
proportionate value of future rental revision.
(g)
Institute of Chartered Accountants of India, originally comes into effect in respect of the
accounting periods commencing on or after April 01, 2006 and was mandatory in nature from that
date. Consequently, the above standard becomes applicable to the Group for any period on or after
the effective date. However, subsequently the Council of the Institute has deferred the mandatory
applicability of the standard for all periods on and after 7 December 2007. The Group adopted the
Accounting Standard (AS) 15, “Employee Benefits (revised 2005)” for the first time in preparing
restated statements, AS-15 (revised) has not been applied for the years ended March 31, 2006,
2005 and 2004 as the same was not applicable in those years. The restated financial statements for
those years have been prepared in compliance with the erstwhile Accounting Standard (AS) 15.
Consequently significant impact, if any, of applicability of the new standard has not been
recognized in the restated statements for the years ended March 31, 2006, 2005 and 2004.
I.
For the year ended March 31, 2006, 2005 and 2004
Retirement benefits to employees comprise contributions to provident fund and gratuity. Provident
fund contributions are charged to the Profit and Loss Account. The contribution to employees
gratuity fund Scheme of Life Insurance Corporation (LIC) is charged to profit and loss account
except in a case of one subsidiary where liability is provided based on actuarial valuation at year
end. Further, provision is made for the shortfall, if any, based on actuarial valuation at the year
232
end by an independent actuary. Effective from 31st March, 2006, the Company has discontinues
the payment of contribution to gratuity fund scheme of LIC.
Leave Encashment
II. For the year ended March 31, 2008 ,2007 and three months ended June 30, 2008
In respect of retirement benefits in the form of provident fund, the contribution payable by the
Group for a year is charged to the profit and loss account for the year.
Defined payment plan
The present value of defined benefit obligation and the related current service cost are measured
using the projected unit credit methods with actuarial valuation being carried out at each balance
sheet date.
Leave encashment:
date and is not funded.
Gratuity
retirement, death or termination of employment of an amount based on the respective employee’s
salary and the term of employment with the Company. The obligation is not funded except is the
case of two subsidiaries.
The Group has changed the method of computing provision for gratuity and leave encashment
from the method prescribed under AS 15 (Employee Benefit) to AS 15 (Employee Benefit)
(revised 2005). Pursuant to the adoption, the transitional obligation of the Company amounting to
Rs 22.40 lacs has been adjusted against general reserve as provided in the AS.
h)
In respect of stock option granted pursuant to the Company’s Stock Option Scheme, the intrinsic
value of option is treated as discount and accounted as employee compensation cost over the
vesting period.
i)
j)
Borrowing Cost:
k)
Taxes on Income:
233
benefit tax is measured as the amount expected to be paid to the tax authorities in accordance with
timing difference, being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more subsequent periods and
measured using relevant enacted tax rates. At the balance sheet date the company assesses
unrealized deferred tax assets to the extent they become reasonably certain or virtually certainty of
realization as the case may be.
l)
Lease:
Operating Lease
Finance Lease
Assets acquired under finance lease are capitalized and the corresponding lease liabilities is
recorded at and amount equal to the fair value of the lease assets at the inception of the lease.
Initial cost incurred in connection with the specific leasing activities directly attributable to
activities performed by the Company is included as part of the amount recognized as an asset
under the lease.
m) Earning Per Share:
common shares outstanding during the period. Diluted earnings per share is computed and
disclosed using the weighted average number of common and dilutive common equivalent share
outstanding during the period except where the result would be anti dilutive.
n)
Impairment:
At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine
whether there is an indication that those assets have suffered impairment loss. If any such
indication exists, the recoverable amount of assets is estimated in order to determine the extent of
impairment loss. The recoverable amount is higher of the net selling price and value in use,
determine by discounting the estimated future cash flows expected from the continuing use of the
asset to their present value.
Provision, Contingent Liabilities and Contingent Assets:
Miscellaneous Expenses:
Preliminary expenses till March 31, 2006 are written off over five years except in the case of one
subsidiary preliminary expenses are written off over 10 years.
B)
COMPARABILITY
C)
SUMMARY OF SELECTED NOTES TO ACCOUNTS
234
1.
Background
Dish TV India Limited (herein referred to as “the parent company”, “the company” or “Dish”) along with
its subsidiaries (collectively known as “the Group”) encompassing Direct to Home (DTH) Satellite
Television Service since 2003 – 2004 and also provide teleport service, customer support, transponder
space leasing, etc.
The group derives revenue mainly from subscription and network revenue from customers, lease rent on
equipment meant for using service provided by the group, teleport services, trading in electronic devices
etc.
During the year 2006-07, the name of the company has been changed from ASC Enterprises Limited to
Dish TV India Limited.
2.
Use of Estimates:
The preparation of the consolidated financial statements (CFS) in accordance with the Generally Accepted
Accounting Principles requires the management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements
and the reported amount of revenue and expenses of the year. Actual results could differ from those
estimates.
3.
3.1 Capital Structure:
(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Share Capital
428,222,803 (428,222,803) Equity Shares of Re. 1 each fully paid up
Total
Year ended
March 31, 2008
10,000.00
7,300.00
4,282.23
4,282.23
4,282.23
4,282.23
3.2 Reserves and Surplus:
(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Particulars
General Reserve
Less: Debit balance in Profit and Loss Account per contra
Total
4.
Year ended
March 31, 2008
16,958.57
16,958.57
-
16,958.57
16,958.57
-
Going Concern:
The restated CFS has been prepared assuming the Company will continue as a going concern. The
management believes that it is appropriate to prepare these financial statements on a ‘going concern’ basis,
for the following reasons:
4.1 The Company hold DTH license from Government of India for a considerable long time.
4.2 The Company is the first to launch DTH services in India. This type of business necessitates long
gestation period to stand on its feet. Being first mover, the Company has incurred huge expenses on
awareness of the product, brand building on a pan India basis. The benefit of these expenses will accrue
in the future years.
4.3 The Promoters are fully seized of the matter and is of the view that going concern assumption holds
true and that the Company will be able to discharge its liabilities in the normal course of business. The
235
Company would be able to meet its fund requirement with the various funding option including debts.
Hence no adjustment is made on account of reclassification of assets and liabilities for the going
concern assumption.
5.
Basis of Consolidation:
5.1 The Consolidated Financial Statements (CFS) of the Group are prepared under the historical cost
convention on going concern basis (except in case of two subsidiary where going concern is not
certain) in accordance with Generally Accepted Accounting Principles in India and the Accounting
Standard (AS) 21 on “Consolidated Financial Statements” issued by the Institute of Chartered
Accountants of India (ICAI), to the extent possible in the same format as that adopted by the parent
company for its separate financial statements by regrouping, recasting or rearranging figures wherever
considered necessary. The significant inconsistencies in accounting policies are disclosed wherever
applicable and no adjustment are made in CFS for such inconsistencies.
The consolidation of the financial statements of the parent company and its subsidiaries is done to the
extent possible on line to line basis by adding together like items of assets, liabilities, income and
expenses. All significant intra group transactions, balances and unrealized inter company profits have
been eliminated in the process of consolidation.
5.2 The parent company and its subsidiaries prepare its financial statements under the historical cost
convention, in accordance with Generally Accepted Accounting Principles (GAAP) prevalent in India.
5.3 The CFS includes the Financial Statements of the parent company and the subsidiaries as listed in the
table below. Subsidiaries are consolidated from the date on which effective control is acquired and are
excluded from the date of transfer/disposal.
Name of Subsidiary
Direct Subsidiaries
Agrani Convergence Limited.
Agrani Satellite Services Limited.
Agrani Wireless Services Limited.*@
Enterprises (Gibraltor) Limited. *
Services Ltd (Formerly known as
Agrani Telecom Limited).#
31 Mar
31 Mar
31 Mar
31 Mar
'08
'07
'06
'05
30 June
'08
31 Mar
'04
51.00
100.00
-
51.00
100.00
-
51.00
100.00
-
51.00
100.00
-
100.00
100.00
98.80
100.00
100.00
98.80
-
-
-
-
100.00
100.00
100.00
100.00
100.00
-
-
-
Indirect Subsidiaries
Quick Call Private Limited.*
Smart Talk Private Limited.*
Bhilwara Telenet Services Limited.*
Procall Private Limited.*
-
-
-
-
50.96
50.96
50.96
99.37
50.96
50.96
50.96
99.37
Essel Telecom Holdings Limited.*
-
-
-
-
98.01
98.01
* Ceased to be subsidiary on 31st March, 2006.
# Ceased to be subsidiary on 28th August, '2003 and again became subsidiary on 1 April, '2006 on
transfer of investment to the parent company under the Scheme of Arrangement.
@ Holding reduced to 52.294% on April 13, 2005.
5.4 Minority interest in subsidiary represents the minority shareholders proportionate share of the net assets
and net income.
5.5 In case of subsidiaries sold on 31st March, 2006 (as per listed above in para 5.3), for consolidation
purposes Profit and Loss account for the previous year ended 31st March, 2006 is considered on line by
line basis as per the audited accounts.
236
5.6 In case of subsidiaries acquired or ceased to be subsidiaries during a year (as per listed above in para
5.3), for consolidation purposes Profit and Loss account for year is considered on line by line basis
based on the management accounts and therefore unaudited.
5.7 In the case of subsidiaries where going concern assumption is in doubt, the accounts are restated on net
realizable value estimated by the management.
6.
The Scheme of Arrangement
During the financial year ended 31st March, 2007, The Scheme of Arrangement (the Scheme) under
Section 391 to 394 read with Section 78, 100 and other applicable provisions of the Companies Act, 1956
between Zee Entertainment Enterprises Limited. (ZEEL) (formerly known as Zee Telefilms Limited), Siti
Cable Network Limited (SITI) and New Era Entertainment Network Limited. (NEENL) and Dish TV India
Limited (the Company) (formerly known as ASC Enterprises Limited) and their respective shareholders
have been sanctioned by the Hon’ble High Court of Judicature at Mumbai and High Court of Judicature at
New Delhi vide their respective order dated 12th January, 2007 and 18th December, 2006 and a copy of
these orders have been filed with the respective Registrar of Companies on 17th January, 2007 and 19th
January, 2007 respectively. The Scheme has been given effect in financial statements for the year ended
31st March 2007 except actual allotment and reorganization of share capital which has taken place in the
financial year ended 31st March, 2008.
6.1 Pursuant to the Scheme, Direct Consumer Services undertaking (DCS) of ZEEL including investment
made by ZEEL in SITI and the entire business and whole of the undertaking of the transferor
Companies i.e. SITI and NEENL have been transferred to and vested in the Company on appointed
date i.e.1st April, 2006 on going concern basis. The assets and the liabilities of DCS undertaking of
ZEEL at book value and of SITI and NEENL at fair value accounted on purchase method as per
Accounting Standard-14 have been transferred to and vested in the Company as under.
(Rs. in lacs)
Particulars
NEENL
3,204.42
757.24
265.17
Less: Depreciation
475.67
2,728.75
757.24
265.17
Investments
Total Assets (A)
Loan Funds
6.2
SITI
-
3,293.48
-
193.64
10.00
-
14,197.14
5,000.00
6,900.00
-
1,057.76
4,248.97
17,119.53
10,118.48
11,414.14
3,263.24
10.70
71.00
0.20
14,353.63
11,244.95
3,263.44
14,364.33
11,315.95
13,856.08
(4,245.85)
98.19
Reorganization of Share Capital
6.2.1 The paid up equity share capital of the Company had been sub-divided on 25th September, 2006
by splitting 71,568,765 equity share of Rs. 10 each into 715,687,650 equity share of Re. 1 each.
6.2.2 Pursuant to the Scheme following effect are given in the financial statements for the year ended
31st March, 2007 considering the shareholding pattern of ZEEL on record date i.e. 20th
February, 2007:•
997,203,560 equity shares of Re 1 each fully paid up to be issued in the ratio of 23 equity
shares of Re 1 each fully paid up of the Company for every 10 equity shares of Re 1 each
fully paid up of ZEEL.
237
•
Reduction of above equity share capital by way of cancellation of 3 equity shares of Re 1
each fully paid up for every 4 equity shares of Re. 1 each fully paid up resulting in final
issues of 249,300,890 equity shares of Re. 1 each fully paid up.
•
Pending actual action, the difference on allotment, cancellation, reduction and issue of
Share Capital as above has been taken to the “Share Capital Suspense” under the head share
capital. The actual action has been taken during the year ended 31st March, 2008.
6.2.3 The share capital of the Company Rs. 715,687,650 divided into 715,687,650 equity shares of Re
1 each fully paid up had been reduced by cancellation of 3 equity shares of Re 1 each fully paid
up for every 4 equity shares of Re 1 each fully paid up. The resultant Share Capital is Rs.
1,789.22 lacs. Pending actual reduction Rs. 5,367.66 lacs has been taken to ‘Share Capital
Suspense’ under the head share capital.
6.3 Pursuant to the Scheme, surplus Rs. 16,980.97 lacs in the Restructuring Account after carrying out
following adjustments as per the Scheme has been transferred to General Reserve Account.
6.3.1 The value of net assets of DCS undertaking of ZEEL as reduced by the face value of equity
shares to be issued amounting to Rs. 11,363.07 lacs has been credited to Restructuring Account
6.3.2 The value of net assets/ (liabilities) of SITI and NEENL amounting to (Rs. 4,439.48 lacs) and
Rs. 93.20 lacs respectively, as reduced by the cancellation of the investments amounting to Rs.
193.64 lacs and Rs. 5.00 lacs respectively has been (debited)/credited to Restructuring Account
6.3.3 Balance in Share Premium Account and Profit and Loss Account (Debit Balance) amounting to
Rs. 37,282.45 lacs and Rs. 32,685.93 lacs respectively has been transferred to Restructuring
Account.
6.3.4
Reduction in Share Capital Rs. 5,367.66 lacs has been transferred to Restructuring Account.
Pursuant to demerger of DCS undertaking of ZEEL, SITI and NEENL became wholly owned
subsidiaries of the Company and hence upon the merger of the Subsidiaries with the Company, entire
equity share capital of these Companies stand automatically cancelled and hence there was no any
issue and allotment of shares of the Company.
6.4 The transactions of NEENL, SITI and DCS business of ZEEL between the appointed date and the
effective date are deemed to be made on behalf of the Company. Accordingly, all assets, liabilities,
income and expenditure of the demerged undertakings for the said period are taken over by the
Company and given effect in those financial statements.
6.5 The assets, license and agreements etc. transferred pursuant to the Scheme of Arrangement are in the
process of registration/transfer in the name of the Company.
7.
During the financial year ended 31st March, 2007, the Company acquired DTH Equipment Unit Business
(DEU) of Essel Agro Private Limited on a going concern basis vide agreement to transfer DTH Equipment
Unit (DEU) Business dated 31st December, 2006. Pursuant to the agreement following assets and liabilities
have been acquired and are included in these financial statements. The goodwill arising on acquiring of
DEU Business amounting to Rs. 4,511.78 lacs (including purchase consideration Rs. 5.00 lacs) has been
treated as intangible asset.
(Rs. in lacs)
Particulars
Fixed Assets
Total Assets
Net Deficit
Amounts (Rs.)
15,034.97
214.03
15,249.00
19,755.78
4,506.78
8. Taxes on Income
238
8.1 In view of the losses incurred during all the years/period covered in Restated Summary Statements and
brought forward losses, provision for taxation is not required under the provisions of Income Tax Act,
1961.
8.2 The component of the deferred tax balance accounted in the case of a subsidiary are as under:(Rs. in lacs)
Particulars
Three Months Period
ended
3oth June, 2008
Deferred Tax Assets
Total
Depreciation
Total
Deferred Tax Balance (Net) - Liabilities
Year ended
31st
March,2008
Year ended
31st March,2007
1,091.21
1091.21
923.55
923.55
632.32
632.32
1171.79
1171.79
80.58
1002.41
1002.41
78.86
700.90
700.90
68.58
8.3 As per the requirement of ‘Accounting Standard -22’ issued by The Instituted of Chartered Accountant
of India, applicable from period 1st April, 2001, the accumulated deferred tax (net) assets of the Parent
Company not taken into accounts based on conservative policy of the parent Company is as under:(Rs. in lacs)
Particulars
Three Months Period
ended
June 30, 2008
Deferred Tax Assets
Depreciation
Disallowances under the Income Tax Act
Total
Depreciation
Total
Deferred Tax Balance (Assets)(Net)
9.
Year ended
March 31, 2008
Year ended
March 31, 2007
28,515.82
2,888.65
272.89
31,677.36
24,523.68
1,257.40
256.15
26,037.23
12,211.92
313.99
12,525.91
31,677.36
26,037.23
911.47
911.47
11,614.44
Capital work in progress comprises of equipments [including customer premises equipment (CPE)], capital
goods in transit, capital advance and pre operative project expenses (to be eventually allocated to fixed
assets on commencement of commercial operation). The CPE are subject to physical verification and
reconciliation.
10. Others Disclosures
10.1
Exceptional item expensed in the financial year ended 31st March, 2004 represents provision for
doubtful advance Rs. 12,084.30 lacs (including Rs 8277.08 lacs due from subsidiary of a
shareholder) relating to multi mission satellite system project. The approval of the Reserve Bank of
India is yet to be obtained.
10.2
The expenses under various heads are net of expenses shared other related parties as per
arrangement.
10.3
As per advice received and in terms of DTH license agreement, the Company till March 31, 2008
provided license fee on revenue from DTH subscribers. However based on recent judgment during
August 2008 of Telecom Dispute Settlement & Appellate Tribunal in the case of one of the DTH
service provider, the Company, as an abundant precaution, has also provided license fee on other
revenue accruing from DTH license related activities for all the past years.
239
10.4
During the financial year ended 31 March 2005, the Company had granted rights to distribution,
marketing and aggregation (DTH Service) w.e.f. 1st April 2004 for a lump sum consideration of Rs
410 lac per annum to New Era Entertainment Network Limited (NEENL) which has been
terminated on 15th June, 2005. The Company has provided license fees payable to Pay &
Accounts Officer, Ministry of I & B, New Delhi on the revenue accounted by NEENL from these
services.
10.5
As at the balance sheet date, the Company has following foreign currency payable and receivables
which are not hedged by a derivative instrument or otherwise
(Rs. in lacs)
Particulars
Receivables
Payables
10.6
June 30, 2008
Value in
Value in
Equivalent
USD $
Euro
to INR Rs.
4.27
347.76
Value in
USD $
Value in
Euro
-
182.19
4.02
-
-
15,030.1
7
154.17
0.04
Equivalent
to INR Rs.
159.18
6,192.92
Employee Stock Option Plan –ESOP-2007
Board of Directors of the Company at their meeting held on June 28, 2007 and by the shareholders
of the Company by way of special resolution passed at their Annual General Meeting held on
August 03, 2007, to grant aggregating 4,282,228 options ( not exceeding 1% of the issued and
paid up equity share capital of the Company as on March 31, 2007), representing one share for
each option upon exercise by the employee of the Company at a exercise price determined by the
Board/remuneration committee. The Scheme covers grant of options to the specified permanent
eligible employees of the Company as well as of its subsidiaries and also to non-executive
directors of the Company including independent directors. Pursuant to the Scheme, the
Remuneration Committee during August 2007 and April 2008 has granted 3,073,050 options
and 184,500 options respectively to specified eligible employees of the Company at the market
price determined as per the SEBI Guidelines.
The options granted under the Scheme shall vest not less than one year and not more than five
years from the date of grant of options. Under the terms of the Scheme, 20% of the options will
vest in the employee every year equally. The Option grantee must exercise all vested options
within a period of four years from the date of vesting. Once the options vest as per the Scheme,
they would be exercisable by the Option Grantee at any time and the shares arising on exercise of
such options shall not be subject to any lock-in period.
Period ended June 30,
2008
2,926,150
184,500
1,227,100
1,883,550
2008
3,073,050
146,900
2,926,150
account for the accounting value. The Shareholders and Remuneration Committee in their
respective meeting, held on August 28, 2008 have approved re-pricing of stock options.
10.7
Debit and Credit balances of parties including subscribers, distributors and dealers’ are subject to
confirmation/ reconciliation and effect if any, will be considered on its determination.
11. Contingent Liability not provided for
240
11.1
(Rs. in lacs)
Three
Year ended
Months
Period ended March 31,
June 30,
2008
2008
Particulars
Estimated amount of contract
remaining to be executed on
capital account and not provided
for (Net of advance)
Year ended
March 31,
2007
Year ended
March 31,
2006
Year ended
March 31,
2005
Year ended
March 31,
2004
4,262.18
4,453.93
4,523.07
1,754.86
0.20
0.20
Bank guarantees given on behalf
of subsidiaries
-
-
-
-
100.00
400.00
Guarantees given on behalf of
other company
-
-
240.00
40.00
540.00
540.00
Guarantees given by bank
6,056.40
6,056.40
5,011.10
5,050.05
5,043.27
5,063.27
[Above Includes guaranteed by a
related party]
4,908.60
4,908.60
4,000.00
4,000.00
4,000.00
4,000.00
Claim against the company not
479.85
479.85
991.44
961.44
31.44
167.75
Legal
Cases
company.
against
the Unascertained Unascertained Unascertained Unascertained Unascertained Unascertained
11.2
The Entertainment Tax Authorities, Noida has raised a demand of Rs. 404.60 lacs on account of
entertainment tax for the period from November, 2003 to February, 2004. The Company has filed
petition against the demand, which is pending. Further the authorities have intimated a total demand
of Rs. 920.20 lacs till 31st March, 2007.
11.3
Entertainment Tax demand Rs. 116.75 lacs (estimated on the basis of various notices issued from
time to time) raised by various entertainment tax authorities of Utrakhand state have been challenged
and the petition is pending before the High Court. The demand has been stayed by the High Court.
Notice for further period has been issued wherein the demand has not been quantified.
11.4 The Company has given a guarantee for the performance of the term and conditions of satellite
capacity agreement between a subsidiary of the company namely Agrani Satellite Services Limited
and the vendor, which is strategically important for the business of the Company.
11.5 One of the subsidiary company has received a demand notice from Sales Tax Authorities amounting
to Rs. 960.00 lacs against which the Sales Tax Authorities had recovered Rs. 22.31 lacs directly by
attaching company’s bank account. This liability was disputed by the Company and appeal filed
before the appellate authorities and the said demand was cancelled by them. The Sales Tax
Department issued refund orders for the amount recovered by them, which is under process.
12.
Lease
12.1 In respect of assets taken on operating lease
The Group’s significant leasing arrangements are in respect of operating leases taken for offices,
residential premises, transponder etc. These leases are cancelable / non cancelable operating lease
agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The
241
initial tenure of the lease generally is for 11 months to 120 months. The details of assets taken on
operating lease are as under:(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Particulars
Year
ended
March 31,
2008
Year
ended
31st
March,
2007
Year
ended
31st
March,
2006
Lease
rental
Charges for the
1,466.38
4,438.53
4,040.96
3,849.59
period (net of
shared cost)
Sub-lease
payment
202.22
692.72
550.84
received
Not later than
523.24
483.15
1,411.19
one year
Later than one
year but not
1,534.34
1,561.27
70.59
later than five
years
More than five
361.92
388.00
years
Year
ended
31st
March,
2005
Year
ended
31st
March,
2004
2,190.51
685.03
-
-
-
-
-
-
-
-
12.2 The Company has leased out assets by way of operating lease and the gross book value of such
assets, its accumulated depreciation and depreciation for the period / year is as given below.
(Rs. in lacs)
Particulars
Lease
rental
income for the
period
Gross Value of
the Assets
Accumulated
Depreciation
Depreciation for
the year/ period
Future Lease Rental
Not later
one year
Later than
year but
later than
years
More than
Years
Year ended
March 31,
2008
Year ended
31st March,
2007
Year ended
31st March,
2006
Year ended
31st March,
2005
Year ended
31st
March,
2004
2,141.23
6,728.87
2,729.33
196.88
152.72
253.09
76,526.34
69,117.47
47,219.24
5,158.91
2,597.40
659.91
21,011.17
17,156.83
4,600.02
199.60
301.40
351.76
3,854.34
12,556.81
4,460.91
233.86
100.62
80.92
Three Months
Period ended
June 30, 2008
than
one
not
five
five
revenue (Under non-cancelable lease)
8,229.09
7,371.79
4,556.00
231.12
-
-
20,102.41
19,639.27
14,475.65
4,382.54
-
-
-
-
-
-
-
-
12.3 The group has sold radios on hire-purchase basis. Future minimum lease payments receivable at the
end of the period/years are as follows.
( Rs.in lacs)
Particulars
Not later than one
year
Later than one
year but not later
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
-
-
-
-
-
-
242
Year ended Year ended
31st March, 31st March,
2007
2006
Year ended
31st March,
2005
Year ended
31st March,
2004
-
73.16
18.35
-
43.19
8.97
Particulars
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
-
-
Year ended Year ended
31st March, 31st March,
2007
2006
Year ended
31st March,
2005
Year ended
31st March,
2004
29.96
9.38
than five years
More
Year
than
five
-
-
Note:1)
Since the radios are sold at cost and a part of the total receipts are allocated towards such cost, the
present value of the future minimum lease payment receivable is not ascertainable.
2)
Few subsidiaries ceased to be subsidiary on 31st March, 2006, hence their closing balance are not
disclosed.
13
Significant Change in Accounting PoliciesSubsidiaries
a.
DEFERRED REVENUE EXPENSES
In the case of one subsidiary, capital issue expenses and expenses incurred on store set up cost including
advertisement and marketing expenses on launch of new stores, expenses incurred on conceptualization,
feasibility and other pre-set costs were deferred and amortized over five years. In the Restated Summary
Statements these expenses are appropriately adjusted in respective years in which the same were originally
incurred. The adjustments pertaining to financial years ended on or before 31st March, 2003 are adjusted in
the opening balance in profit and loss account as at 1st April, 2003.
b.
In the case of subsidiaries, preliminary expenses were fully written off as against the policy of amortize
over five or ten years, as the case may be. In the Restated Summary Statements of Profit and Loss
Account, the expenses are amortized as per the policy. The adjustments pertaining to financial years ended
on or before 31st March, 2003 are adjusted in the opening balance in profit and loss account as at 1st April,
2003.
c.
RETIREMENT BENEFITS
During the financial year ended 31st March, 2004, 2005 and 2006 company ‘ s contribution to employee
gratuity find scheme of Life Insurance Corporation of India Limited was charged to profit and loss account.
For Restated Summary Statements, to realign with the relevant accounting standard prevailing on that date,
the gratuity liability as at balance sheet date has been considered on actual valuation made by independent
actuary. The adjustments pertaining to financial years ended on or before 31st March, 2003 are adjusted in
the opening balance in profit and loss account as at 1st April, 2003.
14. Auditors Qualifications
14.1
Auditors qualifications/remarks, which require any corrective adjustment in the financial
information, are as follows:I.
Holding Company
a.
for non recoverable advances aggregating to Rs.12, 284.30 lacs included in other advances due
from foreign companies as a part of the project taken over. Accordingly, adjustments are made
to the financial statement, as restated for the year ended 31st March, 2004 to account for the loss
of Rs. 12,084.30 lacs on such advances and balance Rs. 200.00 lacs recovered.
b.
243
Balance Rs. 9,440.10 lacs are considered good and recoverable based on the subsequent event
for the project under implementation undertaken by the subsidiary and also in view of long term
II.
Subsidiaries
14.2
a.
b.
qualified the report for non compliance of AS-28 “Impairment of Assets”. Necessary
adjustment has been made in respective previous year for impairment of assets.
Auditor qualification/ remarks, which do not require any corrective adjustment in the financial
information are as follows:I.
Holding Company
a.
for the project under implementation by the subsidiary and also in view of long term
b.
2006, the Company has given interest free loans to certain companies, which is not in
accordance with provision of sub section (3) of section 372 A of the Companies Act, 1956.
c.
for not providing exchange difference loss of Rs 1,029.05 lacs and Rs. 1072.79 lacs respectively
as required by AS -11 on realignment of foreign exchange advances Rs. 12,284.30 lacs. The
fully provided in the accounts. (Refer Note 14.1.I)
d.
e.
II.
•
a.
244
b.
•
•
•
a.
b.
a.
b.
2007 that in view of discontinuation of major part of business activity going concern status is
in doubt. Accordingly fixed assets, current assets, loans and advances have been carried at
estimated net realizable value by ACL.
•
2006 that pre-operative expenses incurred on satellite service project are for doing ground
work and creating capabilities for promoting and implementing such project. In case, these
expenses can not be capitalized with the fixed assets on completion of the project, these will
be treated otherwise, which may erode the net worth of ASSL. Further the auditor in the report
for the financial year ended 31st March, 2005 and 2006 have expressed doubt on going
concern basis of ASSL. In view of significant progress towards in the project, renewed
authorization from Govt. of India, entering into a satellite capacity agreement with the vendor
and additional funds provided by the holding company, the financial statements for the year
ended 31st March, 2007 have been prepared on going concern basis.
•
245
The auditors have qualified the report for financial year ended 31st March, 2005 and 2006,
for non compliance of AS-13 “Accounting for Investment” related to investment in fellow
subsidiaries and effect of this on loss for the year and net worth of ATL. These investments
are in fellow subsidiaries hence the qualification has no effect on the restated summary
statement of profit and loss of the group as being inter company transaction eliminated in the
process of consolidation.
•
a.
The auditors have qualified the report for financial year ended 31st March, 2004, 2005
and 2006 that AWSL has given interest free loans, not in accordance with the provision of
b.
The auditors have reported for the financial year ended 31st March, 2005 and 2006
regarding non providing for permanent diminution in the value of investment as required
by AS-13 ‘Accounting for Investment’ in fellow subsidiaries. These investments are in
fellow subsidiaries hence the qualification has no effect on the restated summary
statement of profit and loss of the group as being inter company transaction eliminated in
the process of consolidation.
c.
The Auditors in their report for the year ended 31st March, 2004 and 2005 expressed
their inability to comment on the recoverability of interest free loans Rs. 1,511.64 lacs
and Rs. 5,275.64 lacs outstanding on 31.03.2004 and 31.03.2005. The loans realized in
subsequent years, hence no adjustment required.
14.3 MAOCARO 1988/ CARO 2003
I.
Holding Company
•
Fixed Assets
a. In the financial year ended 31st March, 2006 and 2007, auditors have reported that
there is a phased program of physical verification of fixed assets except for consumer
premises equipments installed at the customers premises, which is reasonable having
regard to the size of the Company and nature of its assets. Pursuant to the program,
the physical verification of certain assets was carried out during the period. The
reconciliation of the fixed assets physically verified with the books is in progress and
b.
•
In the financial year ended 31st March, 2008, auditors have reported that the
fixed assets, except consumer premises equipments installed at the customer
premises have been physically verified by the management as per the phased
program of verification and no discrepancies were noticed on such verification.
Interest free loan to Parties covered u/s 301 of the Companies Act, 1956
In the financial year ended 31st March, 2005 and 2006, the auditors have reported, that
the Company has granted interest free unsecured loans to companies covered in the
register maintained under section 301 of the Act. The maximum amount involved during
the financial year ended 31st March, 2006 was Rs. 50.73 Crores (Year ended 31st March,
2005 Rs. 69.12 Crores) and for the financial year ended 31st March, 2006 balance of such
loan is nil (year ended 31st March, 2005 Rs. 50.73 Crores). Further in financial year
ended 31st March, 2007 auditor has reported loans given to 301 parties aggregating to Rs.
12.40 Crores are provided at the interest rate prejudicial to interest to the Company.
•
Internal Audit
In the financial year ended 31st March, 2007 auditors have reported that the Company
has an internal audit system commensurate with its size and nature of its business.
However, the same needs to be strengthened as regard scope and periodicity.
246
•
Statutory Dues
In the financial year ended 31st March, 2004, 2005, 2006 and 2007,auditors have reported
that the Company is regular in depositing undisputed statutory dues including, investor
education and protection fund, employees state insurance, income tax, sales tax, wealth
tax, custom duty, excise duty, cess, Provident Fund and other statutory dues, wherever
applicable, with appropriate authorities except delay in few cases.
In the financial year ended 31st March 2007 and 2008 the auditors have reported that,
(Rs. In lacs)
Name of Statue
Nature of dues
Utter Pradesh
Entertainment &
Entertainment
Betting Tax Act,
Tax
1979
Utter Pradesh
Entertainment &
Entertainment
Betting Tax Act,
Tax
1979 (As Applicable
to Uttarakhand)
•
Period to which
pertain
Forum where
dispute is
pending
Amount stand
Amount
as at 31st
stand as at 31st
March, 2008
March, 2007
2003-2004 to
2006-2007
Allahabad High
Court
920.20
920.20
2003-2004 to
2006-2007
High Court of
Uttarakhand
88.36
-
Accumulated losses
reported that the accumulated losses (considering audit qualification) are more than fifty
percent of its net worth. Further, the Company has incurred cash losses for all the above
financial year.
•
Default in repayment to financial institution/bank
In the financial year ended 31st March, 2004, 2005 and 2008 auditors have reported,
default in repayment financial institution / bank as under:(Rs. in lacs)
Particulars
50.00
-
1.56
45.06
1-3 Month
1-2 Month
1,000.00
126.53
1-30 Days
3,750.00
500.00
3,250.00
-
65.49
31 days
16 days
28 days
23 days
Principal
Financial Institution
Banks
Banks
Axis Banks
Axis Banks
Axis Banks
IDBI Banks
•
Interest
Period of
default
Fund utilization
In the financial year ended 31st March, 2004, 2007 and 2008 auditors have reported that
short term fund amounting to Rs. 2,479.50 lacs , Rs. 51,626.07 lacs and Rs. 25,300.93
lacs respectively have been used for long term investment.
II.
•
247
•
•
•
a.
physically verified were not reconciled with the books of accounts & hence
discrepancies, if any could not be identified.
b.
In the financial year ended 31st March, 2004 and 2005, auditors have reported that
BTSL did not have internal audit system.
c.
In the financial year ended 31st March 2004, 2005 and 2006, auditors have reported
that BTSL is regular in depositing undisputed statutory dues including Income Tax,
Sales Tax and other statutory dues, wherever applicable, with the appropriate
authorities except delay in few cases.
d.
The financial year ended 31st March 2004, 2005 and 2006, auditors have reported
that the accumulated losses are more than fifty percent of net worth and also have
incurred cash losses during the financial year ended 31st March, 2005.
e.
In the financial year ended 31st March 2005 auditors have reported that assets given
on lease were not physically verified.
a.
physically verified were not reconciled with the books of accounts & hence
discrepancies, if any could not be identified.
b.
STPL did not have internal audit system.
c.
that STPL is regular in depositing undisputed statutory dues including Income Tax,
d.
that the accumulated losses are more than fifty percent of net worth and has incurred
cash losses during the financial year ended 31st March, 2004 and 2006.
e.
In the financial year ended 31st March, 2005, the auditors have reported that STPL
has used short term funds Rs. 27.58 lacs for long term investment.
a.
QCPL did not have internal audit system.
b.
that QCPL is regular in depositing undisputed statutory dues including Income Tax,
authorities except delay in few cases and also there is non payment of WPC charges
Rs. 1.67 lacs outstanding since March, 2001.
c.
that the accumulated losses are more than fifty percent of net worth and QCPL has
incurred cash losses during the financial year ended 31st March, 2004.
d.
In the financial year ended 31st March, 2005 and 2006 the auditors have reported
that QCPL has used short term funds Rs. 17.29 lacs and Rs. 127.00 lacs respectively
for long term investment
Procall Private Limited (PPL)
248
•
a.
In the financial year ended 31st March , 2004, 2005 and 2006 auditors have reported
that equipment on rental and demonstration equipment were not physically verified.
b.
In the financial year ended 31st March, 2004, 2005 and 2006, auditors have reported
that PPL did not have internal audit system.
e.
that PPL is regular in depositing undisputed statutory dues including Income Tax,
Sales Tax and other statutory dues, where applicable, with the appropriate authorities
except delay in few cases.
f.
that the accumulated losses are more than fifty percent of net worth.
e.
In the financial year ended 31st March, 2005 the auditors have reported that PPL has
used short term funds Rs. 54.99 lacs for long term investment.
a.
In the financial year ended 31st March, 2004 auditors have reported that electronic
devices with customers not physically verified.
b.
In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008, auditors
have reported that ACL is regular in depositing undisputed statutory dues including
Income Tax, Sales Tax and other statutory dues, where applicable, with the
appropriate authorities except delay in few cases. Further unpaid and undisputed tax
dues outstanding as on 31st March, 2004, 2005, 2007 and 2008 was Rs.0.35 lacs,
0.44 lacs, 0.55 lacs and Rs. 0.42 lacs respectively.
c.
In the financial year ended 31st March, 2004 auditors have reported that internal
audit system requires to be strengthen in respect to scope and periodicity and for the
financial year ended 31st March 2005, 2006, 2007 and 2008 has reported that ACL
d.
The financial year ended 31st March 2004, 2005, 2006, 2007 and 2008 auditors have
reported that the accumulated losses are more than fifty percent of net worth. Further
ACL has incurred cash loss during the financial year ended 31st March 2004, 2005,
2006 and 2008.
e.
ACL has used short term funds Rs. 324.94 lacs and Rs. 1301.31 lacs respectively for
long term investment.
.
•
reported that ASSL is regular in depositing undisputed statutory dues including Income
Tax, Sales Tax and other statutory dues, wherever applicable, with the appropriate
•
a.
In the financial year ended 31st March, 2006 auditors have reported that ATL did not
b.
In the financial year ended 31st March 2006 auditors have reported that ATL is
regular in depositing undisputed statutory dues including Income Tax, Sales Tax and
other statutory dues, where applicable, with the appropriate authorities except delay
in few cases.
249
c.
The financial year ended 31st March 2006 auditors have reported that the
accumulated losses are more than fifty percent of net worth and ATL has incurred
cash losses during the financial year ended 31st March, 2006.
d.
ATL has used short term funds Rs. 0.11 lacs and Rs. 2.83 crores respectively for long
term investment.
•
In the financial year ended 31st March, 2006, auditors have reported that AWSL did not
Integrated Subscriber Management Services Limited (ISMSL)
•
In the financial year ended 31st March 2007 and 2008 auditors have reported that
ISMSL is regular in depositing undisputed statutory dues including Income Tax, Sales
Tax and other statutory dues, where applicable, with the appropriate authorities except
delay in one case and three cases respectively.
14.4 Other non compliance:I.
II.
Holding Company
a.
For the financial year ended 31st March, 2004, the Company did not form an audit
1956.
b.
For the financial year ended 31st March, 2004 and 2005, the Company did not have a
1956.
•
•
e.
For the financial year ended 31st March, 2004, 2005 and 2006, BTSL did not have a
1956.
f.
For the financial year ended 31st March, 2004, 2005 and 2006, BTSL has reported that
as per the license agreement with Department of Telecommunication, BTSL is required
to maintained, a separate bank account in the service area to which the total revenue
accruing from the operation shall be credited. The authority shall have a lien on 15% of
the funds credited to such account, limited to the amount due to Authority. During the
year 1999-2000, the Company received a letter from DOT directing it to comply with the
above condition. However, the company did not comply with the same. The company
does not expect licenses to be terminated on account of non compliance of the above
condition as the bank guarantee given by the DOT sufficiently covers the Company’s
liability.
g.
During the financial year ended 31st March 2004, 2005 and 2006, debtors includes
amount due from private limited company is which directors are interest as directors.
h.
During the financial year ended 31st March 2006, advance includes amount due from
private limited company is which directors are interest as directors.
250
a.
form an audit committee of its board of directors as required under section 292A of the
b.
For the financial year ended 31st March, 2005, 2006, 2007 and 2008, ASSL did not have
a whole time company secretary as required under section 383A of the Companies Act,
1956.
c.
appoint a managing director as required under section 269 of the Companies Act, 1956.
.
•
•
a.
For the financial year ended 31st March, 2004 and 2005, STPL did not form an audit
1956.
b.
For the financial year ended 31st March, 2004 and 2005, STPL did not appoint a
c.
For the financial year ended 31st March, 2004, 2005 and 2006, STPL did not have a
1956
d.
In the financial year ended 31 March, 2004, 2005 and 2006 it has been reported that the
total revenue accruing from the operation shall be credited. The authority shall have a
lien on 15 % of the funds credited to such account, limited to the amount due to
Authority. During the year 1999-2000, the Company received a letter from DoT directing
it to comply with the above condition. However, the Company did not comply with the
same. The company does not expect licenses to be terminated on account of noncompliance of with the above condition as the bank guarantee given to DoT sufficiently
covers the Company’s liability.
a. For the financial year ended 31st March, 2004 and 2005, QCPL did not form an audit
1956.
b. For the financial year ended 31st March, 2004 and 2005, QCPL did not appoint a managing
director as required under section 269 of the Companies Act, 1956.
c. In the financial year ended 31st March, 2004, 2005 and 2006 it has been reported that the
Company has been issued licenses from the Dot for establishing, maintaining and operating
radio trunked services in certain areas. As per the license agreement, the Company is
required to maintain a separate bank account in the service area to which the total revenue
accruing from the operation shall be credited. The authority shall have a lien on 15 % of the
funds credited to such account, limited to the amount due to Authority. During the year
1999-2000, the Company received a letter from DoT directing it to comply with the above
condition. However, the Company did not comply with the same. The company does not
expect licenses to be terminated on account of non-compliance of with the above condition
as the bank guarantee given to DoT sufficiently covers the Company’s liability.
•
a.
For the financial year ended 31st March, 2005, 2006, 2007 and 2008, ACL did not have a
whole time company secretary as required under section 383A of the Companies, Act, 1956.
251
b.
D).
For the financial year ended 31st March, 2006, 2007 and 2008, ACL did not appoint a whole
time director/ managing director as required under section 269 of the Companies Act, 1956.
3.
The Group adopted the revised ‘Accounting Standard 15(Revised) on employees benefits effective
from 1 April 2006. Pursuant to the adoption, the incremental liability at the beginning of the year in
respect to Gratuity and Leave Encashment has been adjusted against general reserve as provided in
the Standard and accordingly no adjustment is made in previous years.
4.
Below mentioned is the summary of results of restatement made in the audited consolidated financial
statement for the three months ended 30 June, 2008 and year ended 31 March 2008 and 2007 and
also adjustment made in the consolidated financial information for right issued (CIFR) prepared and
certified by the management of the Company and its impact on the profit or loss of the Company.
(Rs. In lacs)
Particulars
Miscellaneous
Expenses written off
Retirement Benefit
Prior Period Items
items)
Sales/VAT Demand
Unspent Liability
Written Off
Licesnes fees
Total
3.
For the
For the
For the
For the
For the
For the
Reference
three
year
year
year
year
year
to Note
months
ended
ended
ended
ended
ended
No.
ended June March 31, March 31, March 31, March 31, March 31,
30, 2008
2008
2007
2006
2005
2004
3(a)
-
-
-
-
123.46
63.62
3(b)
4(a)
-
276.86
(224.48)
1.95
(52.18)
(0.99)
(3.78)
(1.48)
8.60
4(b)
-
-
4(c)
4(d)
-
220.90
-
(220.90)
-
(3.81)
406.02
(397.48)
4(e)
-
-
(46.27)
(38.49)
2.62
57.55
4(f)
756.73
756.73
(127.20)
370.56
- 12,084.30
(374.60)
(65.48)
(866.25) 11,926.30
- (12,084.30)
(134.80)
(54.64)
392.53 (12,408.13)
CHANGES/CORRECTION IN ACCOUNTING POLICIES
a) MISCELLANEOUS EXPENITURES (TO THE EXTENT NOT WRITTEN OFF OR
ADJUSTED)
i)
DEFFERED REVENUE EXPENSES
conceptualization, feasibility and other pre-set costs were deferred and amortized over five year. In
the restated Summary Statements these expenses are appropriately adjusted in respective years in
which the same were originally incurred. The adjustments pertaining to financial year ended on or
before 31 March 2003 are adjusted in the opening balance in profit and loss account as at 1 April
2003.
ii) PRELIMINARY EXPENSES
In the case of subsidiaries, preliminary expenses were fully written off as against the policy to
amortize over five or ten years, as the case may be. In the Restated Summary Statements of Profit
and Loss Account, the expenses are amortized as per the policy. The adjustments pertaining to
financial year ended on or before 31 March 2003 are adjusted in the opening balance in profit and
loss account as at 1 April 2003.
252
b) RETIREMENT BENEFITS
During the financial year ended 31 March, 2004, 2005 and 2006 company’s contribution to employee’s
gratuity fund scheme of Life Insurance Corporation of India was charged to profit and loss account. For
Restated Summary Statements, to realign with the relevant accounting standard prevailing on that date,
the gratuity liability as at balance sheet date has been considered on actuarial valuation made by
independent actuary.
4.
OTHER ADJUSTMENTS
During the three months period ended 30 June, 2008 and financial year ended 31 March 2008, 2007,
2006, 2005, 2004 certain items of income/expenses have been identified as prior period items. For the
purpose of this statement, such prior period items have been appropriately adjusted in the respective
years. The adjustments pertaining to financial years ended on or before 31 March 2003 are adjusted in
the opening balance in profit and loss account as at 1 April 2003.
b) PROVISION FOR DOUBTFUL ADVANCES
advances. The auditors had qualified their report for the financial year ended 31 March 2004 and 2005
hence the amount has been appropriately adjusted in the financial year ended 31 March 2004.
c)
During the three months period ended 30 June 2008 and financial year ended 31 March 2008, the
Company provided for Sales Tax/Vat demand raised. For the purpose of this statement, such demands
have been appropriately adjusted in the respective years.
d) PRE-OPERATIVE EXPENSES
During the financial year ended 31 March 2004, and earlier years the parent company incurred certain
expenditure on promoting and implementing DTH project and C band Teleport project and also
incurred expenses on trial run. These expenses were treated as pre-operative expenses to be allocated to
fixed assets or treated otherwise on commencement of commercial operation. However in the financial
year ended 31 March, 2005, these expenses were charged off to profit and loss. In the restated summary
statements these expenses are appropriately adjusted in respective years in which the same were
originally incurred.
Similarly, a subsidiary incurred expenses on project under taken by it during the financial year ended
31 March 2005 and earlier years. The auditors have qualified for their report for preparing the financial
statement on going concern basis though there was temporary suspension and no major development
on the project. The Auditors also reported non compliance of AS-28 “Impairment of Assets”. In the
Restated Summary Statements these expenses are appropriately adjusted in respective years in which
the same were originally incurred.
The adjustments pertaining to financial years ended on or before 31 March 2003 are adjusted in the
opening balance in profit and loss account as at 1 April 2003.
e)
UNSPENT LIABILITIES WRITTEN BACK
In the financial statement for the year ended 31 March, 2004, 2005, 2006, 2007 and 2008 certain
liabilities created in earlier years were written back. For the purpose of Restated Summary Statement,
the said liabilities, wherever required, have been appropriately adjusted in the respective years in which
the same were originally created. The adjustments pertaining to financial years ended on or before 31
March 2003 are adjusted in the opening balance in profit and loss account as at 1 April 2003.
f)
As per advice received and in terms of DTH license agreement, the license fee was being provided on
revenue from DTH subscribers. However based on recent judgment of Telecom Dispute Settlement &
253
Appellate Tribunal in the case of one of the DTH service provider , the Company , as an abundant
precaution, has also provided license fee on other revenue accruing from DTH license related activities.
The Additional license fee of Rs. 756.73 lacs is provided for past years. According in the restated
summary statements these expenses are appropriately adjusted in respective year to which revenue
pertains.
g) PROFIT AND LOSS ACCOUNT AS AT 01 APRIL, 2003
(Rs. In lacs)
Reference to
Note No.
Particulars
Profit/(Loss) as per consolidated financial
Balance as at
March 31, 2003
(13,783.28)
information for Right Issue
Adjustment :
3(a)
(187.08)
Retirement Benefit
3(b)
(1.45)
Prior Period Items
4(a)
(5.02)
4(d)
(136.90)
Unspent Liability Written Off
4(e)
24.58
(to the extent not written off or adjusted)
Total Adjustment
(305.87)
5
(14,089.15)
MATARIAL REGROUPING
i.
Upto the financial year ended 31 March 2004, interest received was shown under the head Income but
from the financial year ended 31 March 2005, the same is being shown under the head financial
charges as separate item and net balance (financial charges minus interest received) is taken in main
profit and loss account. However in the Restated Summary Statement of Profit and Loss the interest
income is shown under the head ‘Other Income’.
ii.
During the financial year ended 31 March 2005 and 2006, license fee amortized was grouped under the
head ‘Operating Expenses’ but from the financial year ended 31 March 2007, the amortized amount is
regrouped under the head “Depreciation/Amortization’. In the Restated Summary Statement of Profit
and Loss for the financial year ended 31 March 2005 and 2006 the amortized amount is regrouped and
shown accordingly.
iii. In the financial statements for the year ended 31 March 2006, Rs. 200 lacs were shown as investment
under the head ‘Investments’. However in the financial statements for the year ended 31 March 2007,
the same has been regrouped under Other Advances. In the Restated Summary Statement of Assets
and Liabilities for the financial year ended 31 March 2006 the same is regrouped and disclosed
accordingly.
iv. During the financial year ended 31 March 2004, teleport income was grouped under Other Income.
Based on regrouping of the income under Sales and Services during the financial year ended 31 March
2005 and onward, in the Restated Summary Statement of Profit and Loss the same is regrouped and
disclosed accordingly.
v.
During the financial year ended 31 March 2007, Other DTH Revenue was wrongly grouped under
‘Other Income’. Accordingly in the Restated Summary Statement of Profit and Loss the same is
regrouped as Other DTH Revenue.
254
vi. During the financial year ended 31 March 2006, credit balance of a loan written off was grouped
Exceptional Item which in the Restated Summary Statement of Profit and Loss has been regrouped
under the head “Other Income’.
vii. During the financial year ended 31 March 2006, penalty levied by the licensing authority was shown as
exceptional item which in the Restated Summary Statement of Profit and Loss has been regrouped
under operating expenses as a normal expense.
viii. During the financial year ended 31 March 2005, investment Rs 0.26 lacs shown as Balance with bank
have been regrouped as Investment. Accordingly, in the Restated Summary Statement of Assets and
Liabilities for the year ended 31 March 2004 the same is regrouped and disclosed accordingly.
ix. In the financial statement for the year ended 31 March 2006, tax provision Rs 1.33 lacs were grouped
under Administrative Expenses. Accordingly, in the Restated Summary Statement of Profit and Loss
for the year ended 31 March 2006 Same has been regrouped and shown accordingly.
x.
In the financial statement for the year ended 31 March 2007, advance tax payment was netted against
provision for taxation resulting in negative balance in provision for taxation. In the Restated Summary
Statement of Assets and Liabilities, the advance tax payment is regrouped under Loans and Advances.
xi. In the financial statement for the year ended 31 March 2006, Hire/Lease Charges Expenses shown
earlier under the head Administration and Other Expenses have been regrouped under Network
Operation Cost. Accordingly, in Restated Summary Statement of Profit and Loss regrouping is made in
past year also.
xii. During the financial year ended March 31, 2008 income from Bandwidth charges was grouped under
‘Other Income’. However in the financial statement for the three month period ended 30 June 2008, the
same is regrouped under ‘Sales and Services’ as separate item. Hence in the Restated Summary
Statement of Profit and Loss the same is regrouped and disclosed accordingly.
STANDALONE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUMMARY OF
SELECTED NOTES TO ACCOUNTS TO THE RESTATED SUMMARY STATEMENT
(STANDALONE)
A.
SIGNIFICANT ACCOUNTING POLICIES:(a)
(b)
I.
The Company generally follows mercantile system of accounting and recognizes
income and expenditure on accrual basis except those with significant uncertainties.
II.
The financial statements have been prepared on historical cost convention and in
accordance with the accounting standards referred to in Section 211 (3C) of the
Fixed Assets:
I.
II.
i.
The Company capitalizes Software and related implementation costs as
intangible assets, where it is reasonably estimated that the software has an
enduring useful life.
ii.
License fees paid by the Company for acquiring license to operate Direct to
Home (DTH) services are capitalized as intangible asset.
i.
Tangible fixed assets are stated at Cost less accumulated depreciation.
Cost includes capital cost, freight, installation cost, duties and taxes and
255
other incidental expenses incurred during the construction/installation
stage attributable to bringing the assets to working condition for its
intended use.
(c)
(d)
(e)
(f)
ii.
All capital costs and incidental expenditure incurred during pre
operational period and advances paid for capital expenditure are shown
as Capital work-in-progress.
iii.
i.
Depreciation on tangible fixed assets is provided on straight line method at the
rates and in the manner prescribed in Schedule XIV to the Companies Act 1956,
except customer premises equipments on which depreciation is provided @ 20%
based on useful life estimated by the management
ii.
Leasehold improvements are amortized over the period of lease.
iii.
Computer Software are amortized based on managements estimate of useful
life of five years or license period whichever is shorter
iv.
Goodwill on acquisition is amortized over a period of five years.
v.
i.
ii.
Lease Rentals is recognized in terms of the operating lease agreement.
iii.
Sale of goods is recognized when risk and rewards of ownership are passed on to
the customer, which is generally on dispatch of goods.
iv.
Income from other services is recognized on the completion of services. Period
based services are accounted proportionately over the period of service.
Investments:
i.
Investments intended to be held for more than one year from the date of
acquisition are classified as long term investment and are carried at cost.
Provision for diminution in value of these investments is made to recognize a
decline other than temporary.
ii.
Current investments are stated at cost or fair value whichever is lower.
Inventories:
Inventories are valued at lower of cost and net realizable value. Cost is determined on
weighted average basis.
(g)
The Accounting Standard (AS) 15, “Employee Benefits (revised 2005)”, issued by the
Council of Institute of Chartered Accountants of India, originally comes into effect in
respect of the accounting periods commencing on or after April 01, 2006 and was
mandatory in nature from that date. Consequently, the above standard becomes applicable
to the Company for any period on or after the effective date. However, subsequently the
Council of the Institute has deferred the mandatory applicability of the standard for all
256
periods on and after 7 December 2007. The Company adopted the Accounting Standard
(AS) 15, “Employee Benefits (revised 2005)” for the first time in preparing the financial
statements for the period April 01, 2006 to March 31, 2007. For the purpose of the
restated statements, AS-15 (revised) has not been applied for the years ended March 31,
2006, 2005 and 2004 as the same was not applicable in those years. The restated
financial statements for those years have been prepared in compliance with the erstwhile
Accounting Standard (AS) 15. Consequently significant impact, if any, of applicability of
the new standard has not been recognized in the restated statements for the years ended
March 31, 2006, 2005 and 2004.
I.
For the year ended March 31, 2006, 2005, 2004
i.
Retirement benefits to employees comprise contributions to provident fund and gratuity.
Provident fund contributions are charged to the Profit and Loss Account. The Company’s
contribution to employees gratuity fund Scheme of Life Insurance Corporation (LIC) is
charged to profit and loss account. Further, provision is made for the shortfall, if any,
based on actuarial valuation at the year end by an independent actuary. Effective from
31st March, 2006, the Company has discontinued the payment of contribution to gratuity
fund scheme of LIC.
ii.
Leave Encashment
II.
For the year ended March 31, 2007, 2008
30, 2008
i.
and three months ended June
In respect of retirement benefits in the form of provident fund, the contribution
payable by the Company for the year is charged to the profit and loss account
for the year.
ii.
Defined Benefit plan
The present value of defined benefit obligation and the related current service
cost are measured using the projected unit credit methods with actuarial
valuation being carried out at each balance sheet date. The defined benefit
obligations are not funded.
Leave encashment:
Liability for leave encashment is provided on the basis of actuarial valuation at the
balance sheet date.
Gratuity
retirement plan covering eligible employees. The plan provides payment to vested
employees on retirement, death or termination of employment of an amount based on the
respective employee’s salary and the term of employment with the Company.
The Company has changed the method of computing provision for gratuity and leave
encashment from the method prescribed under AS 15 (Employee Benefit) to AS 15
(Employee Benefit) (revised 2005). Pursuant to the adoption, the transitional obligation of
the Company amounting to Rs 22.40 lacs has been adjusted against general reserve as
provided in the AS.
257
(h)
Transactions in foreign currency are recorded at the exchange rate prevailing on the date
of transaction. Monetary assets and liabilities denominated in foreign currency are
translated at the exchange rate prevailing at the balance sheet date and gains or losses on
translation are recognized in Profit and Loss account. Non monetary foreign currency
items are carried at cost.
(i)
Borrowing Cost:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets
are capitalized as a part of such assets. All other borrowing costs are charged to revenue.
(j)
Taxes on Income:
benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with
timing difference, being the difference between taxable income that originate in one period and are
capable of reversal in one or more subsequent periods and measured using relevant enacted tax
rates. At the balance sheet date the company assesses unrealized deferred tax assets to the extent
they become reasonably certain or virtually certainty of realization, as the case may be.
(k)
Operating Lease:
Lease of the assets where all the risk and rewards of ownership are effectively retained by
the lessor are classified as operating lease. Lease payments/revenue under operating lease
are recognized as an expense/income on accrual basis in accordance with respective lease
agreement
(l)
Earning Per Share:
common shares outstanding during the year. Diluted earnings per share is computed and
disclosed using the weighted average number of common and dilutive common
equivalent share outstanding during the year except where the result would be anti
dilutive.
(m)
In respect of stock option granted pursuant to the Company’s Stock Options Scheme, the
intrinsic value of the option is treated as discount and accounted as employee
compensation cost over the vesting period.
(n)
Impairment:
At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to
determine whether there is an indication that those assets have suffered impairment loss.
If any such indication exists, the recoverable amount of assets is estimated in order to
determine the extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated future cash flows
expected from the continuing use of the asset to their present value.
(o)
Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized
when there is present obligation as a result of past events and it is probable that there will
be an outflow of resources. Contingent Liabilities are not recognized but are disclosed
258
in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the
financial statements.
B)
Comparability
The figures for the three months period ended June 30, 2008 are not comparable with figures for
all previous financial years.
C.
SELECTED NOTES TO ACCOUNTS
1.
Background:
Dish TV India Limited is mainly in the business of providing Direct to Home (DTH)
Satellite Television Service since 2003 – 2004 and also provide Teleport Service. During
the year 2006-07, the name of The Company has been changed from ASC Enterprises
Limited to Dish TV India Limited.
2.
Use of Estimates:
The preparation of the financial statements in accordance with the generally accepted
accounting principles requires the management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as
at the date of the financial statements and the reported amount of revenue and expenses of
the period. Actual results could differ from those estimates.
3.
3.1
Capital Structure:
(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Share Capital
428,222,803 (428,222,803) Equity Shares of Re. 1 each fully
paid up
Total
3.2
Year ended
March 31,
2008
10,000.00
7,300.00
4,282.23
4,282.23
4,282.23
4,282.23
Reserve and Surplus:
(Rs. in lacs)
Reserve and Surplus
General Reserve
Total
4.
Three Months
Period ended
June 30, 2008
16,958.57
16,958.57
-
Year ended
March 31,
2008
16,958.57
16,958.57
-
Going Concern:
The restated financial statements have been prepared assuming the Company will
continue as a going concern. The management believes that it is appropriate to prepare
these financial statements on a ‘going concern’ basis, for the following reasons:
4.1
The Company holds DTH license from Government of India for considerable
long time.
259
5.
4.2
The Company is the first to launch DTH services in India. This type of business
necessitates long gestation period to stand on its feet. Being first mover, the
Company has incurred huge expenses on awareness of the product, brand
building on a pan India basis. The benefit of these expenses will accrue in the
future years.
4.3
The Promoters are fully seized of the matter and is of the view that going
concern assumption holds true and that the Company will be able to discharge its
liabilities in the normal course of business. The Company would be able to meet
its fund requirement with the various funding option including debts. Hence no
adjustment is made on account of reclassification of assets and liabilities for the
going concern assumption.
The Scheme of Arrangement:
During the financial year ended 31st March, 2007, the Scheme of Arrangement (the
Scheme) under Section 391 to 394 read with Section 78, 100 and other applicable
provisions of the Companies Act, 1956 between Zee Entertainment Enterprises Limited.
(ZEEL) (formerly known as Zee Telefilms Limited), Siti Cable Network Limited (SITI)
and New Era Entertainment Network Limited. (NEENL) and Dish TV India Limited (the
Company) (formerly known as ASC Enterprises Limited) and their respective
shareholders have been sanctioned by the Hon’ble High Court of Judicature at Mumbai
and High Court of Judicature at New Delhi vide their respective order dated 12th January,
2007 and 18th December, 2006 and a copy of these orders have been filed with the
respective Registrar of Companies on 17th January, 2007 and 19th January, 2007
respectively. The Scheme has been given effect in financial statements for the year ended
31st March 2007 except actual allotment and reorganization of share capital, which has
taken place in the financial year ended 31st March, 2008.
5.1
Pursuant to the Scheme, Direct Consumer Services undertaking (DCS) of ZEEL
including investment made by ZEEL in SITI and the entire business and whole
of the undertaking of the transferor Companies i.e. SITI and NEENL have been
transferred to and vested in the Company on appointed date i.e.1st April, 2006
on going concern basis. The assets and the liabilities of DCS undertaking of
ZEEL at book value and of SITI and NEENL at fair value accounted on
Purchase Method as per ‘Accounting Standard- 14’ have been transferred to and
vested in the Company as under:
(Rs. in lacs)
DCS undertaking
of ZEEL
3,204.42
Particulars
Less: Depreciation
Investments
Total Assets (A)
Loan Funds
5.2
Reorganization of Share Capital:-
260
SITI
NEENL
757.24
265.17
475.67
2,728.75
757.24
265.17
-
3,293.48
-
193.64
10.00
-
14,197.14
5,000.00
6,900.00
-
1,057.76
4,248.97
17,119.53
10,118.48
11,414.14
3,263.25
10.70
71.00
0.20
14,353.63
11,244.95
3,263.45
14,364.33
11,315.95
13,856.08
(4,245.85)
98.19
5.2.1
The paid up equity share capital of the Company had been sub-divided on
25th September, 2006 by splitting 71,568,765 equity share of Rs. 10 each
into 715,687,650 equity share of Re. 1 each.
5.2.2
Pursuant to the Scheme following effect are given in the financial statements
for the year ended 31st March, 2007 considering the shareholding pattern
of ZEEL on record date i.e. 20th February, 2007:-
5.2.3
5.3
•
997,203,560 equity shares of Re 1 each fully paid up to be issued in
the ratio of 23 equity shares of Re 1 each fully paid up of the
Company for every 10 equity shares of Re 1 each fully paid up of
ZEEL.
•
Reduction of above equity share capital by way of cancellation of 3
equity shares of Re. 1 each fully paid up for every 4 equity shares
of Re. 1 each fully paid up resulting in final issues of 249,300,890
equity shares of Re. 1 each fully paid up.
•
Pending actual action, the difference on allotment, cancellation,
reduction and issue of Share Capital as above has been taken to the
“Share Capital Suspense”. The actual action has been taken place
during the year ended 31st March, 2008.
The Share capital of the Company Rs. 715,687,650 divided into
715,687,650 equity shares of Re 1 each fully paid up had been reduced by
cancellation of 3 equity shares of Re 1 each fully paid up for every 4 equity
shares of Re 1 each fully paid up. The resultant Share Capital is Rs.
1,789.22 lacs. Pending actual reduction, Rs. 5,367.66 lacs has been taken to
‘Share Capital Suspense’.
Pursuant to the Scheme, surplus Rs. 16,980.97 lacs in the Restructuring Account after
carrying out following adjustments as per the Scheme has been transferred to
General Reserve Account.
5.3.1
The value of net assets of DCS undertaking of ZEEL as reduced by the face
value of equity shares to be issued amounting to Rs.11,363.07 lacs has been
credited to Restructuring Account as prescribed in the Scheme.
5.3.2
The value of net assets/ (liabilities) of SITI and NEENL amounting to (Rs.
4,439.48 lacs) and Rs. 93.20 lacs respectively, as reduced by the
cancellation of the investments amounting to Rs. 193.63 lacs and Rs. 5.00
lacs respectively has been (debited)/credited to Restructuring Account as
prescribed in the Scheme.
5.3.3
Balance in Securities Premium Account and Profit and Loss Account (Debit
Balance) amounting to Rs. 37,282.45 lacs and Rs. 32,685.93 lacs
respectively has been transferred to Restructuring Account.
5.3.4
Reduction in share capital Rs. 5,367.66 lacs has been transferred to
Restructuring Account.
5.4
Pursuant to demerger of DCS undertaking of ZEEL , SITI and NEENL became
wholly owned subsidiaries of the Company and hence upon the merger of the
Subsidiaries with the Company, entire equity share capital of these Companies stand
automatically cancelled and hence there was no issue and allotment of shares of the
Company.
5.5
The transactions of NEENL, SITI and DCS business of ZEEL between the appointed
date and the effective date are deemed to be made on behalf of the Company.
Accordingly, all assets, liabilities, income and expenditure of the demerged
261
undertakings for the said period are taken over by the Company and given effect in
those financial statements.
5.6
6.
The assets, license and agreements etc. transferred pursuant to the Scheme of
Arrangement are in the process of registration/transfer in the name of the Company.
During the financial year ended 31st March, 2007, the Company acquired DTH Equipment
Unit Business (DEU) of Essel Agro Private Limited on a going concern basis vide agreement
to transfer DTH Equipment Unit (DEU) Business dated 31st December, 2006. Pursuant to the
agreement following assets and liabilities have been acquired and are included in these
financial statements. The goodwill arising on acquiring of DEU Business amounting to Rs.
4,511.78 lacs (including purchase consideration Rs. 5.00 lacs) has been treated as intangible
asset.
(Rs. in lacs)
Amounts
15,034.97
214.03
15,249.00
19,755.78
4,506.78
Particulars
Fixed Assets
Total Assets
Net Deficit
7.
Taxes on Income:
7.1
In view of the losses incurred during all the years/period covered in Restated
Summary Statements and brought forward losses, provision for taxation is not
required under the provisions of Income Tax Act, 1961.
7.2
In accordance with the ‘Accounting Standard-22’ on “ Accounting for Taxes on
Income “ issued by The Institute of Chartered Accountant of India, applicable from
period 1st April, 2001, deferred tax assets and liability should be recognized for all
timing difference in accordance with the said standard. However, considering the
present financial position and requirements of the accounting standard regarding
certainty/ virtual certainty, the same is not provided for. The accumulated deferred
tax assets (Net) of the company not taken in accounts based on conservative policy
of the company is as under:(Rs. in lacs)
Three Months
Period ended
June 30, 2008
Particulars
Deferred Tax Assets
Fiscal
allowances
carried
forward
Depreciation
Disallowances under the Income
Tax Act
Total
Depreciation
Total
Deferred Tax Balance Assets
(Net)
8.
Year ended
March 31, 2008
Year ended
March 31, 2007
28,515.82
24,523.68
12,211.92
2,888.65
272.89
1,257.40
256.15
313.99
31,677.36
26,037.23
12,525.91
31,677.36
26,037.23
911.47
911.47
11,614.44
Capital Work in Progress:
Capital Work in Progress comprises of equipments [including customer premises equipment
(CPE)], capital goods in transit, capital advances and pre-operative project expenses ( to be
eventually allocated to fixed assets on commencement of commercial operation ). The CPE
are subject to physical verification and reconciliation.
9.
Others Disclosures:
262
9.1
Exceptional item expensed in the financial year ended 31st March, 2004 represents
provision for doubtful advance Rs. 12,084.30 lacs (including due from a subsidiary
of shareholder Rs. 8277.08 lacs) relating to multi mission satellite system project.
The approval of the Reserve Bank of India is yet to be obtained.
9.2
The expenses under various heads are net of expenses shared with subsidiaries and
other related parties as per arrangement.
9.3
As per advice received and in terms of DTH license agreement, the Company till
March 31, 2008 provided license fee on revenue from DTH subscribers. However
based on recent judgment during August 2008 of Telecom Dispute Settlement &
Appellate Tribunal in the case of one of the DTH service provider, the Company, as
an abundant precaution, has also provided license fee on other revenue accruing from
DTH license related activities for all the past years.
9.4
During the financial year ended March 31, 2005, the Company had granted rights to
distribution, marketing and aggregation (DTH Service) w.e.f. 1st April 2004 for a
lump sum consideration of Rs 410 lac per annum to New Era Entertainment
Network Limited (NEENL) which has been terminated on June 15, 2005. The
Company has provided license fees payable to Pay & Accounts Officer, Ministry of
I & B, New Delhi on the revenue accounted by NEENL from these services.
9.5
As at the balance sheet date, the Company has following foreign currency payable
and receivables which are not hedged by a derivative instrument or otherwise:(Rs. In lacs)
Particulars
Receivables
Payables
9.6
June 30, 2008
Value in
Value
Equivalent
USD $
in Euro
to INR Rs.
Value in
USD $
Value
in Euro
Equivalent
to INR Rs.
4.27
-
182.19
4.02
-
159.18
298.78
-
12,913.20
154.17
0.04
6,192.92
Employee Stock Option Plan –ESOP 2007
The Company instituted the Employee Stock Option Plan – ESOP-2007 to grant
equity based incentives to its eligible employees. The ESOP-2007 (“The Scheme”)
had been approved by the Board of Directors of the Company at their meeting held
on June 28, 2007 and by the shareholders of the Company by way of special
resolution passed at their Annual General Meeting held on August 03, 2007, to grant
aggregating 4,282,228 options ( not exceeding 1% of the issued and paid up equity
share capital of the Company as on March 31, 2007), representing one share for
each option upon exercise by the
employee of the Company at a exercise price determined by the Board/remuneration
committee. The Scheme covers grant of options to the specified permanent eligible
employees of the Company as well as of its subsidiaries and also to non-executive
directors of the Company including independent directors. Pursuant to the Scheme,
the Remuneration Committee during August 2007 and April 2008 has granted
3,073,050 options and 184,500 options respectively to specified eligible employees
of the Company at the market price determined as per the SEBI Guidelines.
The options granted under the Scheme shall vest not less than one year and not more
than five years from the date of grant of options. Under the terms of the Scheme,
20% of the options will vest in the employee every year equally. The Option grantee
must exercise all vested options within a period of four years from the date of
vesting. Once the options vest as per the Scheme, they would be exercisable by the
263
Option Grantee at any time and the shares arising on exercise of such options shall
not be subject to any lock-in period.
Period ended
June 30, 2008
2,926,150
184,500
1,227,100
1,883,550
Year ended
March 31, 2008
3,073,050
146,900
2,926,150
The above Options have been granted at the market price as defined under the SEBI
Guidelines, hence there being no intrinsic value (being the excess of the
market
price of share under ESOP over the exercise price of the option) on the date of grant,
therefore Company is not required to account for the accounting value. The
Shareholders and Remuneration Committee in their respective meeting, held on
August 28, 2008 have approved re-pricing of stock options.
10.
9.7
Previous year’s Figures have been regrouped wherever necessary.
9.8
Debit and Credit balances of parties including of subscribers, distributors and
dealers’ are subject to confirmation/ reconciliation and effect if any, will be
considered on its determination.
Contingent Liabilities Not Provided For:
10.1
(Rs. in lacs)
Particulars
Estimated
amount of
contract
remaining to be
executed on
capital account
(Net of
advance)
Bank guarantees
given on behalf
of subsidiaries.
Guarantees
given on behalf
of other
company.
Guarantees
given by bank
on our behalf
(Above includes
guaranteed by a
related party)
Claim against
the Company
not
acknowledged
as debt
Legal Cases
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Year ended
March 31,
2007
Year ended
March 31,
2006
Year ended
March 31,
2005
Year ended
March 31,
2004
2,864.17
3,335.92
3,077.22
1,754..86
-
-
-
-
-
40.00
140.00
440.00
-
-
240.00
-
500.00
500.00
5,046.15
5,046.15
4,001.05
4,000.00
4,000.00
4,000.00
4,908.60
4,908.60
4,000.00
4,000.00
4,000.00
4,000.00
448.40
448.40
-
-
-
-
264
Particulars
Three Months
Period ended
June 30, 2008
Year ended
March 31,
2008
Year ended
March 31,
2007
Year ended
March 31,
2006
Year ended
March 31,
2005
Year ended
March 31,
2004
against the
company.
11.
10.2.
The Entertainment Tax Authorities, Noida has raised a demand of Rs. 404.60 Lacs on
account of entertainment tax for the period from November, 2003 to February,
2004. The Company has filed petition against the demand, which is pending. Further,
the authorities have intimated a total demand of Rs. 920.20 lacs till 31st March,
2007.
10.3
Entertainment Tax demand Rs. 116.75 lacs (estimated on the basis of various notices
issued from time to time) raised by various entertainment tax authorities of
Utrakhand state have been challenged and the petition is pending before the High
Court. The demand has been stayed by the High Court. Notice for further period has
been issued wherein the demand has not been quantified.
10.4
The Company has given a guarantee for the performance of the term and conditions
of satellite capacity agreement between a subsidiary of the company namely Agrani
Satellite Services Limited and the vendor, which is strategically important for the
business of the Company.
Operating Lease:
11.1
In respect of assets taken on operating lease:
The Company’s significant leasing arrangements are in respect of operating leases
taken for offices, residential premises, transponder etc. These leases are cancelable/
non-cancelable operating lease agreements that are renewable on a periodic basis at
the option of both the lessee and the lessor. The initial tenure of the lease generally is
for 11 months to 120 months. The detail of assets taken on operating lease is as
under:(Rs. in lacs)
Particulars
Three Months
Year
Year
Year
Year
Year
Period ended
ended
ended
ended
ended
ended
June 30, 2008 March 31, March 31, March 31, March 31, March 31,
2008
2007
2006
2005
2004
Lease
rental
charges for the
1,443.31
4,364.37 4,034.24 3,688.07
period (net of
shared cost)
Not later than one
year
Later than one
year but not later
than five years
More than five
years
11.2
1,984.76
423.53
432.51
392.42
1,411.19
3,526.76
-
-
1,130.86
1,161.20
70.60
1,469.49
-
-
-
-
-
-
-
-
In respect to assets given on operating lease
The Company has leased out assets by way of operating lease. The gross book value of such
assets, its accumulated depreciation, depreciation and lease rental income for the period is as
given below:(Rs. in lacs)
Particulars
Three Months
Period ended
Year ended
March 31,
265
Year ended
March 31,
Year ended
March 31,
Year ended
March 31,
Year ended
March 31,
June 30, 2008
2008
2007
Lease
Rental
2,141.23
6,728.87
2,731.55
Income
Gross Value of
76,526.34
69,117.47
47,219.24
the Assets
Accumulated
21,011.17
17,156.83
4,600.02
Depreciation
Depreciation for
3,854.34
12,556.81
4,460.91
the period
Future Lease Rental Receivable (Under non-cancelable lease)
Not later than one
8,229.09
7,371.79
4,556.00
year
Later than one
year but not later
20,102.41
19,639.27
14,475.65
than five years
More than five
Year
12.
2006
2005
2004
35.10
-
-
4,956.51
190.05
-
139.11
19.65
-
119.46
19.65
-
231.12
-
-
4,382.54
-
-
-
-
-
Auditors qualifications and Remarks:
12.1
12.2
12.1.1
The auditors have qualified the report for the financial year ended 31st
March, 2004 and 2005 for non recoverable advances aggregating to Rs.
12,284.30 lacs included in other advances due from foreign companies as a
part of the project taken over. Accordingly, adjustments are made to the
financial statement, as restated for the year ended 31st March, 2004 to
account for the loss of Rs. 12084.30 lacs on such advance and balance Rs.
200.00 lacs recovered.
12.1.2
March 2004, 2005 and 2006 regarding carrying value of investment in
subsidiaries. The carrying value of investment in subsidiaries as at 31st
March, 2006 is aggregating to Rs.10,687.15 lacs. Accordingly, adjustments
for Rs. 1,247.05 lacs are made to the statement of financial statement, as
restated for the year ended 31st March, 2004 to account for the loss on
permanent diminution in the value of investment. Balance Rs. 9,440.10 lacs
is considered good and recoverable based on the subsequent event for the
project under implementation undertaken by the subsidiary and also in view
of long term involvement and relation with the subsidiary.
Other audit qualification / remarks, which do not require any corrective adjustment
in the financial information are as follows:
12.2.1
March 2004, 2005 and 2006 regarding recoverability of loans and advances
to subsidiaries and other companies. Loans and advances outstanding (due
from subsidiaries) as at 2006 is aggregating to Rs. 3,275.34 lacs. The said
loans and advance is considered good and recoverable based on the
subsequent event for the project under implementation by the subsidiary and
also in view of long term involvement and relation with the subsidiary.
12.2.2
March, 2004, 2005 and 2006, that the Company has given interest free loans
given to certain companies, which are not in accordance with provision of
sub section (3) of section 372 A of the Companies Act, 1956.
12.2.3
March, 2004 and 2005 for not providing exchange difference loss of Rs
1,029.05 and Rs. 1072.79 lacs respectively as required by AS -11 on
266
realignment of foreign exchange advances Rs. 12,284.30 lacs. The Company
has not adjusted the same in restated account as the loss on such advance in
foreign exchange is fully provided in the accounts (Refer Note 12.1.1).
12.2.4
March, 2007, for the managerial remuneration amounting to Rs. 12.94 lacs
paid to managing director pending approval of Central Government. The
Company has not adjusted the restated account as subsequently approved by
the Central Government.
12.2.5
The auditors in their audit report for the financial year ended 31 March
2007, has drawn reference to note on preparing the financial statements on
going concern basis.
12.2.6
Auditors comment under MAOCARO 1988/ CARO 2003
Fixed Assets:• In the financial year ended 31st March, 2006 and 2007, auditors have
reported that there is a phased program of Physical verification of fixed
assets except for consumer premises equipments installed at the customers
premises, which is reasonable having regard to the size of the Company
and nature of its assets. Pursuant to the program, the physical verification
of certain assets was carried out during the period. The reconciliation of
the fixed assets physically verified with the books is in progress and
• In the financial year ended 31st March, 2008, auditors have reported that
the fixed assets, except consumer premises equipments installed at the
customer premises have been physically verified by the management as
per the phased program of verification and no discrepancies were noticed
on such verification.
•
Interest free loan granted to parties covered u/s 301 of the Companies Act,
1956:In the financial year ended 31st March, 2005 and 2006, the auditors have
reported, that the Company has granted interest free unsecured loans to
companies covered in the register maintained under section 301 of the Act.
The maximum amount involved during the financial year ended 31st March,
2006 and 2005 was Rs. 50.73 crores and Rs. 69.12 crores respectively and
outstanding balance as at 31st March 2006 and 2005 was Rs. Nil and Rs.
50.73 crores respectively. Further in financial year ended 31st March, 2007
auditor has reported that loans given to parties covered in the register
maintained u/s 301 of the Companies Act, 1956, aggregating to Rs. 12.40
Crores are provided at the interest rate prejudicial to interest to the
Company.
Internal Audit:In the financial year ended 31st March, 2007, auditors have reported that the
Company has an internal audit system commensurate with its size and
nature of its business. However, the same needs to be strengthened as regard
scope and periodicity.
Statutory Dues:• In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008
auditors have reported that the Company is regular in depositing
undisputed statutory dues including, investor education and protection
267
fund, employees state insurance, income tax, sales tax, wealth tax, custom
duty, excise duty, cess, provident fund and other statutory dues, wherever
applicable, with appropriate authorities except delay in few cases.
• In the financial year ended 31st March 2007 and 2008. The auditors have
reported that, there is no dues of Income Tax, Sales Tax, Custom Duty,
Wealth Tax, Excise Duty and Cess which have not been deposited on
account of any dispute except the following:
(Rs. In lacs)
Name of Statue
Utter Pradesh
Entertainment &
Betting Tax Act,
1979
Utter Pradesh
Entertainment &
Betting Tax Act,
1979 (As
Applicable to
Uttarakhand)
Nature of dues
Period to
which
pertain
Forum
where
dispute is
pending
Amount
stand as at
31st March,
2008
Amount
stand as at
31st March,
2008
Entertainment
Tax
2003-2004
to 20062007
Allahabad
High Court
920.20
920.20
Entertainment
Tax
2003-2004
to 20062007
High Court
of
Uttarakhand
88.36
-
Accumulated losses:-
In the financial year ended 31st March, 2004, 2005, 2006, 2007 and 2008, auditors
have reported that the accumulated losses (without considering audit qualifications)
are more than fifty percent of its net worth. Further, the Company has incurred cash
losses in all the above financial years.
In the financial year ended 31st March, 2004, 2005 and 2008 auditors have
reported, default in repayment to financial institutions / banks as under:-
(Rs. in lacs)
Particulars
During the year ended 31st
March 2004
Banks
March 2005
Banks
March 2008
Axis Banks
Axis Banks
Axis Banks
IDBI Banks
Principal
Interest
Period of default
50.00
-
1.56
45.06
1-3 Month
1-2 Month
1,000.00
126.53
1-30 Days
3,750.00
500.00
3,250.00
-
65.49
31 days
16 days
28 days
23 days
Fund utilization:-
In the financial year ended 31st March, 2004, 2007 and 2008 auditors have reported
that the company has used short term funds amounting to Rs. 2,479.50 lacs, Rs.
51,626.07 lacs and 25,300.93 lacs respectively for long term investments.
12.3
12.3.1
For the financial year ended 31st March, 2004, the Company did not form an
audit committee of its Board of Directors as required under section 292A of
the Companies Act, 1956.
268
12.3.2
D).
For the financial year ended 31st March, 2004 and 2005, the Company did
not have a whole time company secretary as required under section 383A of
the Companies Act, 1956.
1.
The Company adopted the revised ‘Accounting Standard 15(R)’ on employees Benefits effective
from 1 April, 2006. Pursuant to the adoption, the incremental liability at the beginning of the
year in respect to Gratuity and Leave Encashment has been adjusted against general reserve as
provided in the Standard and accordingly no adjustment is made in previous years.
2.
Below mentioned is the summary of results of restatement made in the audited accounts for the
respective years and its impact on the profit or loss of the Company:
(Rs. In lacs)
Particulars
Prior Period
Items
Diminution in
value of
investments
Provision for
doubtful
advances
(Exceptional
items)
Sales/VAT
Demand
Pre-operative
Expenses
Licenses fees
Reference
to Note
given in
Para D
For the three
months period
June 30, 2008
For the
year ended
March 31,
2008
For the
year ended
March 31,
2007
For the
year ended
March 31,
2006
For the
year ended
March 31,
2005
For the
year ended
March 31,
2004
3(a)
-
(164.61)
106.63
48.87
9.10
-
3(b)
-
-
(1,247.05)
-
-
1,247.05
3 (c)
-
-
-
(12,084.30)
-
12,084.30
3(d)
-
(220.90)
220.90
-
-
-
3(e)
-
-
-
-
(407.08)
381.09
3(f)
Total
3.
(756.73)
127.20
374.61
65.47
134.80
54.64
(756.73)
(258.31)
(544.91)
(11,969.96)
(263.18)
13,767.09
OTHER ADJUSTMENTS
a)
PRIOR PERIOD ADJUSTMENTS
During the three months ended 30 June, 2008 and financial year ended 31 March, 2006, 2007
and 2008 certain items of income/expenses have been identified as prior period items. For the
purpose of this statement, such prior period items have been appropriately adjusted in the
respective years.
b)
DIMINUTION IN VALUE OF INVESTMENTS
During the financial year ended 31 March 2006, the Company has provided for diminution in
the value of investment in the subsidiary. The auditors had qualified their report for the
financial year ended 31 March 2004 and 2005 hence the amount has been appropriately
adjusted in the financial year ended 31 March 2004.
c)
PROVISION FOR DOUBTFUL ADVANCES
During the financial year ended 31 March 2006, the Company has made provision for
doubtful advances. The auditors had qualified their report for the financial year ended 31
March 2004 and 2005 hence the amount has been appropriately adjusted in the financial year
ended 31 March 2004.
269
d)
During the three months period ended 30th June 2008 and financial year ended 31 March, 2008
the Company provided for Sales Tax/Vat demand raised. For the purpose of this statement,
such demands have been appropriately adjusted in the respective years.
e)
PRE-OPERATIVE EXPENSES
During the financial year ended 31 March, 2004 and earlier years the Company incurred
certain expenditure on promoting and implementing DTH project and C band Teleport project
and also incurred expenses on trial run. These expenses were treated as pre-operative expenses
to be allocated to fixed assets or treated otherwise on commencement of commercial
operation. However in the financial year ended 31 March, 2005, these expenses were charged
off to profit and loss. In the restated summary statements these expenses are appropriately
adjusted in respective years in which the same were originally incurred. The adjustments
pertaining to financial year ended on or before 31 March 2003 are adjusted in the opening
balance in Profit & Loss account as at 1st April 2003.
f)
As per advice received and in terms of DTH license agreement, the license fee was
being provided on revenue from DTH subscribers. However based on recent judgment of
Telecom Dispute Settlement & Appellate Tribunal in the case of one of the DTH service
provider , the Company , as an abundant precaution, has also provided license fee on other
revenue accruing from DTH license related activities. The Additional license fee of Rs. 756.73
lacs is provided for past years. According in the restated summary statements these expenses
are appropriately adjusted in respective year to which revenue pertains.
g)
PROFIT AND LOSS ACCOUNT AS AT APRIL, 2003
(Rs. In lacs)
Reference to Note
No.
Particulars
Profit/(Loss) as per Audited Statement
March 31, 2003
(9,036.87)
Adjustment :
Pre-Operative Expenses
4.
3(e)
25.99
(9,062.86)
MATARIAL REGROUPING
a)
Upto the financial year ended 31 March 2004, interest received was shown under the
head Income but from the financial year ended 31 March 2005, the same is being
shown under the head financial charges as separate item and net balance (financial
charges minus interest received) is taken in main profit and loss account. However in
the Restated Summary Statement of Profit and Loss the interest income is shown
under the head ‘Other Income’.
b)
During the financial year ended 31 March 2005 and 2006, license fee amortized was
grouped under the head ‘Operating Expenses’ but from the financial year ended 31
March 2007, the amortized amount is regrouped under the head
“Depreciation/Amortization’. In the Restated Summary Statement of Profit and Loss
for the financial year ended 31 March 2005 and 2006 the amortized amount is
regrouped and shown accordingly.
c)
In the financial statements for the year ended 31 March 2006, Rs. 200 lacs were
shown as investment under the head ‘Investments’. However in the financial
statements for the year ended 31 March 2007, the same has been regrouped under
Other Advances. In the Restated Summary Statement of Assets and Liabilities for
the financial year ended 31 March 2006 the same is regrouped and disclosed
accordingly.
270
d)
During the financial year ended 31 March 2004, teleport income was grouped under
Other Income. Based on regrouping of the income under Sales and Services during
the financial year ended 31 March 2005 and onward, in the Restated Summary
Statement of Profit and Loss the same is regrouped and disclosed accordingly.
e)
During the financial year ended 31 March 2007, Other DTH Revenue was grouped
under ‘Other Income’. Accordingly in the Restated Summary Statement of Profit and
Loss the same is regrouped as Other DTH Revenue.
f)
During the financial year ended 31 March 2006, credit balance of a loan written off
was shown as Exceptional Item which in the Restated Summary Statement of Profit
and Loss has been regrouped under the head “Other Income’.
g)
During the financial year ended March 31, 2008 income from Bandwidth charges
was grouped under ‘Other Income’. However in the financial statement for the three
month period ended 30 June 2008, the same is regrouped under ‘Sales and Services’
as separate item. Hence in the Restated Summary Statement of Profit and Loss the
same is regrouped and disclosed accordingly.
Other
1.
Unusual or infrequent events or transactions
Except as described in this Letter of Offer, particularly “History of the Company and Other Coporate
Matters” section, there have been no other events or transactions that, to our knowledge, may be
described as “unusual” or “infrequent”.
2.
Known trends or uncertainties
Except as described in “Risk Factors”, “Management’s discussion and Analysis of Financial Condition
and Results of Operations” and elsewhere in this Letter of Offer, to our knowledge, there are no known
trends or uncertainties that are expected to have a material adverse impact on our revenues or income
from continuing operations.
3.
Future Relationship between cost and income
There are no known factors that will have material adverse impact on our cost and income. Except as
described in “Risk Factors”, “Our Business”, “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations”, to our knowledge there are no known factors that will have a
material adverse impact on our cost and income.
4.
Competitive Conditions
The Company’s business plan faces a direct competition from Analouge Cable Operators, Digital
Cable, IPTV and other DTH operators like Big TV, TATA Sky, Airtel Digital TV and Sun Direct .
Please refer to the sections titled “Risk Factors”, “Our Business - Competition”, “Industry” in Letter of
Offer for discussion regarding Competition.
5.
Significant Economic Changes
Please refer to “Risk Factors”, in Letter of Offer for discussion regarding Economic changes and
conditions.
6.
Seasonal Nature of Business
Our business is not seasonal. For further details please refer to “Risk Factors”, “Our Business”, and
“Management’s Discussion and Analysis of Financial Conditions and Results of Operations”.
7.
Dependence of Revenue on increase in contracts executed
271
Major growth in sales is dependent upon increase in the number of subscriber of the Company.
8.
New Products or Business Segment
Our Company is primarily engaged in the business of providing DTH & Teleport services. We are
currently not contemplating to enter any new business segment.
9.
Dependence on single or few suppliers or customers
Our Company is primarily engaged in the business of providing DTH & Teleport services and therefore
it is not dependent on single customer. Except as described in “Risk Factors”, we are not dependent on
any single supplier or customer.
10.
Total Turnover of Major Industry Segments
Our Company is primarily engaged in the business of providing DTH & Teleport services.
Accordingly, Business segments have been determined & reported in accordance with AS-17.
272
Information as required by Government of India, Ministry of Finance, Circular No. F2/5/SE/76 dated
February 5, 1977 as amended vide their circular of even number dated March 8, 1977 is given below:
1. Working Results of the Company
Unaudited financial information for the six months ended September 30, 2008:
Particular
Total Sales
Other Income
Total Income
PBDIT
Interest
Provision for Depreciation
Profit/(Loss) Before Tax
Provision for Tax
Estimated /(Loss)Net Profit
Rs. (Lakhs)
33,773.70
499.11
34,272.81
(14,904.21)
3,611.24
9,403.31
(27,918.76)
36.25
(27,955.01)
2. Save as stated elsewhere in the Letter of Offer, there are no material changes and commitments, which are
likely to affect the financial position of the Company since September 30, 2008
3. a) Week end prices of Equity Shares of the Company for the last four weeks on the BSE and NSE are as
below:
Week Ended on
November 14, 2008
November 7, 2008
October 31, 2008
October 24, 2008
Closing Rate BSE (Rs.)
16.11
16.97
14.65
13.95
Closing Rate NSE (Rs.)
16.10
17.05
14.75
14.00
The closing Price of the Equity Shares of the Company on the BSE and NSE on October 16, 2008 was Rs. 18.20
equity share and Rs. 18.25 per equity shares (ex-rights Price) respectively.
Defaults in the payment/refunds of debentures, fixed deposits, interest on fixed deposits, debenture
interest and institutional dues
There are no defaults, non-payment/ overdues of statutory dues, institutional/Company dues and dues towards
holders of debentures, bonds and fixed deposits and arrears of preference shares, etc, other than unclaimed
liabilities of the Company, its subsidiaries, its other ventures, promoters, Group companies and companies
promoted by the promoter.
273
FINANCIAL INDEBTEDNESS
Our long term major secured borrowings on a standalone basis as on September 30, 2008 are as follows:
Name of the
Lender
Axis Bank
Limited
ICICI Bank
Limited
(“ICICI”)
Facility granted and loan
documentation
Facility agreement dated
March 21, 2007 for grant
of an overdraft limit of Rs.
8,00,00,000 for working
capital requirements and a
letter of credit for Rs.
8,00,00,000
for
import/domestic purchase
of set-top boxes and other
capital goods
Credit arrangement letter
dated April 9, 2008
Amount
outstanding
Rs. 750.09
Lakhs
Rs. 7,730.89
Lakhs
April 24, 2008 for grant of
working capital facilities
with the overall limit not
exceeding Rs. 8,000 lakhs
ICICI
Terms of
repayment
Payable on
demand
-
LIBOR+
1.15%
p.a for
buyer’s
credit for
maturity
more
than one
year but
less than
three
years
Deed of hypothecation
dated April 24, 2008
Letter of amendment
dated August 29, 2008
amending the facility
agreement dated April 24,
2008 so as grant ICICI the
right to cancel the
outstanding
un-drawn
commitments inder the
facility at any tim,e during
the currency of the facility
with prior intimation to
our Company and the right
to cancel the outstanding
un-drawn commintment in
the event of deterioration
in
our
Company’s
creditworthiness
Credit arrangement letter
dated February 18, 2008
sanctioning
working
capital
facilities
not
exceeding Rs. 6,000 lakhs
(and a non-fund based
credit of Rs. 6,000 lakhs)
to the Company
Rate of
interest
2%
below the
bank’s
prime
lending
rate, that
is, 12%
p.a.
payable
monthly
0.75%
p.a. as
commissi
on for
letter of
credit
Security created
First
pari
passu
hypothecation charge on
moveable fixed assets of
the Company
Shares of ZEEL/Essel
Propack Limited, with a
cover of 1.20 times over
the entire outstanding
exposure
First charge ranking pari
passu
with
other
participating banks on the
whole of the Company’s
stocks of raw materials,
goods in process, semifinished
and
finished
goods, consumable stores
and spares and such other
moveables including book
debts,
bills,
whether
documentary or clean, both
present
and
future,
moveable both present and
future, receivables both
present and future and
equipments both present
and future
Corporate
ZEEL
Rs. 6,000
lakhs
February 19, 2008
dated February 19, 2008
in favour of 3i Infotech
Trusteeship
Services
Limited as the security
trustee
Amendatory
credit
arrangement letter dated
274
LIBOR +
1.15%
p.a. for
maturity
of more
than one
year but
less than
three
years
The
Company’s
credit facility
can
be
extended for a
period
of
three
years
and the letter
of
credit
usuance
period
is
restricted upto
one year. The
rate of interest
of the credit
facility
is
LIBOR + 50
basis points
for maturity
upto one year
and LIBOR +
guarantee
of
First charge by way of
hypothecation
of
the
Company’s entire stock of
raw
materials,
semifinished
and
finished
goods, consumable stores,
capital goods and spares
and such other movables
including book-debts, bills
whether documentary or
clean, outstanding monies,
receivables, both present
and future, in a form and
manner satisfactory to
ICICI, ranking pari passu
with Axis Bank and
Corporate
ZEEL
Guarantee
of
Name of the
Lender
documentation
April 9, 2008
Amount
outstanding
Rate of
interest
Terms of
repayment
125
basis
points
for
maturity
of
more than one
year and less
than
three
years
Security created
12.75%
p.a. on
the
outstandi
ng amont
of the
facility
shall be
payable
at
monthly
rests
commenc
ing from
the end
of the
first
drawdow
n of the
facility,
on the
last
business
day of
each
month
Our Company
shall
repay
the principal
amounts
of
the facility in
16
equal
quaterly
instalments,
commencing
from the date
occurring at
the beginning
of the 39th
month of the
date of the
rupee facility
agreement,
with the last
of
such
instaments
being payable
on earlier of
either the date
specified in
the
‘prepayment
notice’
(in
case
of
prepayment in
full of the
outstanding
facility) or the
seventh
anniversary of
the date of the
rupee facility
agreement.
- first ranking charge by
way of mortgage in favour
of the Security Trustee
over all the immoveable
assets of our Company,
present and future
- a charge by way of
hypothecation in favour of
the Security Trustee over
(i) all the moveable asstes
of our Company, present
and future; (ii) the balances
lying in and to the credit of
the Accounts and the
proceeds
of
any
investments made out of
the said balances, and (iii)
all the rights, title, interest
of our Company in all
contracts, authorizations,
approvals and licenses,
including the DTH license
and the insurance policies
relating to the business of
our Company
Letter of amendment
dated April 9, 2008
agreement dated February
19, 2008 to grant a letter
of credit facility for Rs.
6,000 lakhs
Standard
Chartered Bank,
Central Bank of
India and Dena
Bank (the
“Consortium”)
Letter of amendment
dated August 12, 2008
agreement dated February
19, 2008 so as grant ICICI
the right to cancel the
outstanding
un-drawn
commitments inder the
facility at any tim,e during
the currency of the facility
with prior intimation to
our Company and the right
to cancel the outstanding
un-drawn commintment in
the event of deterioration
in
our
Company’s
creditworthiness
Rupee facility agreement
dated July 10, 2008
between our Company, the
Consortium and IDBI
Trusteeship
Services
Limited
(“Security
Trustee”) for the grant of
a facility of Rs. 19,000
lakhs with an option of
availing upto Rs. 30,000
lakhs from any bank or
financial institution from
time to time within a
period of one year from
the date of the rupee
facility agreement
Rs. 18,407
Lakhs
Security trustee agreement
dated July 10, 2008
between the Consortium,
our Company and the
Security Trustee
dated July 10, 2008
between our Company
and IDBI Trusteeship
Services Limited
For
disburse
ments
made
after a
period of
three
months
from the
date of
the rupee
Undertaking dated July
10, 2008 issued by ZEEL
in favour of the Security
Trustee to ensure abidance
with the rupee facility
agreement
by
our
Company
275
Name of the
Lender
documentation
Amount
outstanding
Rate of
interest
facility
agreemen
t, the
interest
rate shall
be
calculate
d on the
basis of
the
following
:
weighted
average
of the
concerne
d
lender’s
PLR
(“ALPL
R”)
minus the
differenc
e of the
ALPL
and
12.75%,
or
- the
concerne
d
lender’s
PLR
(LPLR)
minus the
differenc
e of
LPLR
and
12.75%,
or
- the rate
applicabl
e to one
year GoI
securities
beid
yield or
the one
year
AAA
corporate
bond bid
yield (the
“Yeild”)
plus the
differenc
e of
12.75%
and the
Yeild
In case of
default of
276
Terms of
repayment
Our Company
may prepay
such portion
of the facility
in part or in
full on any
date occurring
at the end of
the
first,
second, third,
fourth, fifth or
sixth
anniversary of
the
rupee
facility
agreement,
together with
interests,
costs, charges
and expenses
accrued
thereon,
without any
prepayment
premium or
penalty and
by providing
a notice of no
later than 10
business days.
In the event
our Company
realizes
amounts
in
excess of Rs.
2,000 lakhs
each from the
sale of assets
or insurance
claims or in
excess of Rs.
8,000 lakhs in
the 12 months
preceding an
interest
payment due
date,
our
Company
shall
mandatorily
prepay all or
part of the
facility
together with
interests,
costs, charges
and expenses
accrued
thereon,
without any
prepayment
premium or
penalty and
by providing
a notice of no
Security created
Name of the
Lender
Bank of India
(“BoI”)
documentation
Facility sanction letter
dated September 11, 2008
for the grant of a term loan
of Rs. 7,500 lakhs
Amount
outstanding
Rs. 7,500
Lakhs
Deed of accession dated
September 15, 2008 by
BoI in favour of our
Company for the facility
of Rs. 7,500 lakhs
Deed of accession dated
September 15, 2008 in
favour of the Security
Trustee for the facility of
Rs. 7,500 lakhs
Rate of
interest
payment,
our
Company
shall be
liable to
pay an
additiona
l interest
of 2%
12.75%
p.a. with
monthly
rests for
the first
year. In
addition,
our
Company
shall pay
upfront
1.25%
p.a. for
the first
year. The
interest
rate shall
be reset
on July
10 of
each year
which
will be
BoI’s
BPLR
ruling on
the date
of reset
less the
margin
Terms of
repayment
later than 10
business days
Security created
To be repaid
in 16 equal
quaterly
installments
commencing
39
months
from July 10,
2008
First pari passu charge on
project fixed (moveable
and immoveable) and
current assets
Assignment of contracts
relating to transponder
capacity etc. if assignable
or a negative lien if
contracts are not assignable
Plegde of proceeds account
and reserves account which
shall be a minimum
balance equal to the
minimum reserves account
Assignment
of
all
government authorizations,
licenses/ insurance policies
etc
Material Covenants: The loan agreements provide for certain negative and restrictive covenants that are
summarized below:
It is provided in the facility agreement with Standard Chartered that our Company would be allowed to
drawdown only such amount in a tranche such that after the drawdown the senior debt to cash equity
ratio of 0.40:0.60 is achieved.
It is provided in the facility agreement with Standard Chartered that pre-payment penalty at the rate of
1% would be charged in the event the pre-payment of the loan amount is made on any date except the
Interest Reset Date, which is date falling at the end of four months from the draw down and every
month thereafter.
It is provided in the facility agreement with Standard Chartered that in the event our Company is not
able to arrange for a syndicated financial commitment up to an amount of Rs. 26,000 lakhs on or before
April 30, 2008, the Company shall have to mandatory pre-pay an amount of Rs. 4,000 lakhs together
with all interests and charges on July 31, 2008 or the date at the end of six months from the date of first
drawdown.
It is provided in the facility agreement with Standard Chartered that our Company would open a
proceeds account where all amounts and proceeds relating to gross revenue or equity contribution, debt
or amount received from indemnity or damages from contracts in connection with our Company’s DTH
business and any amount received with respect to insurance proceeds would be deposited. Standard
Chartered would have pledge on that account and our Company can withdraw any money from such
proceeds account only for certain purposes as prescribed under the facility agreement.
277
It is provided in the facility agreement with Standard Chartered that the Company should ensure that all
shareholders’ loans or funds infused by ZEEL is subordinated to the Company’s obligation under the
facility agreement and not repaid out of any funds other than proceeds of any fresh issue of equity by
the Company.
It is provided in the facility agreement with ICICI that upon the occurrence of any default and the
continuance thereof for a period of 30 business days by the Company, ICICI may direct the Company
to convert the whole or such part of the amount outstanding to ICICI into fully paid-up equity shares at
the market rate prevalent on the date of such conversion, or at par value whichever is lower, from the
date and in the manner specified in writing by ICICI to the Company and in accordance with applicable
laws. It has been further provided that
o
The conversion right reserved may be exercised by ICICI on one or more occasions during the
currency of the facility.
o
On receipt of notice of conversion, ICICI shall allot and issue requisite number of fully-paid
up equity shares to ICICI as from the date of conversion as specified in such notice and ICICI
may accept the same in satisfaction of the part of relevant outstanding amount.
o
The portion of the outstanding amount so converted shall cease to carry interest as from the
date of conversion and the outstanding amount shall stand correspondingly reduced. The
Company shall, at all times, maintain sufficient un-issued equity shares for this purpose.
It is provided in the facility agreement with ICICI that the Company shall ensure that additional equity
between Financial Years 2008-2011 shall be as under.
Financial Year
Amount (Rs. lakhs)
2008
2009
2010
2011
39,000
15,000
10,000
10,000
It is provided in the facility agreement with ICICI that the Company would not redeem and any foreign
currency convertible bonds until full repayment of all amounts outstanding under the facility.
It is provided in the letter of amendment dated August 29, 2008 amending the facility agreement dated
April 24, 2008 with ICICI that our Company shall get itself rated by a credit rating agency within a
period of six months and at such intervals as decided by ICICI, failing which ICICI shall have the right
to review the applicable interest rate and/or costs, charges and expenses, which shall be payable by our
Company and on such date or within such period as may be specified by ICICI.
It is provided in the facility agreement with ICICI that the Company would arrange an additional debt
of Rs. 30,000 lakhs before September 30, 2008.
It is provided in the facility agreement with ICICI that the Company would maintain a ratio of 1:1 for
any additional incremental debt to equity during the tenure of the facility and until full repayment of all
amounts outstanding. Further, the Company would not withdraw any incremental infusion by way of
loans and advances from the Promoters during the currency of the facility and until full repayment of
all amounts outstanding.
It is provided in the facility agreement with ICICI that the Company shall not give any incremental
loans or advances or investments to its Subsidiaries without the prior consent of ICICI during the
tenure of the facility and until full repayment of all amounts outstanding.
It is provided in the facility agreement with ICICI that any shortfall in the value of insurance cover of
the Company shall be covered immediately by the Company or by ICICI by debiting the Company’s
operative account with ICICI.
It is provided in the facility agreement with Standard Chartered Bank granting a letter of credit for Rs.
23,000,000 that the facility should be utilized only for the purpose for which it is granted and if, in the
opinion of the bank, the facility is not being used for such purpose, the bank shall have the right to
demand repayment and to withdraw the facility.
It is provided that the Company shall not make any material amendments to its Memorandum and
Articles without the prior written consent of Standard Chartered Bank and the Consortium.
It is provided that the Company shall not use all or any part of the facility for investments into capital
market oriented mutual fund schemes including, without limitation, equity/real estate mutual funds.
It is provided in the facility agreement with Axis Bank Limited that the Company can not divert the
working capital funds for long-term purposes.
It is provided in the rupee facility agreement with the Consortium that our Company shall open an
account, known as the Reserve Account with Standered Chartered Bank, New Delhi branch (“Account
Bank”) for the purposes of maintaining an amount equal to three months payments of the interest and
278
principal on the outstanding facility or an amount equal to six months payments pf principal and
interest on the outstanding facility. It has also been provided that our Company shall open an account
known as the Proceeds Account with the Account Bank where, inter alia, all disbursements of our
Company shall be directly deposited by our Company.
It is provided in the rupee facility agreement with the Consortium that our Company would grant the
Consortium and their appointed representatives, unrestricted access to review the books and records of
the account book in relation to the Reserve Account and the Proceeds Account and shall instruct the
Account Bank to deliver to the Consortium copies of all bank statements in respect of the Reserve
Account and the Proceeds Account at the same time as sent to our Company.
It is provided in the rupee facility agreement with the Consortium that our Company shall ensure that
all shareholder loans or funds infused by ZEEL is subordinated to its obligations under the agreement
and not repaid out of any funds other than the proceeds of any fresh issue of equity by our Company.
It is provided in the rupee facility agreement with the Consortium that our Company shall maintain a
‘senior debt’ (defined as all obligations of our Company excluding shareholder loans or funds infused
by ZEEL) to contributed equity (sum of the share capital, reserves and surplus of our Company as on
March 31, 2007 and the cash equity) of 44:55 at all times during the pendency of the agreement.
It is provided in the rupee facility agreement with the Consortium and the sanction letter issued by
BoIthat our Company shall ensure that ‘senior debt’ EBITDA (defined as total operating profit,
including other income but excluding extraordinary income and any share of the profit of any
associated company or undertaking, except for dividends received in cash, but before taking into
account gross interest expense, tax, depreciation, amortization and write-off of other extraordinary
expenses) ratio does not exceed 3.0 at all times. Also, our Company shall ensure that the debt service
coverage ratio and the interest service coverage ratio shall at all times be at least 1.4.
It is provided in the rupee facility agreement with the Consortium that our Company shall not enter into
any amalgamation, de-merger, merger or reconstruction without the prior written consent of the
Consortium nor shall our Company enter into any arrangement of litigation for any amount which in
the opinion of the Consortium would materially and adversely affect our Company’s ability to pay any
amounts due under the facility documents.
It is provided in the rupee facility agreement with the Consortium that our Company shall not declare
or pay dividend without the prior written consent of the Consortium and that it shall not sell, grant or
lease or otherwise dispose of all or substantial part of its assets without the prior written consent of the
Consortium, except in its ordinary course of business.
It is provided in the rupee facility agreement with the Consortium that our Company shall not in any
financial year, incur any capital expenditure in excess of 20% over the amounts approved under the
financial model based on our Company business plan for its business as mutually agreed to between the
Company, Veena Investments Private Limited, Afro-Asian Satellite Communications Limited, Jayneer
Capital Private Limited, Churu Trading Company Private Limited, Ganjam Trading Company Private
Limited, Premier Finance and Leasing Limited, Prajatma Trading Company Private Limited, Delgrada
Limited (collectively, referred to as the “Sponsors”) and the Consortium.
It is provided in the rupee facility agreement with the Consortium that our Company shall not make any
investments in excess of Rs. 500 lakhs in a Fiscal without the prior written approval of the Consortium.
It is provided in the sanction letter issued by BoI that the Sponsors shall hold, directly or indirectly, not
less than 35% shareholding in our Company and shall exercise management control over our Company
as long as any amounts are outstanding the facility. The Sponsors shall also provide a negative pledge
in respect Equity Shares held by the Sponsors in our Company, so as to ensure a loan to market value
of not less than 1:2 at all times.
It is provided in the sanction letter issued by BoI that our Company shall maintain a debt to equity ratio
of 0.82 on two successive ‘testing dates’ (testing shall be undertaken from Fiscal 2008 and thereafter
on semi-annual basis, each such date being a testing date) at semi-annual periods. Further, our
Company shall ensure that ‘senior debt’ EBITDA ratio shall be upto 3.0 and the debt service coverage
ratio shall be an average minimum of 1.40 on two successive ‘testing dates’ at semi-annual periods.
279
OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS
Except as described below, there are no outstanding litigation, suits or criminal or civil prosecutions,
proceedings or tax liabilities against our Company, our Directors, our Promoters or group companies and there
are no defaults, non payment of statutory dues, over dues to banks/ financial institutions, defaults against banks/
financial institutions/ small scale undertaking(s), defaults in dues payable to holders of any debentures, bonds
or fixed deposits, issued by our Company (including past cases where penalties may or may not have been
awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII of the
Companies Act, 1956). The following are the outstanding or pending litigations or suits or proceedings against
the Company and criminal complaints or cases, defaults, non-payment or overdues of statutory dues,
proceedings initiated for any economic or civil offences and disciplinary action taken by SEBI or stock
exchanges against the Company, its subsidiaries and other group companies and the outstanding or pending
litigations or suits or proceedings against the subsidiaries and other group companies.
Certain litigations pending against our Company have been initiated against/by Siti Cable or NEENL and these
litigations have been transferred to our Company further to the provisions of the Scheme of Arrangement.
Further, few litigations have been initiated against Essel Agro Private Limited. Pursuant to the provisions of
agreement dated December 31, 2006 between our Company and Essel Agro Private Limited, such litigations
against Essel Agro Private Limited have also been transferred to our Company.
1.
Litigation against our Company
Contingent Liabilities
Our contingent liabilities not provided for and outstanding guarantees (as disclosed in our consolidated financial
statements) as at June 30, 2008 amounts to Rs. 26,186.1 lakhs. For details see “Financial Statements” on page
104.
Pending litigations against our Company
Intellectual Property Cases
1.
Tata Sky Limited has filed a suit (suit no. 2732 of 2006) against Nandi Electronics and others including
our Company before the High Court of Judicature at Bombay on September 18, 2006. The plaintiff has
claimed that the our Company and other defendants have infringed its intellectual property rights by
using the mark “ACTIVE” for providing services under the DTH platform, as the said trademark is
almost identical and deceptively similar to the plaintiff’s trademark “ACTVE” which the plaintiff uses
in the same line of business. The plaintiff has claimed a permanent injunction against the use of the
said mark and Rs. 5,00,000 as damages for the act of passing off and to destroy all materials bearing
the said mark. The case is currently pending and the next date of hearing shall be intimated by the court
in due course.
Civil Suits
1.
Star India Private Limited has filed an appeal (civil appeal no. 3363 of 2006) before the Supreme Court
of India, New Delhi against our Company, formerly known as ASC Enterprises Limited. This appeal
has been preferred against the order dated July 14, 2006 wherein the TDSAT had directed the
appellants to provide their channels to our Company at half the rates at which these channels were
provided to the cable operators. Pursuant to the TDSAT order, our Company had also filed an appeal
(civil appeal no. 3904) alleging that these channels should be provided to them at 1/3rd of the rates at
which these channels were provided to the cable operators. The case is currently pending and the next
date of hearing shall be intimated by the court in due course.
2.
Sajag Upobhokta Shakti Sangathan Samiti has filed a complaint (complaint no. 44 of 2008) dated May
22, 2008 before the Monopolies and Restrictive Trade Practices Commission (“MRTP Commission”)
against our Company alleging that our Company is engaged in unfair trade practices as they are making
false and misleading representations to induce customers stating that STBs are being given free to
customers on purchase of a Dish TV connection. It is alleged that the customer pays for the STB as part
of a rental scheme. The MRTP Commission by its order dated August 7, 2008, has issued a temporary
injunction restraining our Company from representing in any media that the STB comes free of cost/
280
rental without indicating the scheme in which the STB is being given free. The case is currently
pending and the next date of hearing is scheduled on January 22, 2009.
3.
Tata Sky Limited and Mr. Hari Shankar have filed a complaint (complaint no. 48 of 2008) dated May
29, 2008 before the Monopolies and Restrictive Trade Practices Commission (“MRTP Commission”)
against our Company alleging that our Company is engaged in unfair trade practices as they are making
false and misleading representations to induce customers stating that STBs are being given free to
customers on purchase of a Dish TV connection. It is alleged that the customer pays for the STB as part
of a rental scheme. The MRTP Commission by its order dated August 7, 2008, has issued a temporary
injunction restraining our Company from representing in any media that the STB comes free of cost/
rental without indicating the scheme in which the STB is being given free. The case is currently
4.
Star Den Media Services Private Limited has filed a petition (petition no. 176 of 2008) before the
Telecom Disputes Settlement and Appellate Tribunal against our Company alleging that our Company
has not signed the agreement for distribution of their channels as per their Reference Interconnect
Offer. The petitioner has prayed for a direction to be issued to our Company for execution of the said
agreement. The matter is currently pending and the next date of hearing is scheduled on December 15,
2008.
Criminal Proceedings
1.
Mableshwar Bhatt has filed a criminal complaint (criminal complaint no. 2994 of 2008) dated August
23, 2008 before the Judicial Magistrate First Class, Sirsi, Karnataka against our Company for
infringement of copyright alleging that our Company has used his photograph performing a folk dance
‘Yakshagana’ in brochures and publicity material without his knowledge or consent. The complainant
has claimed further that the act of our Company is punishable under Section 63 of the Copyrights Act,
1957 and has prayed for appropriate relief from the court. The matter is currently pending and the next
date of hearing is scheduled on December 27, 2008.
Consumer Cases
1.
Mr. Vinay Sethi has filed a complaint petition (consumer dispute case no. 1032 of 2005) dated October
13, 2005 against our Company and others before the District Consumer Disputes Redressal Forum,
Yamunanagar (“District Forum”). The complainant was one of the subscribers of our Company and
has claimed that the STB was defective and did not function properly. The complainant has claimed Rs.
10,000 or in the alternative, the replacement of the defective STB, and Rs. 85,500 as compensation.
The District Forum passed an order dated July 14, 2006 wherein our Company was asked to pay the
complainant a sum of Rs. 4,990, the cost of the defective STB, alongwith an interest of 12% per annum
from the date of purchase of the STB and also a compensation of a sum of Rs. 20,000. Our Company
has filed an appeal against the said order before the State Consumer Redressal Commission,
Chandigarh. The case is currently pending and the next date of hearing is scheduled on May 12, 2010.
2.
Mr. Amjad Khan has filed a complaint petition (consumer dispute case no. 115 of 2006) dated April 3,
2006 against our Company and others before the District Consumer Disputes Redressal Forum, Guna
(“District Forum”). The complainant was one of the subscribers of our Company and had claimed that
the STB was defective and not functioning properly. The complainant had claimed a compensation of
Rs. 52,380. The District Forum by its order dated December 26, 2006 had held us deficient and
directed us to pay Rs. 5,500. Our Company has filed an appeal against the said order before the State
Consumer Redressal Commission, Bhopal. The case is currently pending and the next date of hearing is
scheduled on January 5, 2009.
3.
Mr. Satyabir has filed a complaint petition (consumer dispute case no. 258 of 2006) dated September 5,
2006 against our Company and others before the District Consumer Disputes Redressal Forum,
Narnaul. The complainant was one of the subscribers of our Company and has claimed that our
Company has not renewed the package despite the requisite payment being made for the same. The
complainant has claimed a compensation of Rs. 20,722 along with an interest of 10% per annum
thereon. The case is currently pending and the next date of hearing is scheduled on November 29, 2008.
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4.
Mr. Tarun Kumar Sinha has filed a complaint petition (consumer dispute case no. 495 of 2006) dated
September 29, 2006 against our Company and others before the District Consumer Disputes Redressal
Forum, Thane (“Forum”). The complainant was one of the subscribers of our Company and has
claimed that the STB was defective and that certain channels were not activated as assured by our
Company in the package availed by him. The complainant has claimed a compensation of Rs. 50,000
alongwith an interest of 18% per annum thereon. The case is currently pending and the next date of
hearing shall be intimated by the Forum in due course.
5.
Mr. Devsharan Sharma has filed a complaint petition (consumer dispute case no. 901 of 2006) dated
November 20, 2006 against our Company and others before the District Consumer Disputes Redressal
Forum, Bhopal (“Forum”). The complainant was one of the subscribers of our Company and has
claimed that the STB was defective and that the subscription was not activated despite availing our
‘one year free subscription scheme’. The complainant has claimed a compensation of Rs. 1,00,000 and
the activation of his subscription. The case is currently pending and the next date of hearing shall be
intimated by the Forum in due course.
6.
Mr. Prafulla Patnaik has filed a complaint petition (consumer dispute case no. 85 of 2006) dated
December 22, 2006 against our Company, formerly known as ASC Enterprises Limited before the
District Consumer Redressal Forum, Nabarangpur (“Forum’). The complainant was one of the
subscribers of our Company and has claimed that only few channels were activated even though he had
subscribed for more channels. The complainant has claimed a compensation of Rs. 93,300. The case is
currently pending and the next date of hearing shall be intimated by the Forum in due course.
7.
Mr. Vijay Pal has filed a complaint petition dated January 26, 2007 against our Company and others
before the District Consumer Disputes Redressal Forum, Kaithal (“Forum”). The complainant was one
of the subscribers of our Company and has claimed that the STB was defective and all the channels had
been abruptly deactivated without any reason. The complainant has claimed a compensation of Rs.
55,500 and a replacement or repair of the defective STB. The case is currently pending and the next
date of hearing shall be intimated by the Forum in due course.
8.
Mr. A.M. Gangoo has filed a complaint petition dated December 27, 2006 against our Company,
formerly known as ASC Enterprises Limited before the Divisional Consumers Protection Forum,
Kashmir Division, Srinagar (“Forum”). The complainant was one of the subscribers of our Company
and has claimed that certain channels were deactivated even though he was entitled to view those
channels under the package availed by him. The complainant has claimed a compensation of Rs.
55,000 and the activation of the said channels. The case is currently pending and the next date of
hearing shall be intimated by the Forum due course.
9.
Mohd. Eqbal Aktar Kaderi has filed a complaint petition (consumer dispute case no. 38 of 2007) dated
January 22, 2007 against our Company, formerly known as ASC Enterprises Limited before the
District Consumer Disputes Redressal Forum, Khudra, Orissa (“Forum”). The complainant was one of
the subscribers of our Company and has claimed that the subscription had been abruptly disconnected
without any reason. The complainant has sought restoration of his subscription, and has claimed a
compensation of Rs. 1,70,000 alongwith interest at the rate of 18% per annum thereon. The case is
currently pending and the next date of hearing is scheduled on December 5, 2008.
10.
Mr. Ajit Kumar Sao has filed a complaint petition (consumer dispute case no. 71 of 2006) against our
Company and others before the District Consumer Disputes Redressal Forum, Munger, Bihar
(“Forum”). The complainant was one of the subscribers of our Company and has claimed that the
connection was deactivated for want of renewal fee despite an assurance by our Company that it would
remain active. The complainant has claimed a compensation of Rs. 25,000. The case is currently
pending and the next date of hearing shall be intimated by the Forum in due course.
11.
Mr. Deep Kumar Gupta has filed a complaint petition (consumer dispute case no. 47 of 2007) dated
April 2, 2007 against our Company and others before the District Consumer Disputes Redressal Forum,
Mathura. The complainant had availed two separate connections since he could not view the channels
on more than one television with one connection. He has claimed that despite paying the requisite
charges for the two connections, both the connections were wrongfully deactivate without any reason
or notice. The complainant has claimed a compensation of Rs. 35,000 and has sought restoration of the
282
connections. The case is currently pending and the next date of hearing is scheduled on December 5,
2008.
12.
Mr. Ashok Kumar has filed a complaint petition (consumer dispute case no. 56 of 2007) dated January
16, 2007 against our Company, formerly known as ASC Enterprises Limited, before the District
Consumer Disputes Redressal Forum, Bhiwani. The complainant was one of the subscribers of our
Company and has claimed that our Company had abruptly disconnected all the channels without any
reason. The complainant has claimed a compensation of Rs. 90,000 and a restoration of the connection.
The case is currently pending and the next date of hearing is scheduled on December 15, 2008.
13.
Mr. Ravinder Kumar has filed a complaint petition (consumer dispute case no. 403 of 2006) dated
November 14, 2006 against NEENL before the District Consumer Disputes Redressal Forum, Kaithal.
The complainant was one of the subscribers of our Company and has claimed that the STB given to
him by our Company was defective and that it was not a new set. The complainant has claimed a
compensation of Rs. 54,080. The case is currently pending and the next date of hearing shall be
intimated in due course.
14.
Mr. Prasanta Kumar Mahapatra has filed a complaint petition (consumer dispute case no. 42 of 2007)
dated March 28, 2007 against our Company and others before the District Consumer Disputes
Redressal Forum, Ganjam, Berhampur. The complainant was one of the subscribers of our Company
and has claimed the service provided to him did not meet good standards and the channels often had
poor visibility. On making complaint of the same to our Company, all the channels were abruptly
disconnected without any reason. The complainant has claimed refund of the cost of the DTH
equipment and compensation of Rs. 80,000 towards damages. The case is currently pending and the
next date of hearing is scheduled on December 16, 2008.
15.
Mr. Dinesh Ramchandra Sabnis has filed a complaint petition (consumer dispute case no. 438 of 2006)
dated December 27, 2006 against NEENL before the District Consumer Disputes Redressal Forum,
Mumbai (“Forum”). The complainant was one of the subscribers of our Company and has claimed that
the STB was faulty as after encountering reception problems initially, it completely stopped
functioning eventually. He has claimed replacement of the STB and suitable compensation. The case is
16.
Mr. Moinuddin Khan has filed a complaint petition (consumer dispute case no. 141 of 2007) dated
April 4, 2007 against our Company and others before the District Consumer Disputes Redressal Forum,
Meerut. The complainant was one of the subscribers of our Company and has claimed that our
Company has abruptly disconnected all the channels without any reason despite repeated complaints.
The complainant has claimed that the connection should be restored, Rs. 6,490 alongwith an interest of
9% per annum thereon and Rs. 22,500 as compensation for deficiency in service. The case is currently
17.
Mr. Ajay Kumar has filed a complaint petition (consumer dispute case no. 40 of 2007) dated February
Kangra. The complainant was one of the subscribers of our Company and has claimed that after
installation of the STB, he could view only 15 channels and not the others as assured by our Company.
The complainant has claimed Rs. 8,400 alongwith an interest at the rate of 18% per annum as refund
against payment made for the products and installation charges, Rs. 2,500 as refund against payment of
activation charges and Rs. 18,000 as compensation. The case is currently pending and the next date of
hearing is scheduled on December 4, 2008.
18.
Ms. Kumari Pallavi has filed a complaint petition (consumer dispute case no. 6 of 2007) dated January
Navada (“Forum”). The complainant was one of the subscribers of our Company and has claimed that
the STB had inherent manufacturing defects which were not repaired despite repeated complaints. The
complainant has claimed Rs. 14,900 as compensation for deficiency in service. The case is currently
19.
Mr. L. R. Ranga has filed a complaint petition (consumer dispute case no. 159 of 2007) dated April 11,
Gurgaon. The complainant was one of the subscribers of our Company and has claimed that the free to
283
air channels which were meant to be beamed for a lifetime period had been deactivated. The
complainant has sought the restoration of the channels or in the alternative refund the sum of Rs. 3,190
with interest at the rate of 9% per annum thereon, and has claimed Rs. 20,000 as compensation for
deficiency in service. The case is currently pending and the next date of hearing is scheduled on
December 20, 2008.
20.
Mr. Lal Singh Arya has filed a complaint petition (consumer dispute case no. 587 of 2007) dated
March 19, 2007 against our Company and others before the District Consumer Disputes Redressal
Forum, Kurukshetra. The complainant was one of the subscribers of our Company and has claimed that
as per the subscription scheme, he was meant to receive 35 channels for life free of cost but 16 of these
channels were withdrawn without any cause. The complainant has claimed restoration of the channels
and Rs. 55,000 with interest at the rate of 12% per annum as compensation for deficiency in service.
The case is currently pending and the next date of hearing is scheduled on January 9, 2009.
21.
Mr. Yash Pal Anand has filed a complaint petition (consumer dispute case no. 89 of 2007) against our
Company and others before the District Consumer Disputes Redressal Forum, Ghaziabad. The
complainant was one of the subscribers of our Company and has claimed that he purchased a STB but
from the very first day, the reception of the channels was not clear. The complainant has sought
rectification of the defect or in the alternative a replacement of the STB for a new one and has claimed
a sum of Rs. 35,000 as compensation. The case is currently pending and the next date of hearing is
22.
Ms. P. Patnaik has filed a complaint petition (consumer dispute case no. 68 of 2007) dated June 6, 2007
against our Company, previously known as ASC Enterprises Limited, and others before the District
Consumer Disputes Redressal Forum, Ganjam, Berhampur (“Forum”). The complainant was one of
the subscribers of our Company and has claimed that as per the subscription scheme she was meant to
receive a package of pay channels as well as certain free to air channels, but after few days of availing
the package, the said pay channels were deactivated. The complainant has claimed Rs. 35,000 as
compensation. The case is currently pending and the next date of hearing shall be intimated by the
Forum in due course.
23.
Mr. Shyam Sunder Jhanwar has filed a complaint petition (consumer dispute case no. 222 of 2004)
dated August 26, 2004 against our Company and others before the District Consumer Disputes
Redressal Forum, Cuttack (“District Forum”). The complainant was one of the subscribers of our
Company and has claimed that our Company had abruptly disconnected all the channels without any
reason. The District Forum by its order dated March 10, 2006 had dismissed the complaint but had
ordered our Company to return the amount collected till date from the subscriber. Our Company has
filed an appeal against the said order before the State Consumer Disputes Redressal Commission,
Orissa (“State Commission”). The case is currently pending and the next date of hearing shall be
intimated by the State Commission in due course.
24.
Mr. Rajesh Kumar has filed a complaint petition (consumer dispute case no. 706 of 2004) dated March
1, 2005 against NEENL before the District Consumer Disputes Redressal Forum, Karnal (“District
Forum”). The complainant was one of the subscribers of our Company and has alleged that his DTH
connection was wrongfully deactivated. The complainant had claimed restoration of connection and a
compensation of Rs. 20,000. The District Forum by its order dated December 12, 2005 accepted the
contention of the complainant with respect to restoration of the connection. Our Company has filed an
appeal against the said order before the State Consumer Disputes Redressal Commission, Haryana
(“State Commission”). The case is currently pending and the next date of hearing shall be intimated by
the State Commission in due course.
25.
Ms. Tara Chandra has filed a complaint petition (consumer dispute case no. 128 of 2005) against our
Company before the District Consumer Disputes Redressal Forum, Sitapur (“Forum”). The
complainant was one of the subscribers of our Company and has contended that there was loss of signal
and his connection was not repaired by our Company. The complainant has sought restoration of the
connection, compensation at the rate of Rs. 200 per day during the period of loss of signal and costs
and compensation of Rs. 12,000. The case is currently pending and the next date of hearing shall be
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26.
Mr. Girija Prasad Agarwal has filed a complaint (consumer dispute case no. 96 of 2006) dated August
14, 2006 against our Company, formerly known as ASC Enterprises Limited, before the District
Consumer Disputes Redressal Forum, Jaipur (“Forum”). The complainant was one of the subscribers
of our Company and has contended that he had obtained a DTH connection which had remained faulty
and was not rectified. The complainant sought restoration of a working connection along with
compensation of Rs. 29,000 for mental agony along with other costs. The case is currently pending and
the next date of hearing shall be intimated by the Forum in due course.
27.
Mr. Mohan Krishan has filed a complaint against our Company before the District Consumer Disputes
Redressal Forum, Bhiwani. The complainant was one of the subscribers of our Company and has
contended that he was not provided the DTH connection on the promised terms, that is, a free
connection for a period of three months from activation. The complainant alleged that he was asked to
pay before the three-month period fully expired. The complainant has sought reactivation of the facility
without charging of any rent along with compensation of Rs. 53,300. The case is currently pending and
the next date of hearing is scheduled on December 15, 2008.
28.
Mr. Arijit Das has filed a complaint (consumer dispute case no. 447 of 2006) dated March 13, 2007
against our Company, formerly known as ASC Enterprises Limited, before the District Consumer
Disputes Redressal Forum, Kolkata. The complainant was one of the subscribers of our Company and
has contended that he received no signal on his DTH connection which was not rectified free of cost
during the warranty period. The complainant has sought service for the first three months with free
viewing, refund of Rs. 610 taken from him, along with compensation of Rs. 50,000. The case is
currently pending and the next date of hearing is scheduled on January 7, 2009.
29.
Mr. Amit Saini has filed a complaint (consumer dispute case no. 19 of 2007) dated January 24, 2007
against NEENL before the District Consumer Disputes Redressal Forum, Saharanpur (“Forum”). The
complainant was one of the subscribers of our Company and has contended that upon the purchase of
the DTH connection he was promised a holiday package of Rs. 4,000 on payment of Rs. 599. The
complainant contended that despite payment of this money he was not provided with the promised
holiday package. The complainant has sought compensation of Rs. 10,000 with interest for breach of
contract, Rs. 5,000 as compensation and Rs. 5,000 as costs. The case is currently pending and the next
30.
Mr. Azizur Rahman Mazumdar has filed a complaint petition (consumer dispute case no. 11 of 2007)
dated September 9, 2007 against our Company before the District Consumer Disputes Redressal
Forum, Hailakandi, Assam (“Forum”). The complainant was one of the subscribers of our Company
and has claimed that despite making payments of the subscription charges for six months, the services
were deactivated. The complainant has claimed Rs. 52,000 as compensation towards mental
harassment. The case is currently pending and the next date of hearing shall be intimated by the Forum
in due course.
31.
Mr. Surender Kumar has filed a complaint petition (consumer dispute case no. 638 of 2007) dated July
1, 2007 against Essel Agro Private Limited, whose DTH equipment business has been acquired by our
Company, before the District Consumer Disputes Redressal Forum, Jaipur. The complainant was one
of the subscribers of our Company and has claimed that despite making payments of the subscription
charges, the services were deactivated for the next 14 days since he made the payment. The
complainant has alleged mental harassment and has claimed Rs. 31,750 as compensation along with
interest at the rate of 18% per annum. The case is currently pending and the next date of hearing is
32.
Ms. Sushmita Parida has filed a complaint petition (consumer dispute case no. 110 of 2007) dated June
28, 2007 against our Company before the District Consumer Disputes Redressal Forum, Dhenkanal,
Orrisa (“Forum”). The complainant was one of the subscribers of our Company and has claimed that
she had paid subscription money and was promised services of free to air channels for life-time without
any further payment. She has alleged that the broadcast of free to air channels have been deactivated.
The complainant has alleged mental harassment and has claimed Rs. 70,000 as compensation and
reconnection of free to air channels at the earliest. The case is currently pending and the next date of
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33.
Ms. Gajender Singh has filed a complaint petition (consumer dispute case no. 422 of 2007) dated
September 12, 2007 against our Company before the District Consumer Disputes Redressal Forum,
Gurgaon. The complainant was one of the subscribers of our Company and has claimed that he had
subscribed for a scheme in which he was promised free subscription for a period of four months but his
connection was deactivated after 25 days. The complainant has alleged mental harassment and has
claimed Rs. 50,000 towards compensation and an additional compensation of Rs. 1,87,000 towards
financial losses. The case is currently pending and the next date of hearing is scheduled on December
22, 2008.
34.
Mr. Rajesh Kumar Bhargava has filed a complaint petition (consumer dispute case no. 813 of 2007)
dated May 24, 2007 against our Company before the District Consumer Disputes Redressal Forum,
Jaipur. The complainant was one of the subscribers of our Company and has claimed that despite
making payments of the subscription charges, the services were deactivated for a period of 72 hours.
The complainant has alleged mental harassment and has claimed Rs. 35,000 as compensation. The case
is currently pending and the next date of hearing is scheduled on January 5, 2009.
35.
Mr. Sukh Pal Singh has filed a complaint petition (consumer dispute case no. 95 of 2007) dated June
Shahajahanpur (“Forum”). The complainant was one of the subscribers of our Company and has
claimed that he had paid subscription money and was promised services of free to air channels for lifetime without any further payment. He has alleged that the broadcast of free to air channels has been
deactivated. The complainant has alleged mental harassment and has claimed Rs. 2,490 as refund of
connection charges along with Rs. 27,000 as compensation. The case is currently pending and the next
36.
Mr. Barkelo Shankar Gaonkar has filed a complaint petition (consumer dispute case no. 49 of 2007)
dated June 14, 2007 against our Company and others before the District Consumer Disputes Redressal
Forum, Goa (“Forum”). The complainant was one of the subscribers of our Company and has claimed
that he had paid subscription money for a period of one year but the connection was deactivated
arbitrarily. He has claimed that he should be provided broadcast of free to air channels without any
further payment. The complainant has alleged mental harassment and has claimed Rs. 30,000 as
compensation along with interest at the rate of 18% per annum. The case is currently pending and the
next date of hearing shall be intimated by the Forum in due course.
37.
Mr. P.V. Martin Verghese has filed a complaint petition (consumer dispute case no. 32 of 2007) against
our Company and others before the District Consumer Disputes Redressal Forum, Yavanad, Kerala
(“Forum”). The complainant was one of the subscribers of our Company and has claimed that he had
paid the subscription money and was promised services of free to air channels for life-time without any
further payment. He has alleged that the broadcast of free to air channels has been deactivated. The
complainant has alleged mental harassment and has claimed Rs. 12,000 as cost and compensation. The
case is currently pending and the next date of hearing shall be intimated by the Forum in due course.
38.
Master J. Srivastava through Ms. Manjula Srivastava has filed a complaint petition (consumer dispute
case no. 543 of 2007) dated December 5, 2007 against our Company and others before the District
Consumer Disputes Redressal Forum, Lucknow (“Forum”). The complainant was one of the
subscribers of our Company and has claimed that despite making payments for subscription charges the
paid channels had not been broadcast. The complainant has alleged mental harassment and has claimed
Rs. 61,710 as cost and compensation. The case is currently pending and the next date of hearing shall
be intimated by the Forum in due course.
39.
Mr. Jogender Singh has filed a complaint petition dated June 6, 2007 against NEENL before the
District Consumer Disputes Redressal Forum, Bhiwani, Haryana. The complainant was one of the
subscribers of our Company and has claimed that the STB provided to the complainant was faulty and
he had provided the same for repair but was never returned to the complainant. The complainant has
claimed replacement of the STB and an amount of Rs. 50,000 as cost and compensation. The case is
40.
Dr. Mohinder Kumar Bali has filed a complaint (consumer case no. 622 of 2007) against our Company
before the District Consumer Disputes Redressal Forum, Jaipur. The complainant is one of the
subscribers of our Company and has alleged that he had made payments towards subscription charges
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but did not receive the corresponding services from our Company. The complainant had demanded
payment of Rs. 94,190 towards cost and compensation. The case is currently pending and the next date
of hearing is scheduled on January 9, 2009.
41.
Mr. Tara Singh Negi has filed a complaint petition (consumer dispute case no. 835 of 2007) dated
August 27, 2007 against our Company and others before the District Consumer Disputes Redressal
Forum, Shimla (“Forum”). The complainant was one of the subscribers of our Company and has
claimed that he had paid subscription money and was promised services of free to air channels for lifetime without any further payment. He has claimed that the broadcast of free to air channels had been
deactivated. The complainant has alleged mental harassment and has claimed Rs. 10,000 as cost and
compensation and has prayed for restoration of broadcast of free to air channels. The case is currently
42.
Mr. Ajay Kumar has filed a complaint (consumer dispute case no. 84 of 2007) against our Company
dated October 11, 2007 before the District Consumer Disputes Redressal Forum, Sheopur, Madhya
Pradesh. The complainant is one of our authorized dealers and has alleged that the he had made a
payment of Rs. 1,100 towards security deposit but his services were de-activated without providing any
reason. The complainant has demanded payment of Rs. 13,000 towards cost and compensation and
restoration of the connection. The case is currently pending and the next date of hearing is scheduled on
December 1, 2008.
43.
Mr. B.D. Lal has filed a complaint petition (consumer dispute case no. 112 of 2007) dated May 16,
2007 against one of our authorized dealer before the District Consumer Disputes Redressal Forum,
Ranchi. Our Company was later impleaded as one of the parties to the complaint. The complainant was
one of the subscribers of our Company and has claimed that he had paid subscription money and was
promised services of free to air channels for life-time without any further payment. He has alleged that
the broadcast of all channels including free to air channels has been deactivated. The complainant has
alleged mental harassment and has claimed Rs. 16,490 as cost and compensation. The case is currently
pending and the next date of hearing is scheduled on December 3, 2008.
44.
Mr. Surender Singh Kapoor has filed a complaint petition (consumer dispute case no. 575 of 2007)
dated December 3, 2007 against our Company and others before the District Consumer Redressal
Forum, Gurgaon. The complainant was one of the subscribers of our Company and has claimed that
even after making payments of the subscription fees the services were not provided to the complainant.
The complainant has alleged deficiency of services and mental harassment and has claimed Rs. 65,000
as cost and compensation. The case is currently pending and the next date of hearing is scheduled on
December 5, 2008.
45.
Mr. G.S. Somal has filed a complaint petition (consumer dispute case no. 83 of 2007) dated July 8,
Ganjampur (Beharampur), Orissa. The complainant was one of the subscribers of our Company and has
alleged that the quality of picture was poor. He has claimed rectification of the DTH equipment or in
the alternative, refund of the cost of the STB and Rs. 55,000 towards cost and compensation. The case
is currently pending and the next date of hearing is scheduled on December 1, 2008.
46.
Mr. R.K. Bansal has filed a complaint petition (consumer dispute case no. 451 of 2007) dated June 7,
2007 against Essel Agro Private Limited, whose DTH equipment business has been acquired by our
Company, before the District Consumer Redressal Forum, Jankpuri, Delhi (“Forum”). The
complainant was one of the subscribers of our Company and has claimed that despite having paid and
subscribed to our DTH services for one year, the free to air channels were deactivated before the
completion of the stipulated period. The complainant has alleged mental harassment and has claimed
Rs. 3,990 as cost and compensation. He has also claimed reactivation of the said channels. The case is
47.
Mr. Chandrayan Sagar Gupta has filed a complaint petition (complaint petition no. 97 of 2007) dated
July 16, 2007 against NEENL, Essel Agro Private Limited, whose DTH equipment business has been
acquired by our Company, and others, before the District Consumer Disputes Redressal Forum,
Farukhabad. The complainant was one of the subscribers of our Company and has claimed that the free
to air channels which were meant to be beamed for a lifetime period had been deactivated. He has
claimed that the free to air channels be restored, and has also claimed Rs. 5,000 as compensation and
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Rs. 2,000 towards the cost of the litigation. Further, in the alternative, if the channels cannot be restored
to him, he has claimed a sum of Rs. 3,990 alongwith an interest of 24% per annum as costs incurred
towards availing of such services. The case is currently pending and the next date of hearing is
scheduled on December 3, 2008.
48.
Mr. G. Murlidharan Nayar has filed a complaint petition (complaint petition no. 40 of 2007), 2007
against our Company, formerly known as ASC Enterprises Limited and another before the District
Consumer Disputes Redressal Forum, Sirohi (“Forum”). The complainant was one of the subscribers
of our Company and has alleged that despite paying the requisite charges for renewal of our services,
our Company did not renew his subscription. He has claimed a sum of Rs. 96,880 including the cost for
availing our services, refund of the renewal charges paid by him and the cost incurred by him for
availing the services of other service providers. The case is currently pending and the next date of
49.
Mr. Kamansu Kumar Sahoo has filed an petition (appeal no. 567 of 2007) dated July 25, 2007 against
our Company, formerly known as ASC Enterprises Limited and others before the State Consumer
Disputes Redressal Forum, Cuttack against the order passed by the District Consumer Disputes
Redressal Forum (“District Forum”) in consumer complaint no. 205 of 2006 filed by him. He was one
of the subscribers of our Company and has alleged that we had deactivated the services without any
notice or reason. The District Forum had dismissed his petition wherein we had also alleged that the
complainant was distributing and transmitting our signals even though he was unauthorized to do so.
The complainant has filed this appeal seeking to set aside the order of the District Forum and has
claimed such compensation as may be deemed fit by the appellate forum. The case is currently pending
and the next date of hearing shall be intimated by the Forum in due course.
50.
Mr. Krushna Chandra Samantray has filed a complaint petition (complaint petition no. 439 of 2007)
dated November 13, 2007 against our Company and another before the District Consumer Disputes
Redressal Forum, Bhubaneswar (“Forum”). The complainant is a subscriber to one of our DTH
schemes called ‘Freedom’ and has alleged that the same was deactivated within two months of his
availing the services. He has claimed free subscription for a period of one year and compensation of
Rs. 15,000 towards mental harassment and other costs. The case is currently pending and the next date
of hearing shall be intimated by the Forum in due course.
51.
Mr. Shray Sindhu has filed a complaint petition (complaint petition no. 635 of 2007) dated December
12, 2007 against our Company and another before the District Consumer Disputes Redressal Forum,
Rohtak. The complainant is a subscriber of one of our DTH schemes called ‘Freedom’ and has alleged
that the same was deactivated by us within two months after his availing of its services. He has prayed
that our Company be directed to reactivate the signal of the paid channels and has claimed
compensation of Rs. 50,000 towards mental harassment and other costs. The case is currently pending
and the next date of hearing is scheduled on December 22, 2008.
52.
Mr. Sube Ram has filed a complaint petition (complaint petition no. 445 of 2007) dated August 31,
2007 against our Company and another before the District Consumer Disputes Redressal Forum,
Rohtak. The complainant has alleged that despite paying the renewal charges, our Company did not
renew the DTH services availed by him. He has claimed restoration of the connection, an amount of
Rs. 25,000 as compensation towards mental harassment and deficiency in services and a further amount
of Rs. 5,500 towards the cost of the litigation. The case is currently pending and the next date of
53.
Mr. Chandra Deep Jodha has filed a complaint petition (complaint petition no. 154 of 2008) against our
Company, formerly known as ASC Enterprises Limited, and others, before the District Consumer
Disputes Redressal Forum, Jaipur. The complainant was one of the subscribers of our Company and
has claimed that the STB was defective and did not function properly. The complainant has claimed the
replacement of the defective STB or refund the cost thereof and a sum of Rs. 55,000 including
compensation for mental harassment and the costs of the litigation. The case is currently pending and
the next date of hearing is scheduled on January 12, 2009.
54.
Mr. Ram Swaroop has filed a complaint petition (complaint petition no. 767 of 2008) dated January 18,
2008 against our Company and others before the District Consumer Disputes Redressal Forum II,
Delhi. The complainant is one of the subscribers of our Company and has alleged that the STB was
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defective and did not function properly. He has claimed a replacement of the STB, or in the alternative
a refund of the expenses incurred by him for availing the services. He has also claimed a compensation
of Rs. 10,000 towards mental and physical harassment and Rs. 5,000 for the cost of the litigation
alongwith an interest of 18% per annum from the date of filing of the complaint. The case is currently
pending and the next date of hearing is scheduled on December 22, 2008 for filing of the rejoinder with
the complaint.
55.
Ms. Veena Prafulla Khambete has filed a complaint petition (complaint petition no. 505 of 2006) dated
September 28, 2006 against Essel Agro Private Limited, whose DTH equipment business has been
acquired by our Company, and another, before the District Consumer Disputes Redressal Forum,
Thane (“Forum”). The complainant is a subscriber to one of our DTH service schemes called ‘Utsav
Scheme’. She has alleged that despite paying the requisite fees, our Company did not provide her with
a free picnic tour as promised by our Company under the said scheme. She has claimed an amount of
Rs. 33,420 towards compensation for mental harassment and cost of the package for the said picnic
tour. The case is currently pending and the next date of hearing shall be intimated by the Forum in due
course.
56.
Mr. Bhanwar Singh Chaudhary has filed a complaint petition (complaint petition no. 84 of 2008) dated
February 2, 2008 against our Company and another before the District Consumer Disputes Redressal
Forum, Ajmer. The complainant was one of the subscribers to the DTH services and has alleged that
the free to air channels were arbitrarily deactivated by our Company. He has claimed reactivation of the
said channels, or in the alternative a refund of a sum of Rs. 2,499 paid by him as security deposit. He
has also claimed a sum of Rs. 50,000 as compensation for mental harassment and a sum of Rs. 5,500 as
costs incurred for the litigation. Our Company has filed a written statement disputing the claims of the
complainant on March 14, 2008. The case is currently pending and the next date of hearing is
scheduled on December 17, 2008.
57.
Mr. Ashok Sachdev has filed a complaint petition (complaint petition no. 767 of 2007) dated June 19,
2007 against our Company and another before the District Consumer Disputes Redressal Forum, South
Delhi. The complainant was one of the subscribers of our Company and has alleged that the STB was
defective and did not function properly. He has claimed a refund of Rs. 5,700 and Rs. 1,465 as costs
incurred for availing our services and a compensation of Rs. 25,000 towards mental harassment caused
to him. The case is currently pending and the next date of hearing is scheduled on December 18, 2008.
58.
Mr. Ashok Dhawan has filed a complaint petition (complaint petition no. 238 of 2006) dated October
16, 2006 against NEENL and another before the District Consumer Disputes Redressal Forum,
Saharanpur (“Forum”). The complainant was one of the subscribers to our DTH services and has
alleged that we wrongfully deactivated the services. He has claimed reactivation of the services, or in
the alternative, a refund of a sum of Rs. 6,500 as cost incurred by him for availing our services, and a
compensation of Rs. 40,000 for the mental harassment caused to him. The case is currently pending
59.
Mr. Rahmat Khan Pathan and Mr. Himmat Khan Pathan have jointly filed a complaint petition
(complaint petition no. 113 of 2007) against our Company and another before the District Consumer
Disputes Redressal Forum, Himmatnagar (“Forum”). The complainants were the subscribers to our
DTH services and have alleged that the services were wrongfully deactivated. They have claimed
restoration of the services and a compensation of Rs. 21,00,000 for the mental harassment caused to
them. The case is currently pending and the next date of hearing shall be intimated by the Forum in due
course.
60.
Mr. Nirmal Kumar Pandey had filed a complaint petition (complaint petition no. 732 of 2007) against
our Company and another before the District Consumer Disputes Redressal Forum, Hyderabad
(“District Forum”). The complainant was one of the subscribers to our DTH services and had alleged
that our Company wrongfully deactivated the services. He had claimed a refund of a sum of Rs. 4,000
as cost incurred by him for availing our services and a compensation of Rs. 1,00,000 for the mental
harassment caused to him. An order was passed by the District Forum on January 25, 2008 directing
our Company to pay compensation of Rs. 10,000 and a sum of Rs. 2,000 towards costs. Our Company
has preferred an appeal against the said order before the Andhra Pradesh State Consumer Disputes
Redressal Forum (appeal no. 696 of 2008) and it has passed an interim order dated March 29, 2008
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staying the operation of the order passed by the District Forum till the final disposal of the appeal. The
case is currently pending and the next date of hearing is scheduled on April 8, 2009.
61.
Mr. Pabitra Kumar Somal has filed a complaint petition (complaint petition no. 39 of 2008) dated April
2 , 2008 against our Company and others before the District Consumer Disputes Redressal Forum,
Jajpur, Orissa (“Forum”). The complainant was one of the customers of our Company and has alleged
that our Company had wrongfully deactivated the services on the ground that he had indulged in piracy
of our services. He has claimed a compensation of Rs. 50,000 for mental harassment and Rs. 10,000
towards the cost incurred towards the litigation. The case is currently pending and the next date of
62.
Mr. Tulsi Das Thamke has filed a complaint petition (consumer dispute case no. 639 of 2007) dated
August 21, 2007 against our Company before the District Consumer Disputes Redressal Forum,
Bhopal. The complainant was one of the subscribers of our Company and has claimed that he had
subscribed to the one-year-free subscription scheme and was promised by the dealer that he would be
provided services of free to air channels for life-time even if he did not pay any more subscription fee.
The complainant has alleged mental harassment due to non performance of the promise and has
claimed Rs. 7,591 as compensation along with interest. The case is currently pending and the next date
of hearing is scheduled to be on January 8, 2009.
63.
Dr. Dinesh has filed a complaint petition (consumer dispute case no. 179 of 2008) dated April 15,
2008, against our Company before the District Consumer Disputes Redressal Forum, Gurgaon,
Haryana. The complainant has alleged that the free to air channels were deactivated despite the
requisite fee having been paid by him. He has claimed restoration of a total amount of Rs. 30,000 as
compensation the facility with immediate effect. The case is currently pending and the next date of
hearing is scheduled on February 2, 2009 for filing of affidavit by our Company.
64.
Mr. Mohanlal Dhaka has filed a complaint petition (consumer dispute case no. 318 of 2008) dated
April 11, 2008 against NEENL before the District Consumer Disputes Redressal Forum,
Sriganganagar, Rajasthan (“Forum”). The complainant has alleged that the free to air channels were
deactivated despite the requisite fee having been paid by him. He has claimed a sum of Rs. 3,990 as
refund of the cost incurred by him towards the connection along with the compensation of total amount
of Rs. 12,100. The case is currently pending and the next date of hearing shall be intimated by the
65.
Mr. Prakashchandra Rao has filed a complaint petition (consumer dispute case no. 56 of 2007) dated
April 25, 2008 against our Company and others before the District Consumer Disputes Redressal
Forum, Mangalore (“Forum”) alleging that the services availed by him from our Company were
deficient and that the same caused mental harassment to him. Our Company received a summons from
the Forum and appeared before it on May 26, 2008. The case is currently pending and the next date of
66.
Mr. Madan Lal Dhaka has filed a complaint petition (consumer dispute case no. 319 of 2008) dated
March 31, 2008 against our Company and another before the District Consumer Disputes Redressal
Forum, Sriganganagar, Rajasthan (“Forum”). The complainant was one of the subscribers of our
Company and has claimed that the free to air channels which were meant to be beamed for a lifetime
period had been deactivated. The complainant has sought a refund the sum of Rs. 3,350, and has
claimed Rs. 10,000 as compensation for deficiency in service and Rs. 2,100 as the cost incurred by him
towards the litigation. The case is currently pending and the next date of hearing shall be intimated by
the Forum in due course.
67.
Mr. Manoj Prasad has filed a complaint petition (consumer dispute case no. 199 of 2008) dated April
25, 2008 against our Company and another before the District Consumer Redressal Forum, Gurgaon.
The complainant was one of the subscribers of our Company and has claimed that the STB provided by
us was defective and did not function properly. He has claimed a replacement of the STB or in the
alternative a refund of the cost incurred by him towards the same. The case is currently pending and the
next date of hearing is scheduled on December 5, 2008.
68.
Mr. Sanjay Kumar has filed a complaint petition dated April 24, 2008 against our Company and
another before the District Consumer Redressal Forum, Sonepat (“Forum”) alleging deficiency in the
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services provided by our Company to him. We have received a summons from the Forum and the next
69.
Mr. M.D. Balani has filed a complaint petition (consumer dispute case no. 421 of 2008) dated April 21,
2008 against our Company before the District Consumer Redressal Forum, Bhopal (“Forum”). The
complainant was one of the subscribers of our Company and has alleged that the connections availed
by him were deactivated wrongfully by us. He has sought free reactivation of the said connections for a
period of six months or in the alternative a refund of the cost incurred by him towards availing the said
connections, Rs. 80,000 as compensation for mental harassment and Rs. 5,000 as costs. The case is
70.
Ms. Madhu Sharma has filed a complaint petition (consumer dispute case no. 353 of 2007) dated
March 12, 2008 against our Company and another before the District Consumer Redressal Forum,
Ujjain (“District Forum”). The complainant is one of the subscribers of our Company and has alleged
that the connection availed by her was deactivated wrongfully. She has claimed a compensation of Rs.
5,000 and Rs. 1,000 as cost incurred for the litigation. The District Forum passed an order dated March
12, 2008 wherein our Company was asked to pay the complainant a sum of Rs. 6,000 as compensation
and free connection for a period of one month. The complainant had initiated execution proceedings
against our Company. Our Company has filed an appeal against the said order before the State
Consumer Redressal Commission, Bhopal (“State Commission”). The State Commission has stayed
the execution proceedings initiated by the complainant.The case is currently pending and the next date
of hearing is scheduled on March 18, 2009.
71.
Mr. Man Mohan Lal Mehra has filed a complaint petition (complaint petition no. 526 of 2008) dated
June 7, 2008 against our Company before the Consumer Dispute Redressal Forum, Jaipur. The
complainant is one of the subscribers of our Company who has alleged that the STB supplied to him is
faulty as the resolution was unclear and after a few days of installation, the channels stopped screening.
He has claimed refund of an amount of Rs. 6,800 towards purchase and installation of the STB, Rs.
50,000 as compensation for mental harassment and deficiency in service and Rs. 2,000 as costs. The
case is currently pending and the next date of hearing is scheduled on January 1, 2009.
72.
Mr. Kumar Kartikay has filed a consumer complaint (complaint petition no. 248 of 2008) dated May
15, 2008 against our Company before the Consumer Dispute Redressal Forum, Shalimar Bagh, New
Delhi (“Forum”). The complainant has alleged that our Company offered a list of 180 channels as part
of the package purchased by him but on installation only 90 channels were visible. The complainant
has claimed an amount of Rs. 4,60,000 as costs and compensation with interest at the rate of 24% per
annum for deficiency in service. The case is currently pending and the next date of hearing shall be
73.
Mr. Raez Ahmed has filed a consumer complaint (complaint petition no. 218 of 2008) dated May 9,
2008 against our Company before the Consumer Dispute Redressal Forum, Shalimar Bagh, New Delhi.
The complainant is a subscriber of our Company and has alleged that the STB provided to him was
faulty and was not rectified despite repeated requests. He claimed an amount of Rs. 7,539 as refund
towards cost of the DTH equipment, Rs. 1,00,000 as compensation for deficiency in service and Rs.
3,500 as costs. The case is currently pending and the next date of hearing is scheduled on February 18,
2009.
74.
Mr. Vijay Kumar has filed a consumer complaint (complaint petition no. 286 of 2008) dated May 23,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Shalimar Bagh,
New Delhi. The complainant has alleged that the installation of the connection was not made despite
the same being a free installation. The complainant has prayed that our Company be directed to install
the said connection and has claimed an amount of Rs. 1,00,000 towards costs and compensation for
deficiency in service. The case is currently pending and the next date is scheduled on January 6, 2009.
75.
Mr. Chetan Agarwal has filed a consumer complaint (complaint petition no.453 of 2008) dated June 9,
2008 against our Company before the Consumer Dispute Redressal Forum, Janakpuri, New Delhi. The
complainant is a subscriber of our Company and has alleged that the dish antennae was not aligned
despite several complaints and reminders made to our Company resulting in poor quality of picture and
non-receipt of signals. The complainant claimed, inter alia, refund of an amount of Rs. 4,999 and
291
compensation of Rs. 15,000 towards damages for mental agony and harassment. The case is currently
76.
Mr. Siddhartha Singh has filed a consumer complaint (complaint petition no. 327 of 2008) dated May
26, 2008 against our Company before the Consumer Dispute Redressal Forum, Qutub Institutional
Area, New Delhi. The complainant is a subscriber of our Company and has alleged that problems due
to inaccurate alignment of the dish antennae had lead to non-receipt of signals, which was not rectified
despite repeated requests to our Company. He has claimed refund of an amount of Rs. 4,900 and a
compensation of Rs. 30,000 towards damages for mental agony and harassment and Rs. 500 as costs.
The case is currently pending and the next date of hearing shall be intimated in due course.
77.
Mr. Ramayana Prasad Gautam has filed a consumer complaint (complaint petition no. 274 of 2008)
dated July 21, 2008 against our Company before the Consumer Dispute Redressal Forum, Satna,
Madhya Pradesh. The complainant is a subscriber of our Company and has alleged that our Company
has failed to provide certain free-to-air channels as assured by our Company. The complainant has
claimed an amount of Rs. 2,00,000 as costs and compensation for deficiency in service. The case is
78.
Mr. Ashish Mathur has filed a consumer complaint (complaint petition no.497 of 2008) dated June 3,
2008 against our Company and others before the Consumer Dispute Redressal Forum, Jodhpur,
Rajasthan. The complainant had subscribed to the ‘Maxi package’ of our Company and has alleged that
182 channels which were to be provided under the package were not provided to him. He claimed
refund of an amount of Rs. 3,990 as cost of the STB and Rs. 12,100 as compensation for deficiency in
service. The case is currently pending and the next date of hearing is scheduled on Januray 15, 2009.
79.
Mr. Sudeep Singh has filed a consumer complaint (complaint petition no. 437 of 2008) dated June 2,
2008 against our Company before the Consumer Dispute Redressal Forum, Janakpuri, New Delhi
(“Forum”). The complainant has alleged that since the re-installation of his connection after a
prolonged period of three months at his new residence, the channels were not activated since May,
2008 despite repeated requests and reminders. The complainant claimed refund of the subscription
amount of Rs. 5,640 and Rs. 55,000 as compensation for mental harassment and deficiency in service.
The case is currently pending and the next date of hearing shall be intimated by the Forum in due
course.
80.
Mr. Gaurav Gupta has filed a consumer complaint (complaint petition no. 988 of 2008) dated March
18, 2008 against our Company before the Consumer Dispute Redressal Forum, Saini Enclave, Delhi.
The complainant is one of the subscribers of our Company and has alleged that the connection provided
was not activated. He has claimed a refund of the cost of Rs. 7,600 incurred by him towards the
installation of the STB. Our Company has thus far received the notice for the same and the next date of
81.
Mr. Abdul Hamid Ahmed Patel has filed a consumer complaint (complaint petition no. 172 of 2008)
dated May 22, 2008 against our Company before the Consumer Dispute Redressal Forum, Bharuch,
Gujarat (“Forum”). The complainant is one of the subscribers of our Company and has alleged that the
connection provided to him was not working properly and the receiver was faulty. He has claimed an
amount of Rs. 16,000 towards costs incurred by him and compensation for deficiency in service. The
matter is currently pending and the next date of hearing shall be intimated by the Forum in due course.
82.
Mr. Kaiser T. Johar has filed a consumer complaint (complaint petition no. 12 of 2008) dated
December 7, 2007 against our Company and another before the Consumer Disputes Redressal Forum,
Chennai (“Forum”). The complainant is a subscriber of our Company and has alleged that there are
problems with the STB provided to him which have not been rectified despite repeated requests to our
Company. He has claimed an amount of Rs. 3,39,398 towards costs incurred by him and as
compensation for the deficiency in service. The case is currently pending and the next date of hearing
shall be intimated by the Forum in due course.
83.
Mr. Sanjay Aaijak has filed a consumer complaint (complaint petition no. 107 of 2008) dated August 7,
2008 against our Company before the Consumer Dispute Redressal Forum, Farrukhabad, Uttar
Pradesh. The complainant is a subscriber of our Company who has alleged deficiency in service due to
deactivation of the connection on the grounds of piracy. He has claimed reactivation of his connection
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and an amount of Rs. 1,00,000 as costs and compensation for deficiency in service. The case is
84.
Mr. Ajay Sharma has filed a consumer complaint (complaint petition no. 127 of 2008) dated August
28, 2008 against our Company before the Consumer Dispute Redressal Forum, Solan, Himachal
Pradesh. The complainant is a subscriber of our Company who has alleged deficiency in services in
relation to a promotional scheme launched by our Company. He has claimed refund of Rs. 2,500, free
subscription to our services for a period of five months and compensation of Rs. 20,000 towards mental
harassment. The case is currently pending and the next date of hearing is scheduled on December 12,
2008.
85.
Mr. Vir Singh Chouhan (Retd. Captain) has filed a consumer complaint (complaint petition no. 967 of
2008) against our Company and another before the Consumer Dispute Redressal Forum, Jaipur,
Rajasthan. The complainant is a subscriber of our Company who has claimed that he was declared
winner of a lucky draw by our Company. He was intimated that he would receive a Maruti Alto car
upon payment of Rs. 80,069. The complainant claimed to have made this payment by demand draft and
alleged that he did not receive the said car from our Company. The complainant has sought a direction
of delivery of the Maruti Alto car to him or payment of an amount of Rs. 2,35,565 being the value of
the car. He has further claimed a refund of interest on the amount paid by him and a compensation of
Rs. 25,000 towards damages for mental harassment and financial loss and costs of Rs. 16,000. The case
is currently pending and the next date of hearing is scheduled on February 7, 2009.
86.
Mr. M.S.Usmani has filed a consumer complaint (complaint petition no. 848 of 2008) dated August 18,
New Delhi. The complainant is a subscriber of our Company who has alleged deficiency in service on
account of deactivation of the free-of-cost subscription which was to be provided to him for six months
under one of our promotional scheme. He has claimed a compensation of Rs. 1,00,000 towards illegal
disconnection and damages for mental harassment caused to him. The case is currently pending and the
next date of hearing is scheduled on January 6, 2009.
87.
Mr. Narendra Kumar has filed a consumer complaint (complaint petition no. 791 of 2008) dated
August 13, 2008 against our Company and others before the Consumer Dispute Redressal Forum,
Shalimar Bagh, New Delhi. The complainant is a subscriber of our Company who has alleged
deficiency in service on account of poor reception of the channels and signal drop problem. He has
claimed refund of all payments made to our Company till date which includes the down payment of Rs.
3,990 and payments made towards recharge coupons. The case is currently pending and the next date of
hearing is scheduled on January 6, 2009.
88.
Mr. Vikas Gera has filed a consumer complaint (complaint petition no. 600 of 2008) dated July 11,
New Delhi (“Forum”). The complainant is a subscriber of our Company who had subscribed to the
‘parent TV connection’ and a ‘child connection’ and has claimed that the ‘child connection’ subscribed
with an additional investment of Rs. 4,300 was not activated despite repeated requests. He has claimed
refund of an amount of Rs. 8,300 for the two STBs, Rs. 80,000 towards damages and Rs. 11,000 as
costs. The case is currently pending and the next date of hearing shall be intimated by the Forum in due
course.
89.
Mr. Warendra Sinha has filed a consumer complaint (complaint petition no. 797 of 2008) dated July
25, 2008 against our Company and another before the Consumer Dispute Redressal Forum, Shalimar
Bagh, New Delhi. The complainant is a subscriber of our Company who has alleged the inefficiency of
the STB and poor reception of the channels. He has claimed replacement of the faulty STB and
reimbursement of the charges taken in advance and Rs. 1,00,000 towards compensation and costs. The
case is currently pending and the next date of hearing is scheduled on November 28, 2008.
90.
Mr. Dharam Singh has filed a consumer complaint (complaint petition no. 387 of 2008) dated July 8,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Gurgaon. The
complainant is a subscriber of our Company who has claimed that despite the renewal amount of Rs.
1,500 being paid pursuant to a cheque in favour of our Company; his connection was deactivated. He
has claimed reactivation of the connection and Rs. 50,000 towards compensation and costs. The case is
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91.
Mr. Balraj Ranjan has filed a consumer complaint (complaint petition no. 993 of 2008) dated August
26, 2008 against our Company and others before the Consumer Dispute Redressal Forum, Chandigarh
(“Forum”). The complainant and another person had jointly purchased multiple connections for low
cost rentals and subsequently decided to separate the connections. He paid our Company Rs. 1,500 as
charges for the same but his connection was deactivated after a few days on the ground of non payment
of rent. He has claimed reactivation of the connection and Rs. 2,00,000 towards compensation for
mental harassment. The case is currently pending and the next date of hearing shall be intimated by the
92.
Mr. Vinod Kumar has filed a consumer complaint (complaint petition no. 72 of 2008) dated August 19,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Jalor,
Rajasthan (“Forum”). The complainant is a subscriber of our Company who has claimed that despite
having recharged his connection for three months, the services were deactivated within two months. He
has claimed that upon informing our Company of his grievance, he was intimated that the payment for
the third month was credited to another person’s account. Despite assurances from our Company, the
services were not reactivated. He has claimed Rs. 35,700 with interest at the rate of 18% per annum
towards compensation and costs. The case is currently pending and the next date of hearing is shall be
93.
M. Surendra Kumar has filed a consumer complaint (complaint petition no. 264 of 2008) against our
Company before the Consumer Dispute Redressal Forum, Noida, Uttar Pradesh. The complainant is a
subscriber of our Company who has alleged deficiency in service on the ground of poor receipt of
signals despite several complaints having been made to the customer care service of our Company. He
has claimed an amount of Rs. 11,920 towards costs and compensation for deficiency in service. The
case is currently pending and the next date of hearing is scheduled on December 5, 2008.
94.
Mr. Sukesh Ranjan Roy has filed a consumer complaint (complaint petition no. 1 of 2008) dated
October 5, 2007 against our Company and others before the Consumer Dispute Redressal Forum,
Agartala, Tripura. The complainant is a subscriber of our Company who has claimed that the DTH
services were wrongfully deactivated on the grounds of illegal transmission and piracy. He has claimed
Rs. 1,00,00,000 as damages towards compensation and costs. The case is currently pending and the
95.
Mr. Naveen Chand has filed a consumer complaint (complaint petition no. 362 of 2008) dated April 24,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Sheikh Sarai,
New Delhi. The complainant is a subscriber of our Company who has claimed that despite having
recharged his connection for a period of two months, our services were activated only for one month.
He has claimed refund of an amount of Rs. 300 for the subscription charges for one month and
repayment of an amount of Rs. 3,990 as the cost incurred him towards the connection charges. He has
further claimed a compensation of Rs. 25,000 for damages and deficiency in service. The case is
96.
Mr. M. S. Patnaik has filed a consumer complaint (complaint petition no. 79 of 2008) dated July 25,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Koraput,
Jeypore (“Forum”). The complainant is a subscriber of our Company who had purchased subscribed to
our ‘Dish TV maxi subscription’ for a period of 12 months. However, the connection was deactivated
within three months for want of further subscriptions. He has claimed reactivation of the subscription,
Rs. 50,000 towards compensation for mental agony and harassment and Rs. 5,000 as costs. The case is
97.
Ms. Twinkle Dahiya has filed a consumer complaint (complaint petition no. 215 of 2008) dated June 7,
2008 against our Company before the Consumer Dispute Redressal Forum, Noida, Uttar Pradesh. The
complainant is a subscriber of our Company who has claimed that her connection was not installed at
her new residence as a part of our ‘after-sales’ services despite repeated reminders and requests. She
has claimed an amount of Rs. 45,000 towards compensation for mental agony and harassment and costs
for deficiency in service. The case is currently pending and the next date of hearing is scheduled on
December 5, 2008.
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98.
Mr. S.Vijaykumar has filed a consumer complaint (complaint petition no. 70 of 2008) dated March 18,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Chennai
(“Forum”). The complainant is a subscriber of our Company who has claimed that despite due
payment of renewal charges, our Company did not provide the requisite channels as contemplated
under the ‘Dish maxi package’ and that the ‘Sun package’ and sports channels were also blocked. He
has claimed refund of an amount of Rs. 3,540 towards the value of the STB and renewal charges and
Rs. 1,00,000 as compensation for mental agony and harassment and costs for deficiency in service. The
case is currently pending and the next date of hearing shall be intimated by the Forum in due course.
99.
Mr. S. P. Bhardwaj has filed a consumer complaint (complaint petition no. 837 of 2008) dated July 29,
2008 against our Company and another before the Consumer Dispute Redressal Forum, Chandigarh
(“Forum”). The complainant is a subscriber of our Company who has claimed that the hardware
supplied for the DTH connection was faulty and the services provided by our Company were
inefficient. He has further alleged that he had not been receiving any programme since May, 2008. He
has claimed refund of the cost incurred by him towards the equipments purchased by him, with interest
of 24% per annum. The case is currently pending and the next date of hearing shall be intimated by the
100.
Mr. Shaad Mohammad has filed a consumer complaint (complaint petiton no. 53 of 2008) dated May
12, 2008 against our Company and another before the Consumer Dispute Redressal Forum,
Shahjahanpur, Uttar Pradesh. The complainant is a subscriber of our Company who has claimed that he
was declared winner of a lucky draw whereby he was intimated that he would receive a Hero Honda
‘CD Dawn’ motor cycle upon payment of Rs. 11,183. The complainant claimed to have made this
payment by demand draft and alleged that he did not receive the said motor cycle from our Company.
The complainant sought a direction of delivery of the Hero Honda ‘CD Dawn’ motor cycle to him
along with compensation of Rs. 20,000 towards mental agony and harassment. The case is currently
pending and the next date of hearing shall be intimated in due course.
101.
Mr. Kishan Lal has filed a consumer complaint (complaint petition no. 212 of 2008) dated August 20,
2008 against our Company, previously known as ASC Enterprises Limited, before the Consumer
Dispute Redressal Forum, Dausa (“Forum”). The complainant is a subscriber of our Company who has
claimed that he purchased the STB under a scheme whereby the subscription was free but the same was
deactivated without providing reasons. He has claimed reactivation of the connection without any
further charge and an amount of Rs. 15,000 towards compensation for mental agony and harassment.
The case is currently pending and the next date of hearing shall be intimated by the Forum in due
course.
102.
Ms. Mandakini Ramchandra Singhele has filed a contempt petition (petition no. 44 of 2008) against our
Company before the Consumer Dispute Redressal Forum, Aurangabad, Maharashtra (“District
Forum”). The petition is arising out of the order dated June 30, 2007 passed by the District Forum
dismissing the matter and our Company has complied with the order. The complainant is a subscriber
of our Company who has claimed that the STB provided to her was faulty. She has further claimed that
the direction issued to our Company to provide another STB was not complied with by our Company.
She has claimed Rs. 40,000 towards costs and compensation. The case is currently pending and the
next date of hearing shall be intimated by the District Forum in due course.
103.
Mr. Bachchu Lal filed a consumer complaint (complaint petition no. 209 of 2008) dated August 20,
2008 against our Company, previously known as ASC Enterprises Limited, before the Consumer
Dispute Redressal Forum, Dausa (“Forum”). The complainant is a subscriber of our Company who has
claimed that he purchased a STB under a promotional scheme whereby the subscription was free but
the same was deactivated without providing reasons. He has claimed reactivation of the connection
without any further charge and an amount of Rs. 15,000 as compensation for mental agony and
harassment. The case is currently pending and the next date of hearing shall be intimated by the Forum
in due course.
104.
Mr. Magan Bihari Sharma had filed a consumer complaint (complaint petition no. 141 of 2007) dated
August 14, 2007 against NEENL and another before the Consumer Dispute Redressal Forum, Behraich
(“District Forum”). The complainant is a subscriber of our Company who had alleged, inter alia, that
he had subscribed to our ‘Welcome Package’ which was arbitrarily deactivated by our Company. He
has claimed reactivation of the connection without any further charge, an amount of Rs. 5,750
295
alongwith interest and Rs. 10,000 towards compensation for mental harassment. The District Forum,
pursuant to its order dated July 14, 2008 rejected the plea of the petitioner. The petitioner has filed a
review petition before the State Consumer Redressal Forum, Lucknow (“State Commission”) under
Section 195 of the Code of Criminal Procedure, 1973 seeking to set aside the order of the District
Forum. The case is currently pending and the next date of hearing shall be intimated by the State
Commission in due course.
105.
Mr. James E.P. has filed a consumer complaint (complaint petition no. 989 of 2007) dated November
24, 2007 against our Company and another before the Consumer Disputes Redressal Forum, Thrissur,
Kerala (“Forum”). The complainant is a subscriber of our Company and has alleged that the due to
non- reception of signals, the programmes on the television were unclear. He alleged that the defect
was not rectified despite repeated requests and reminders. The complainant has claimed refund of Rs.
5,145 paid by him towards installation and subscription charges and Rs. 10,000 towards compensation
for mental agony and harassment. The case is currently pending and the next date of hearing shall be
106.
Mr. P. Rama Rao has filed a consumer complaint (complaint petition no. 54/2007) dated June 20, 2007
against our Company and another before the Consumer Disputes Redressal Forum North Goa,
Porvorim, Goa (“District Forum”). The complainant is a subscriber of our Company and has alleged
that he has been deprived of any signals or connectivity except for a free channel. The complainant has
claimed a refund of Rs. 4,745 and compensation of Rs. 25,000 towards mental agony and harassment.
The District Forum passed an order dated April 30, 2008 wherein the matter was disposed. The
complainant has filed an appeal against the said order before the State Consumer Forum, Panaji, Goa,
claiming Rs. 15,000 in addition to his previous claims. The case is currently pending and the next date
of hearing shall be intimated in due course.
107.
Mr. A.G. Hari has filed a complaint petition (complaint petition no. 412 of 2005) dated December 2,
2005 against NEENL and another before the District Consumer Disputes Redressal Forum,
Trivandrum. The complainant was one of the subscribers of our Company and has alleged that the STB
was defective and did not function properly. He has claimed a refund of an amount of Rs. 5,000 along
with an interest of 18% per annum as cost incurred by him availing our services, a compensation of Rs.
5,000 towards mental harassment and Rs. 2,000 towards expenses incurred in the litigation. The matter
has been reserved for final order.
108.
Mr. Lal Sahib Singh has filed a complaint petition (consumer petition no. 713 of 2007) dated June 23,
2007 against our Company and others before the District Consumer Disputes Redressal Forum II,
Delhi. The complainant was one of the subscribers of our Company and has claimed that he had paid
the subscription money but the services were not activated even after repeated complaints. The
complainant has alleged mental harassment and has claimed Rs. 75,000 as cost and compensation. The
case is currently pending and the next date of hearing is scheduled on December 18, 2008.
109.
Mr. Kamal Kanta Dash has filed a complaint petition (consumer petition no. 68 of 2008) dated
September 15, 2008 against our Company, formerly known as ASC Enterprises Limited before the
District Consumer Redressal Forum, Boudh, Orissa. The complainant was one of the subscribers of our
Company and has claimed that our Company arbitrarily disconnected his DISH TV connection despite
receiving full payment for activation of the same. He has claimed an amount of Rs. 55,000 towards
compensation for unfair trade practices and mental harassment caused to him. The case is currently
110.
Mr. Rakesh Singh has filed a complaint petition (consumer petition no. 946 of 2008) dated September
17, 2008 against our Company before the District Consumer Redressal Forum, Shalimar Bagh, New
Delhi. The complainant was one of the subscribers of our Company and has claimed that the STB
antenna was not working and was not rectified despite repeated requests and reminders. The
complainant has claimed a refund of Rs. 3, 715 with interest at the rate of 15% per annum. The case is
currently pending and the next date of hearing is scheduled on February 18, 2009.
111.
Mr. Zameer Ahmad Khan has filed a complaint petition (consumer petition no. 165 of 2008) dated
September 5, 2008 against our Company and others before the District Consumer Redressal Forum,
Parbhani (“Forum”). The complainant was one of the subscribers of our Company and has claimed
that our Company arbitrarily disconnected his DISH TV connection. The complainant has claimed re-
296
activation of the connection and a compensation of Rs. 50,000. The case is currently pending and the
112.
Mrs. Naina Chandel has filed an appeal (first appeal no. 235 of 2007) dated June 18, 2007 against our
Company, previously known as ASC Enterprises Limited and another, before the Consumer Dispute
Redressal Commission, Shimla against the order dated May 10, 2007. The appellant had been deprived
of entertainment due to non reception of DISH TV signals and has hence prayed for award of an
amount of Rs. 20,000 as damages for deficiency in service. The case is currently pending and the next
113.
Sqn. Ldr. Sardul Singh has filed a complaint petition (consumer petition no. 777 of 2008) dated
October 18, 2008 against our Company and others before the District Consumer Redressal Forum,
Hyderabad (“Forum”). The complainant was one of the subscribers of our Company and has claimed
that our Company had not installed the connection even after lapse of 20 days after purchase of the
connection. The complainant has claimed immediate installation of the connection and Rs. 21,000
towards compensation as damages for deficiency in service. The case is currently pending and the next
114.
Mr. Shyamlal Chowdhary has filed a complaint petition (consumer petition no. 380 of 2008) against
our Company and others before the District Consumer Redressal Forum, Jodhpur. The complainant
was one of the subscribers of our Company and has claimed that the faulty STB was surrendered to our
Company for rectification. Despite repeated requests and reminders, the STB was not rectified and was
returned to the complainant with the earlier defects. The complainant has claimed installation of a new
STB or refund of Rs. 3,190 towards cost of the defective STB and Rs. 14,100 towards compensation
and costs.The case is currently pending and the next date of hearing is scheduled on December 12,
2008.
115.
Mr. Mahadev Yadav has filed a complaint petition (consumer petition no. 398 of 2008) dated October
15, 2008 against our Company and M/s Jawala Electric Appliances before the District Consumer
Redressal Forum, Tis Hazari, Delhi. The complainant was one of the subscribers of our Company and
has claimed that our Company had disconnected the Dish TV connection before the date of renewal
without prior intimation to the complainant. The services were not activated despite repeated requests
and reminders. The complainant has claimed restoration of the connection and compensation of Rs.
50,000 towards damages. The case is currently pending and the next date of hearing is scheduled on
December 11, 2008.
116.
Mr. K. Dhamodhara Reddy has filed a complaint petition (consumer petition no. 105 of 2008) dated
November 3, 2008 against our Company and another before the District Consumer Redressal Forum,
Chittoor (“Forum”). The complainant was one of the subscribers of our Company and has claimed that
our Company stopped transmission of NDTV and NDTV PROFIT channels without intimation after
the complainant had paid Rs. 930 as six months rental for the same. The complainant further paid Rs.
60 towards new tariff plan for the said channels. The complainant has claimed restoration of the
channels and Rs. 50,000 towards compensation for deficiency in service. The case is currently pending
117.
Mr. Ashok Kumar Kamra has filed a complaint petition (consumer petition no. 681 of 2008) dated
October 3, 2008 against our Company and M/s Vij Mobile Bazaar, a dealer of our Company before the
District Consumer Redressal Forum, Ludhiana (“Forum”). The complainant was one of the subscribers
of our Company and has claimed that the dealer of our Company had offered free viewing of Dish TV
for one week without payment of activation charges so that the complainant was able to choose a
suitable activation plan. The connection was not activated despite various requests and reminders. The
complainant hence paid activation charges but the connection was not activated even after such
payment. The complainant has claimed activation of the connection and Rs. 10,000 towards
compensation for damages. The complainant has further prayed that penalty be imposed on the dealer
of our Company. The case is currently pending and the next date of hearing shall be intimated by the
118.
Mr. Sunny Tangri has filed a complaint petition (consumer petition no. 1189 of 2008) dated October 4,
2008 against NEENL before the District Consumer Redressal Forum, Shalimar Bagh, New Delhi. The
complainant was one of the subscribers of our Company and has claimed that the inspite of payment of
297
six month subscription charges by the complainant, our Company abruptly deactivated the connection,
and the same was not reactivated despite repeated requests and reminders. The complainant has
claimed reactivation of the connection, Rs. 1,00,000 towards damages for deficiency in services and
Rs. 1,000 per day as damages till the reactivation of the connection. The case is currently pending and
the next date of hearing is scheduled on February 18, 2009.
119.
Mr. Ashraf Shah Khan has filed a complaint petition dated October 10, 2008 against our Company and
another before the District Consumer Redressal Forum, Rampur (“Forum”). The complainant was one
of the subscribers of our Company and has claimed that the connection was deactivated without prior
intimation and the same was not restored despite repeated requests and reminders. The complainant has
claimed reactivation of the connection and Rs. 50,000 towards compensation for damages. The case is
120.
Mr. Gaurav Mishra has filed a complaint petition (consumer petition no. 138 of 2008) against our
Company before the District Consumer Redressal Forum, Behraich (“Forum”). The complainant was
one of the subscribers of our Company and has claimed that our Company deactivated the Dish TV
connection abruptly and did not activate the same despite repeated requests. The complainant has
claimed Rs. 42,000 towards costs and compensation. The matter is currently pending and the next date
of hearing shall be intimated by the Forum in due course.
2.
Pending litigation filed by the Company
Civil Suits
1.
Our Company filed a petition (petition no. 198(C) of 2008) dated September 11, 2008 against SUN TV
Network Limited before the Telecom Disputes Redressal and Settlement Tribunal (“TDSAT”)
challenging the public notice dated August 26, 2008 issued by the respondent. The respondents alleged
that our Company had defaulted in making payments and had failed to control piracy by cable
operators. Our Company has prayed that an order be issued directing the respondent not to discontinue
their channels from the DISH TV DTH platforms and to execute an agreement with our Company in
accordance with regulations issued by the Telecom Regulatory Authority of India. The case is currently
pending and the next date of hearing is scheduled on December 3, 2008.
2.
Our Company and Wire and Wireless (India) Limited, one of our Group Companies, filed a petition
(petition no. 206(C) of 2008) against Star Den Media Services Private Limited before the Telecom
Disputes Redressal and Settlement Tribunal. Our Company holds a license for distribution of signals of
TV channels through ‘HITS platform’ and has prayed that the respondent may be directed to provide its
channels to be distributed from our Company’s ‘HITS platform’. The case is currently pending and the
next date of hearing is scheduled on November 28, 2008.
1.
NEENL (later merged with our Company) has filed a complaint (case no. 248 of 2006) against
Pratiksha Cable & Advertising Network (“Pratiksha”) before the Chief Metropolitan Magistrate,
Delhi. Pratikhsa had issued two cheques, each for Rs. 29,000 drawn on the United Western Bank, in
favour of NEENL as consideration for a DTH dealership agreement dated November 18, 2003
executed between NEENL and Pratikha. However, the said cheques were dishonoured due to
insufficient funds. NEENL has thus filed the complaint under section 138 of the Negotiable
Instruments Act, 1881. The case is currently pending and the next date of hearing is scheduled on
December 21, 2008.
2.
Our Company has filed a criminal petition (petition no. 4533 of 2008) dated October 10, 2008 against
Mr. Mahabaleshwar Bhatt before the High Court of Karnataka, Circuit Bench at Dharwad (“High
Court”). This petition is arising from criminal complaint no. 2944 of 2008 filed by Mr.
Mahabaleshwar Bhatt before the Judicial Magistrate First Class, Sirsi, Karnataka against our Company
for infringement of copyright. Our Company has prayed for quashing of the abovestated complaint
under Section 482 of the Code of Criminal Procedure, 1973 The matter is currently pending and the
High Court has granted stay of eight weeks on the proceedings of the abovestated criminal complaint.
The matter is currently pending and the next date of hearing shall be intimated by the High Court in
due course.
298
Tax Cases
1.
Our Company has filed a writ petition (writ petition no. M/S No. 2562 of 2007) against State of
Uttarakhand through its Chief Secretary, Dehradun, Uttarakhand and six others before the High Court
of Uttarakhand. This writ petition is filed challenging the basis of various notices issued by the
Entertainment Tax Department of various districts within Uttarakhand. The writ petition was filed on
the ground that the DTH services do not fall within the purview of Uttar Pradesh Entertainment and
Betting Tax Act, 1979 and that the state government had no jurisdiction to impose the entertainment
tax on DTH services. The High Court of Uttarakhand has allowed the stay application on December 31,
2007 directing our Company to furnish a bank guarantee of Rs. 15,00,000 in favour of the Registrar
General of the High Court of Uttarakhand and has restrained the respondents from proceeding further
subject to our Company furnishing the bank guarantee. The writ petition is currently pending and the
next date of hearing shall be intimated by the court in due course.
2.
NEENL (which has merged with our Company) has filed a writ petition (writ petition no. 839 of 2004)
against State of Uttar Pradesh through its Chief Secretary before the High Court of Allahabad. This
writ petition is filed challenging the demand of entertainment tax levied by the District Magistrate,
Ghaziabad. Our Company made a case that the DTH services do not fall within the purview of U.P
Entertainment and Betting Tax Act, 1979 and that the state government has no jurisdiction to impose
the entertainment tax on DTH services. The High Court of Allahabad accepted our contention and
stayed the recovery of entertainment tax pursuant to its order dated June 21, 2004. The writ petition is
currently pending and the next date of hearing shall be intimated by the court in due course.
Motor Accident Claims
1.
Our Company has filed an appeal before the High Court of Judicature at Gujarat (First Appeal (ST) no.
132 of 2008) against the order of the District Motor Accident Claims Tribunal dated June 27, 2008 ,
where the court had directed our Company, among others, to jointly and severally pay the applicant,
Monikaben a sum of Rs. 50,000 as interim compensation for alleged motor accident by a car owned by
our Company. The appeal is currently pending and the next date of hearing shall be intimated by the
tribunal in due course.
3.
Pending Litigations against our Subsidiaries
A.
Nil
Non payment of statutory dues
For the period between 2002 and 2006, there were dues in relation to the payment of professional tax
amounting to Rs. 39,185. Further, for the period between 2004 and 2006, there were dues in relation to
the contribution towards employees’ state insurnace amounting to Rs. 3,223.
B.
Nil
C.
Nil
4.
Pending litigations against our top five listed Group Companies
A.
Zee Entertainment Enterprises Limited (“ZEEL”)
299
1.
A criminal complaint (No. 607/P of 1996) has been filed by the State of Maharshtra pursuant to a first
information report filed by Mr. Rajeev Suri before the 7th Additional Sessions Judge, Bhoiwada,
against Mr. Santosh Shinde and ZEEL for telecasting the song ‘Rim Jhim Barse” from the film
‘Manzil’ by ZEEL. The matter has been stayed by the High Court pursuant to its order dated December
18, 2006.
Further, a criminal writ petition (criminal writ petition no. 1130 of 2006) by Mr. Santosh Shinde before
the High Court of Bombay March 16, 2006 seeking to quash the first information report filed by Mr.
Rajeev Suri based on a terms of settlement executed between Mr. Rajeev Suri and ZEEL. The criminal
writ petition was admitted on December 18, 2006 and further proceeding has been stayed in the lower
court. The matter is currently pending and the next date of hearing shall be intimated in due course.
2.
The Registrar of Companies, Mumbai has filed a complaint (criminal complaint no. 731 of 2000)
against ZEEL and others before the Additional Chief Metropolitan, Magistrate, 19th Court, Esplanade
dated October 22, 1999. The complainant has alleged that certain share application money was
collected but not refunded by ZEEL in violation of section 113 of the Companies Act and has claimed
refund of the share application money. The matter is currently pending and the next date of hearing
shall be intimated in due course.
3.
The Registrar of Companies, Mumbai has filed a complaint (criminal complaint no. 732 of 2000)
against ZEEL and others before the Additional Chief Metropolitan, Magistrate, 19th Court, Esplanade
dated October 22, 1999. The complainant has alleged that ZEEL failed to refund the excess amounts
received with respect to certain shares in violation of section 73(2B) of the Companies Act and has
claimed refund of the share application money. The matter is currently pending and the next date of
hearing shall be intimated in due course.
Civil Suits
1.
Euro RSCG Advertising Private Limited has filed a civil suit (suit no. 833 of 2002) against ZEEL,
formerly known as Zee Telefilms Limited, Enkay Texofoods Industries Limited and Asia Today
Limited before the High Court of Bombay dated February 18, 2002. ZEEL has been added as codefendant in the suit wherein the plaintiff has sought an order against Enkay Texofoods Industries
Limited to pay an amount of Rs. 23,45,460. The suit has been filed pursuant to suit number 3749 of
2002 filed by Asia Today Limited and ZEEL. The matter is currently pending and shall come up for
hearing in due course.
2.
Mr. Munna Rizvi has filed a civil suit (suit no. 4027 of 2001) against ZEEL and others before the High
Court of Bombay dated October 30, 2001. The plaintiff has alleged illegal utilization and exploitation
of his registered television serial titled ‘Choti Maa’ and has claimed a sum of Rs. 5,00,000 as
compensation. The matter has been transferred to the list of long causes and will come up for hearing in
due course.
3.
HDFC had filed a suit (original application no. 15 0f 2005) against Padmalaya Telefilms before the
Debt Recovery Tribunal – II, Mumbai dated January 5, 2005. ZEEL and Briggs Trading Private
Limited (“Briggs”) had granted inter-corporate deposits of Rs. 7,76,00,000 and Rs. 1,50,59,530
respectively to Padmalaya Telefilms which were refunded by Padmalaya to ZEEL and Briggs. The
Debt Recovery Tribunal added ZEEL and Briggs as necessary parties to the suit. The matter is
4.
M/s High Definition has filed a civil suit (summary suit no. 815 of 2005) against ZEEL before the
High Court of Bombay dated December 21, 2004. The plaintiff has alleged that ZEEL has failed to pay
the consideration for the delivery of 52 episodes of the television programme titled ‘Mehfil-EMushiara’ to the plaintiff and has claimed recovery of Rs. 72,22,756 along with interest of 18% per
annum. The High Court has, pursuant to its conditional order dated February 20, 2006, directed ZEEL
to deposit with the court a sum of Rs. 60,00,000. The matter is currently pending and the next date of
hearing shall be intimated by the High Court in due course.
5.
Neoteric Informatique Private Limited has filed a civil suit (summary suit no. 1033 of 2007) against
ZEEL before the High Court of Bombay dated March 29, 2007. The plaintiff has claimed a
compensation of Rs. 1,58,07,219 along with an interest of 6% per annum. ZEEL has deposited a sum
300
of Rs. 1,25,00,000 in the High Court as a deposit in respect of the claim in the present summary suit
pursuant to an order dated January 22, 2008 passed in the company petition no. 727 of 2007 filed by
the plaintiff against ZEEL. The matter is currently pending and the next date of hearing shall be
intimated by the High Court in due course.
6.
Mr. Pashupathinath Chaudhari has filed a civil suit (suit no. 7500 of 2000) against ZEEL and another
before the City Civil Court of Mumbai dated December 6, 2000. The plaintiff has sought an order from
the court restraining ZEEL to enforce the plaintiff to act in contravention of certain consent terms dated
January 19, 1999 filed in the City Civil Court of Mumbai pursuant to suit no. 4680 of 1995. The matter
is currently pending for recording evidence and the next date of hearing shall be intimated by the court
in due course.
7.
Ultra Video Private Limited has filed a civil suit (suit no. 245 of 2002) against ZEEL and others before
the High Court of Bombay dated December 14, 2001. The plaintiff has sought an injunction restraining
ZEEL and the other defendants from infringing the copyright of the plaintiff in respect of the films
‘Jeeo or Jeena’, ‘Jwala’, ‘Khoon Ka Badla Khoon’, ‘Kundhan’, ‘Pran Jaye Par Vachan Na Jaye’,
‘Ram Bharat Ka Milan’, ‘Sab Ka Ustad’, ‘Sangram’, ‘Sharat’, ‘Smuggler’, ‘Thakur Jernail Singh’,
‘Aya Toofan’, ‘Bhai Bhai’, ‘Hatimtai’, ‘Hira Moti and Jaggu’. The matter is currently pending and the
next date of hearing shall be intimated by the court in due course.
8.
Mr. Mahindra N. Gandhi (karta of HUF) has filed a civil suit (suit no. 4070 of 2001) against ZEEL and
others before the High Court of Bombay dated November 8, 2001. The plaintiff has sought ad-interim
reliefs against the ZEEL and the other defendants restraining them from claiming or infringing the
copyright of the plaintiff in the feature film ‘Shatranj’. The matter is currently pending and the next
date of hearing shall be intimated by the High Court in due course.
9.
PLA Exports Private Limited has filed a civil suit (suit no. 193 of 2001) against ZEEL and others
before the High Court of Bombay dated January 4, 2001 seeking a permanent injunction against the
defendants from infringing the plaintiff’s copyright of the film ‘Saheeb’. The plaintiff has also claimed
a compensation of Rs. 10,00,000 for alleged infringement of its copyright over the said film by the
defendants. The matter is transferred to the list of commercial causes and the next date of hearing shall
be intimated in due course.
10.
Mr. Pratap Barot had filed a civil suit (suit no. 1309 of 2001) against ZEEL before the High Court of
Bombay dated March 27, 2001 seeking to restrain ZEEL from telecasting the film ‘Mahir’ in breach of
a deed of assignment executed between the plaintiff and ZEEL on January 8, 1998 assigning ZEEL the
telecasting rights of the said film for a period of seven years. Pursuant to its order dated April 23, 2001,
the High Court refused to allow an ad-interim injunction, subsequent to which the plaintiff preferred an
appeal (appeal no. 399 of 2001) before the division bench of the High Court in April, 2001. The High
Court pursuant to its order dated May 4, 2001 dismissed the appeal for an ad-interim injunction. The
matter is currently pending and the next date of hearing shall be intimated by the High Court in due
course.
11.
Mr. N. Chandra has filed a civil suit (suit no. 1117 of 2004) against Amruta Films Private Limited and
ZEEL before the High Court of Bombay dated March 24, 2004. The plaintiff has claimed a sum of Rs.
25,00,000 from Amruta Films Private Limited as contemplated under an agreement with respect to a
film ‘Kagaar’. The plaintiff has also sought an order restraining ZEEL from telecasting the said film.
due course.
12.
Mr. A. Krishnamurthy had filed a civil suit (suit no. 3898 of 2000) against International Distributors
and ZEEL before the High Court of Bombay dated September 18, 2000. The plaintiff had claimed
exclusive copyrights over the films ‘Ghar Ek Mandir’, ‘Swarg Se Sundar’, ‘Charno Ki Saugandh’,
‘Meherbaan’ and ‘Sindoor’ and a permanent injunction restraining the defendants from interfering with
the plaintiff’s copyright. The High Court by its order dated October 7, 2003 rejected the notice of
motion filed by the plaintiff seeking an injunction for restraining ZEEL from interfering with the
plaintiff’s copyright. The plaintiff filed appeal no. 1077 of 2003 before division bench of the High
Court of Bombay against the said order, which was dismissed by its order dated February 3, 2004. The
plaintiff thereafter filed a special leave petition no. 19312 of 2004 before the Supreme Court of India
against the order of the division bench of the High Court which was dismissed by the Supreme Court of
301
India pursuant to its order dated March 4, 2005. The matter is currently pending before the High Court
and the next date of hearing shall be intimated in due course.
13.
Mr. Suneel Darshan has filed a civil suit (suit no. 734 of 2007) against Mr. Suraj Prakash Girotra and
ZEEL before the City Civil Court, Mumbai dated February 20, 2007. The plaintiff has sought an
injunction against the defendants from telecasting the movie ‘Mere Jeevan Saathi’ in India, Bangladesh
and Nepal on February 25, 2007 on Zee TV channel in breach of an agreement dated December 29,
2004 executed between the plaintiff and Mr. Suraj Prakash. The notice of motion is currently pending
for final hearing.
14.
Gold Entertainment Private Limited has filed a civil suit (suit no. 361 of 2007) against ZEEL and
others before the High Court of Bombay dated December 29, 2006. The plaintiff has sought an
injunction restraining the defendants from making, manufacturing and selling DVDs of the films of
‘Kya Kehna’, ‘Kunwara’ and ‘Albela’. The matter is currently pending and the next date of hearing
shall be intimated by the High Court in due course.
15.
Navchitra Distributors Private Limited has filed a civil suit (suit no. 1857 of 2008) against Raam Raj
Kalamandir and ZEEL before the High Court of Bombay dated June 9, 2008. The plaintiff has sought
an injunction against the defendants from telecasting the movie ‘Ganga Jamuna Saraswati’ on March
29, 2008 on Zee Cinema. The matter is currently pending for final hearing.
16.
Mr. Maganlal Savani has filed a civil suit ( suit no. 171 of 2007) against M/s. Seven Art Pictures and
others, including ZEEL, in the High Court of Bombay dated November 19, 2007. The plaintiff has
sought an injunction against the defendants from exploiting the rights in the movies ‘Sharafat’
‘Bombay to Goa’ ‘Padosan’ and ‘Anjana’. The matter is currently pending and the next date of hearing
shall be intimated by the High Court in due course.
17.
Mr. Syed Inam Ur Rahaman had filed a civil suit (civil suit no.47 of 2002) against ZEEL and others
before City Civil Court, Hyderabad dated January 1, 2002 alleging wrongful termination of his services
and has claimed a compensation of Rs. 20,00,000 along with interest. The City Civil Court, pursuant to
its order dated February 27, 2004 granted the plea of the plaintiff, subsequent to which ZEEL and the
other defendants preferred an appeal before the High Court of Andhra Pradesh. The High Court,
pursuant to its order dated August 2, 2004 directing ZEEL to deposit an amount of Rs. 5,00,000 in the
court. Aggrieved by this order, ZEEL filed a special leave petition before the Supreme Court of India
(no. 18571 of 2004). The Supreme Court, pursuant to its order dated September 20, 2004 directed Mr.
Syed Inam Ur Rahaman to withdraw the said corpus of Rs. 5,00,000. The matter is currently pending
and the next date of hearing shall be intimated by the High Court in due course.
18.
Mr. D. Narasimha Rao has filed a civil suit (suit no. 69 of 2002) against ZEEL before Civil Judge,
Kamalapuram dated August 2, 2004, seeking an order restraining ZEEL from transferring his shares to
any other person. The matter is currently pending and the next date of hearing shall be intimated to us
by the court in due course.
19.
Mr. G. Sukumer Reddy has filed a civil suit (suit no. 1248 of 1999) against ZEEL before Junior Civil
Judge, Rangareddy dated September 16, 1999 seeking an order restraining ZEEL from transferring his
shares to any other person. The matter is currently pending and the next date of hearing shall be
intimated by the Court in due course.
20.
M/s. Suresh Production and others have filed a civil suit (suit no. 392 of 2003) against ZEEL and
others before the City Civil Judge, Andhra Pradesh dated November 11, 2003. The plaintiffs sought an
injunction restraining the ZEEL from broadcasting 16 films since the broadcasting rights over the same
had expired. The court passed interim orders on November 14, 2003 (pursuant to interim application
numbers 4082 of 2003 and 4096 of 2003) restraining ZEEL from broadcasting the films until the final
disposal of the suit. ZEEL filed an appeal before the High Court of Andhra Pradesh in February, 2004
seeking to set aside the interim injunctions on the ground that the plaintiffs had no right in the said
films on the date of the suit as they had already assigned their rights to other parties. Pursuant to its
order dated April 13, 2004, the matter was remanded to the City Civil Court for being heard afresh. It
passed an order dated April 16, 2007 dismissing the interim applications. The matter is restored and
kept for evidence.
302
21.
Meteor Films has filed a civil suit (suit no. 47 of 1999) against Tam Media Research Private Limited
and ZEEL before the Calcutta High Court on January 10, 1999 seeking an injunction against the
television rating points arrived at by Tam Media Research Private Limited with respect to the
programme ‘Ghar Jamai’ telecast on Zee TV channel. The matter is currently pending and the next
date of hearing shall be intimated by the High Court in due course.
22.
Mr. Vinod Baid has filed a civil suit (suit no. 212 of 213) against ZEEL and others before the Calcutta
High Court seeking to restrain ZEEL from telecasting the serial ‘India’s Most Wanted’ wherein Mr.
Vinod Baid was to be depicted as a person wanted by the police. The matter is currently pending and
the next date of hearing shall be intimated by the High Court in due course.
23.
M/s Lux Hosiery Industries Limited and another have filed a writ petition in the year 2002 against the
Union of India and others, including ZEEL, challenging circulars dated July 9, 2001 and October 18,
2001 issued by the Central Board of Excise which had mandated the levy of service tax by advertisers
notwithstanding the payment of advertisement and service tax by them to the advertisement agencies.
due course.
24.
Ms. Rekha Wadhwa has filed a civil suit (suit no. 1255 of 2000) against ZEEL before the City Civil
Court, Kolkata July, 2000 seeking a declaration for ownership and restraining ZEEL from transferring
and issuing duplicate shares to any other third party. The matter is currently pending and the next date
of hearing shall be intimated by the court in due course.
25.
Mr. Ramnath Poddar has filed a civil suit (suit no. 309 of 1996) against ZEEL and others before the
City Civil Court seeking ZEEL to issue duplicate share certificates to him as he had lost the original
share certificates. The matter is currently pending and the next date of hearing shall be intimated by the
court in due course.
26.
M/s Channel 8 has filed a civil suit (suit no. 782 of 2001) against ZEEL before the District Court,
Calcutta dated seeking a permanent injunction restraining ZEEL from telecasting a specified Bengali
film. The matter is currently pending and the next date of hearing shall be intimated by the court in due
course.
27.
Mr. Dilip Kankaria has filed a civil suit (suit no. 782 of 2001) against ZEEL before the Calcutta High
Court seeking an injunction restraining ZEEL from telecasting the films ‘Desh Prem’ and ‘Itihas’. The
course.
28.
M/s Hachette Filipacchi has filed a civil suit (suit no. 104 of 1999) against Badgamia Films Private
Limited and others, including ZEEL, before the Calcutta High Court dated March 4, 1999 seeking an
injunction restraining the respondents from telecasting certain specified programmes. The High Court,
pursuant to its interim order dated June 18, 1999 directed the respondents not to use the word ‘Premier’
while telecasting the specified programmes. The matter is currently pending and the next date of
29.
M/s Mittal Investment has filed a petition (appeal no. 202 of 2007) against ZEEL before the High
Court of Gujarat dated August 9, 2007. The petition is an appeal against the order of the Company Law
Board dated June 20, 2007 wherein the petitioner’s claim for 1,000 shares of ZEEL was rejected. The
course.
30.
Major General M.S. Ahluwalia has filed a suit (suit no. 622 of 2002) against Tehelka.Com and others,
including ZEEL, before the Delhi High Court on March 7, 2002. The plaintiff has alleged that the
defendants had defamed him and the Indian army by telecasting certain programmes. He has claimed a
compensation of Rs. 2,00,00,000. The matter is currently pending and the next date of hearing is
scheduled to be on January 29, 2009.
31.
Mr. Rajkumar Gupta has filed a suit (suit no. 813 of 2002) against Buffalo Networks Private Limited
and others, including ZEEL, before the Delhi High Court on March 11, 2002. The plaintiff has alleged
that he was defamed by the defendants who had telecast a programme which had concocted certain
303
facts pertaining to him. He has sought a permanent mandatory injunction restraining the defendants
from telecasting the said programme and has also claimed a compensation of Rs. 50,00,000. The matter
is currently pending and the next date of hearing shall be intimated by the High Court in due course.
32.
Inspector Anil Kumar has filed a suit (suit no. 887 of 1998) against I. Sky B and others, including
ZEEL, before the Delhi High Court on May 1, 1998. The plaintiff has alleged that the defendants had
defamed him in the programme titled ‘India’s Most Wanted’. He has claimed a mandatory injunction
restraining the defendants from telecasting the said programme and has also claimed a compensation of
Rs. 10,00,000. The matter has been transferred to the Tis Hazari Court, New Delhi on grounds of
pecuniary jurisdiction. The matter is currently pending and the next date of hearing is scheduled to be
on December 16, 2008.
33.
Mr. Satyavir Singh has filed a suit (suit no. 262 of 2001) against ZEEL before Delhi High Court on
February 6, 2001. The plaintiff has alleged that the defendant had defamed him in the programme titled
‘India’s Most Wanted’. He has sought an injunction restraining the defendant from telecasting the
programme and has also claimed a compensation of Rs. 15,00,000. The matter has been transferred to
the Tis Hazari Court, New Delhi on grounds of pecuniary jurisdiction. The matter is currently pending
and the next date of hearing is scheduled on December 16, 2008.
34.
Mr. Ashok Kumar Rana has filed a suit (suit no. 539 of 2001) against ZEEL before the Delhi High
Court on March 15, 2001. The matter has now been transferred to the Tis Hazari District Court, Delhi.
The plaintiff has alleged that the defendant had defamed him in a programme titled ‘India’s Most
Wanted’. He has sought an injunction restraining ZEEL from telecasting the programme and has
claimed a compensation of Rs. 10,00,000. The matter has been transferred to the Tis Hazari Court,
New Delhi on grounds of pecuniary jurisdiction. The matter is currently pending and the next date of
hearing is scheduled to be on December 16, 2008.
35.
M/s Raga Production has filed a suit (suit no. 995 of 1998) against Mr. Shohaib Ilyasi and others,
including ZEEL before the Delhi High Court on May 18, 1998, which has subsequently been
transferred to the Tis Hazari District Court, Delhi. The plaintiff has alleged that Mr. Shohaib Ilyasi had
stolen certain scripts prior to resigning from the plaintiff’s organization and has sought an injunction
restraining the defendants from using the stolen scripts and materials to telecast similar programmes.
The matter has been dismissed but a restoration application is pending to be decided. The matter is
currently pending and the next date of hearing shall be notified in due course.
36.
TIYL Production California Limited has suit (suit no. 1853 of 2002) against ZEEL and others before
Delhi High Court on November 6, 2002. The plaintiff has claimed that the television programme
‘Jeena Isika Naam Hai’ telecast by the defendants have been adopted from the programme ‘This Is
Your Life’ produced by the plaintiff without having any authorization for the same. The plaintiff has
claimed a compensation of Rs. 20,00,000, has sought a rendition of accounts and an injunction
restraining the defendants from telecasting the said programme. The matter is currently pending and the
next date of hearing shall be notified in due course.
37.
Mr. D.K. Thakkur has filed a writ petition (civil writ petition no. 207 of 2004) against Union of India
and others, including ZEEL, before the Supreme Court of India on April 20, 2004. The petitioner has
sought an injunction restraining the defendants from telecasting the election exit polls. The matter is
38.
Mr. Madhu Mukul Tripathi has filed a writ petition (civil writ petition no. 1194 of 2006) against Union
of India and others, including ZEEL, before the Delhi High Court on January 9, 2006. The petitioner
has sought for a direction against the defendants to transmit and re-transmit films, advertisement,
features, serials, audio or video live performances except those which are on the line of ‘U’ certified
films telecast on the television through VCRs and VCDs. The matter is currently pending and the next
date of hearing shall be notified in due course.
39.
M/s. Nahata Ltd. has filed a civil suit (no. 3516 of 1992) against M/s. Seven Art Pictures and Others.
The plaintiff has filed an interim application (IA No. 8799 of 2008) for impleading ZEEL as a
necessary party to the suit. The application is scheduled for hearing shall be intimated in due course.
304
40.
Mr. Jyothischandran has filed a complaint (original petition no. 44 of 2005) against ZEEL and others
before the National Consumer Disputes Redressal Commission on March 2, 2005. He has sought an
injunction restraining ZEEL and the other respondents from telecasting the programme ‘Mahalotto’
and other such promotional schemes. A notice has been issued to the complainant for appearing in the
matter before the said forum. The matter is currently pending and the next date of hearing shall be
intimated by the Commission in due course.
41.
M/s Gauttam and Co. has filed a suit (suit no. 734 of 2008) against ZEEL before the 15th Assistant
Judge, City Civil Court, Chennai claiming its rights over 100 equity shares of ZEEL. The matter is
currently pending and the next date of hearing shall be intimated in due course.
42.
M/s Shakti Films has filed a suit (suit no. 30 of 2001) against ZEEL and others before the Civil Judge,
Senior Division, Gandhinagar dated April 18, 2001. The plaintiff has alleged that it has exclusive rights
to the Gujarati film titled ‘Aankh Na Ratan’ aired by the defendant in Alpha Gujarati Channel in June,
2001. The plaintiff has claimed a compensation of Rs. 1,00,000 as compensation from the defendant.
The matter is currently pending and the next date of hearing shall be notified in due course.
43.
M/s Essel Vision has filed an appeal (appeal no. 147 of 2007) against Mr. Irshad Shahni and others,
including ZEEL, before the High Court of Delhi on March 20, 2007 against the order dated September
14, 2006 passed by the Additional District and Session Judge, Fast Track Court, Tis Hazari Court,
Delhi, wherein Mr. Irshad Shahni had claimed that there is no privity of contract between the parties
regarding screening of the movie ‘Agni Sakshi’ at Odeon Cinema and that M/s Essel Vision did not
have the rights to screen the said film. The High Court has issued notices to the parties in the litigation
and the next date of hearing shall be intimated by the High Court in due course.
44.
Mr. Basant K. Jaiswal has filed a suit (suit no. 1192 of 2006) against M/s J K Creations and others,
including ZEEL, on May 9, 2006 in the Tis Hazari Court seeking a mandatory injunction against the
defendants restraining them from telecasting the film ‘Meri Bibi Ka Jawab Nahin’. The matter is
45.
Twentieth Century Fox Film Corporation has filed a suit (application no. 1381 of 2002 in civil suit no.
208 of 2004) against ZEEL and another before the Delhi High Court on March 4, 2004 for protection
of its trademarks and for restraining the defendants from using the mark ‘FX Channel’. The matter is
46.
Indian Performing Rights Society Limited and Phonographic Performance Limited has filed a suit (suit
no. 1216 of 2007) ZEEL and others before Delhi High Court on July 7, 2007 seeking a mandatory
injunction restraining the defendants from playing certain songs on the channels in different format
without obtaining licences from Indian Performing Rights Society Limited. The matter involves an
amount of Rs. 15,34,15,000. The next date of hearing shall be intimated by the High Court in due
course.
Action initiated by SEBI
SEBI had issued a show cause notice on February 11, 2005 against ZEEL, alongwith certain Promoters of our
Company, advising them, inter alia, to show cause as to why suitable directions under the SEBI Act read with
SEBI (Prohibition of Fradulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003
should not be issued against them. Pursuant to the said show cause notice, SEBI has passed an order dated
March 19, 2008 (order no. WTM/TCN/91/IVD2/03/2008) against ZEEL and certain Promoters on grounds on
aiding and abetting certain entities relating to Mr. Ketan Parekh in large scale manipulation of shares of ZEEL.
Pursuant to the said order, SEBI has warned ZEEL and the said Promoter companies and has cautioned that any
similar activity or instances of violation or non-compliance of the provisions of the SEBI Act, 1992 and the
rules and regulations framed thereunder shall be dealt with stringently.
B.
1.
A criminal case (no. 252 of 2004) has been filed against ETC Networks Limited before the Chief
Judicial Magistrate, Saraikela alleging criminal breach of trust and cheating under sections 406 and 420
305
of the Indian Penal Code, 1860. The matter is currently pending and the next date of hearing shall be
intimated by the court in due course.
2.
U.V Educational Society has filed a criminal case against ETC Networks Limited before the Chief
Judicial Magistrate, Kanpur (case no. 14668 of 2006) alleging criminal breach of trust, cheating and
criminal conspiracy under sections 406, 420 and 120B of the Indian Penal Code, 1860. The company
filed a petition before the High Court of Allahabad under section 482 of the Code of Criminal
Procedure seeking a stay on the proceedings pursuant to which the High Court has stayed the
proceedings. The matter is currently pending and the next date of hearing shall be intimated in due
course.
3.
The Brihanmumbai Municipal Corporation has filed a complaint against ETC Networks Limited before
the Metropolitan Magistrate, Vile Parle, on March 12, 2008, alleging that the company does not hold a
valid factory permit. A summons was received by ETC Networks Limited under section 390 of the
Mumbai Municipal Corporation Act, 1888 on March 7, 2008. A criminal revision application has been
filed before the Sessions Court, Mumbai and the next date of hearing shall be intimated in due course.
Civil Suits
1.
Ms. Manjri Heda has filed a civil suit (Suit no. 5 of 2005) against ETC Networks Limited before the
Civil Judge, Nashik in February, 2005 for recovery of a sum of Rs. 3.32 Lakhs. ETC Networks Limited
has filed a written statement and an affidavit disputing the claim. The matter is currently pending and
the next date of hearing, shall be intimated by the Court in due course.
2.
Mr. Rajneesh Kanwar has filed a civil suit (Suit no. 233 of 2003) against ETC Networks Limited
before the Lower Corut, Hamirpur in May, 2003 claiming a refund of franchisee fees of Rs. 50,000.
The matter is currently pending and the next date of hearing shall be intimated by the Court in due
course.
3.
Ms. Saraswati Maheshwari has filed a civil suit against ETC Networks Limited before the Civil Judge,
Gwalior in April, 2007 claiming royalty dues pursuant to termination of her services from Kidzee
Saraswati Maheshwari Center at Gwalior. The matter is placed for order and the next date of hearing
shall be notified in the due course.
4
M/s Icon Innovative Training Center Limited (“Plaintiff”) has filed a civil suit (Suit no. 642 of 2001)
against ETC Networks Private Limited before the High Court of Madras seeking permanent injunction
restraining ETC Networks Limited from interfering with the running of the Plaintiff’s computer
training center. The Plaintiff has also sought recovery of a sum of Rs. 11 Lakhs alongwith interest
against ETC Networks Limited. The matter is currently pending and the next date of hearing shall be
Consumer Cases
1.
Ms. Saroj Bala has filed a complaint petition (consumer case no. 1093 of 2002) against ETC Networks
Limited before the State Consumer Disputes Redressal Forum in June, 2001 alleging ineligibility and
deficiency of doctors in the ‘post graduate diploma in computer application of Kurukshetra University’
programme admitted by Zed Computer Academy, Hissar. The complaint was initially heard by the
District Consumer Dispute Redressal Forum which had, pursuant to its order ordered Zed Computer
Academy, an academy promoted by ETC Networks Limited, and Kurukshetra University to pay an
amount of Rs. 60,000 to the complainant. The complaint has thereafter approached the State Consumer
Redressal Forum wherein Zed Computer Academy and Kurukshetra University have been added as
pro-forma defendants. The matter is currently pending and the next date of hearing shall be intimated
by the in due course.
2.
Ms. Riti Srivastava has filed a consumer complaint (consumer complaint no. 802 of 2007) before the
District Consumer Disputes Redressal Forum, Lucknow against ETC Networks Limited, formerly, Zee
Interactive Learning Systems Limited, claiming a refund of fees of Rs. 7,750, a compensation of Rs.
20,000 as damages and Rs. 3,500 towards costs of the suit. The matter is currently pending and the next
date of hearing is scheduled on January 5, 2009
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3.
Mr. Sanwar Lal has filed a consumer complaint (consumer complaint no. 118 of 2008) before the
District Consumer Disputes Redressal Forum, Jaipur against ETC Networks Limited, formerly Zee
Interactive Learning Systems Limited, claiming a sum of Rs. 2.35 Lakhs towards compensation and
cost of the complaint. The matter is currently pending and the next date of hearing is scheduled on
January 13, 2009.
C.
Nil
D.
Zee News Limited
1.
Mr. Mukti Nath Jha has filed a criminal complaint (complaint case no. 1100 of 2005) against Mr.
Manabendra Nath Roy and others, including Zee News Limited, before the Chief Judicial Magistrate,
Howrah. The complainant has alleged defamation in a programme titled ‘Oder Bolte Dao’ telecast in
Zee Bangla channel and has also claimed a compensation of Rs. 40,00,000. The matter is currently
pending and the next date of hearing shall be intimated by the court in due course.
2.
Mr. Deepak Nikhalje has filed a criminal complaint (criminal complaint no. 3701879/SS of 2007)
against Zee News Limited and others before the 37th Sessions Court, Esplanade, Mumbai dated June
26, 2007 alleging defamation in a news item telecast on Zee News channel on May 28, 2007. The court
has issued summons on the respondents pursuant to its order dated June 26, 2007. The matter is
currently pending and the next date of hearing shall be intimated by the Court in due course.
Zee News Limited and the other respondents have filed two criminal revision applications nos. 963 of
2007 and 945 of 2007) against Mr. Deepak Nikhalje before the 58th Sessions Court, Mumbai in August,
2007 seeking to quash the order passed by the 37th Sessions Court on June 26, 2007. The matters are
currently pending and the next date of hearing shall be intimated by the Court in due course.
Civil Suits
1.
Leisure Sports Management Private Limited has filed a civil suit (suit no. 48 of 2001) against Zee
News Limited and another before the District Court, Calcutta dated September 20, 2000. The plaintiff
has claimed that the television serial titled ‘Thana Theke Bolchi’ telecast by the defendants was the
concept of the plaintiff and that the respondents have infringed upon its copyright. The District Court
passed an ad-interim order dated April 9, 2001 restraining the defendants from telecasting the said
serial till the disposal of the suit. The defendants filed an application for rejection of the plaintiff’s
plaint which was rejected by the District Court pursuant to its order dated February 28, 2002. The
matter is currently pending and the next date of hearing shall be intimated by the court in due course.
2.
Ms. Niki Francis D’Souza has filed a civil suit (suit no. 51 of 2007) against Zee News Limited and
others before the High Court of Mumbai dated January 12, 2007. The plaintiff has alleged defamation
in an episode titled ‘Shatir Sundari’ telecast on Zee News channel on April 21, 2005 and has claimed a
compensation of Rs. 30,000,000. The matter is currently pending and the next date of hearing shall be
3.
Mr. Prashant K. Mehta has filed a civil suit (suit no. 582 of 2008) against Zee News Limited and others
before the High Court of Mumbai dated February 11, 2008 alleging defamation by the defendants in a
programme ‘The Inside Story’ telecast and retelecast by the defendants on November 28, 2007 and
November 29, 2007. He has claimed a compensation of Rs. 5,000 Lakhs. The matter is currently
pending and the next date of hearing shall be intimated by the High Court in due course.
4.
Indian Performing Rights Society Limited and Phonographic Performance Limited have filed a suit
bearing CS (OS) No. 1356/2007 on 15.07.2007 in Delhi High Court against Mr. Laxmi Narain Goel as
Defendant no. 1 and Zee News Limited as Defendant no. 2 seeking mandatory injunction on the
popular show ‘Sa Re Ga Ma Pa’ aired on Zee Bangla and Zee Marathi. The damages to the tune of Rs.
25 Lakhs has been claimed. The matter is pending in the High Court of Delhi and the next date of
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Arbitration Proceedings
1.
Mr. Jayprakash K. Pamnani has filed an appeal before the High Court of Mumbai (Show Cause Notice
no. 1631 of 2006) against Mr. Arjundas T. Kashyap and others, including ZNL, against the order
passed dated December 14, 2006 in appeal no. 723 of 2004, which was, in turn, an appeal preferred
against the order passed by a single judge bench in arbitration petition no. 57 of 2004. The Court
Receiver has issued show cause notices to various news channels including Zee News channel for
telecasting a news item pertaining to a boy sealed inside a house. The matter is currently pending and
the next date of hearing shall be intimated by the High Court in due course.
2.
Mr. Rathin Majumdar has filed an arbitration petition (arbitration petition no. 174 of 2003) against
ZNL before the Calcutta High Court dated July 3, 2003. The matter pertained to an agreement executed
between Mr. Rathin Majumdar and ZEEL for telecasting a serial titled ‘Nayantara’ spanned upto 300
episodes. The petitioner alleged that the said serial exceeded by 34 episodes and has claimed a
compensation of Rs. 17,50,000. The arbitrator has, pursuant to his award directed the respondents to
pay the aforesaid amount of compensation. An appeal was filed before the High Court to set aside the
award. The matter is currently pending and the next date of hearing shall be intimated by the High
Court in due course.
E.
Nearly all of the litigations pending against the company are in the name of Siti Cable Network Limited, as all
these cases have been transferred from Siti Cable Network Limited to the company pursuant to the provisions of
the Scheme of Arrangement.
Criminal Complaints:
1.
A criminal complaint was filed against Siti Cable Network Limited (Criminal Complaint No. 121 of
1996) for violation of copyright of the film ‘Bhago Bhoot Aya’ on May 14, 1996 before the Additional
Chief Metropolitan Magistrate, Esplanade, Mumbai, and warrants have been issued against certain
employees of Siti Cable Network Limited. The matter is currently pending for trial.
Foreign Exchange
1.
Siti Cable Network Limited has filed an appeal (Appeal No. 648 of 2003) before the Appellate
Tribunal for Foreign Exchange, New Delhi, dated December 10, 2003, challenging the arbitration
adjudication order (Order no. adj/11/B/AAO/BT/03) dated October 31, 2003, issued by the Additional
Commissioner (Adjudication Authority), Enforcement Directorate, Mumbai, by which penalty of Rs.
125 Lakhs was imposed on Siti Cable Network Limited for alleged violation of Section 8(3) and 8(4)
of Foreign Exchange Regulation Act, 1973 on account of failure in submission of exchange control
copy of bill of exchanges as evidence of import of goods. Siti Cable Network Limited has prayed for
setting aside of the adjudication order dated October 31, 2003 on the ground that mere non-submission
of bill of exchange could not be a ground for penalty and the company has submitted the bill of lading
as a proof of import of goods. The Appellate Tribunal for Foreign Exchange, New Delhi, has issued an
interim order dated April 29, 2004, by which it has waived Rs. 110 Lakhs of the penalty amount and
has issued instruction to Siti Cable Network Limited for deposit of Rs. 15 Lakhs. The next date of
hearing shall be intimated by the Appellate Tribunal in due course.
Copyright Cases
1.
Columbia Pictures Industries and others have filed a suit (Suit no. 1421 of 1999) dated July 7, 1999,
against Siti Cable Network Limited, before the High Court of Delhi praying for permanent injunction
restraining Siti Cable Network Limited from telecast of certain foreign films and rendition of accounts
for alleged infringement of copyright of certain foreign films on which the plaintiff owns copyright.
The suit is currently pending. The next date of hearing is scheduled to be on January 13, 2009.
2.
Super Cassettes Industries Limited has filed a suit (Suit No. 372 of 2003) dated January 8, 2003 against
Siti Cable Network Limited, before the High Court of Delhi praying for permanent injunction
restraining Siti Cable Network Limited from the telecast of the film ‘Aap Ko Pehle Bhi Kahin Dekha
308
Hain’ on the ground that Siti Cable Network Limited is likely to infringe their copyright on the film by
telecasting the film. The matter is currently pending and the next date of hearing shall be intimated by
the High Court in due course.
3.
Super Cassettes Industries Limited has filed a suit (Suit no. 440 of 2005) dated April 5, 2005 against
restraining Siti Cable Network Limited from the telecast of the film ‘Lucky No Time For Love’ on the
ground that Siti Cable Network Limited is likely to infringe their copyright on the film by telecasting
the film. The matter is currently pending and the next date of hearing shall be intimated by the High
Court in due course.
4.
I Dream Productions Private Limited has filed a suit (Suit no. 1812 of 2003) dated September 30, 2003,
restraining Siti Cable Network Limited from the telecast of the film ‘16 December’ on the ground that
Siti Cable Network Limited is likely to infringe their copyright on the film by telecasting the film. The
course.
5.
I Dream Productions Private Limited has filed a suit (Suit no. 600 of 2005) dated May 5, 2005 against
restraining Siti Cable Network Limited from the telecast of the film ‘Naina’ on the ground that Siti
Cable Network Limited is likely to infringe their copyright on the film by telecasting the film. The suit
is currently pending and the next date of hearing is scheduled to be on November 28, 2008.
6.
I Dream Productions Private Limited has filed a suit (Suit no. 1131 of 2002) dated July 11, 2002
restraining Siti Cable Network Limited from the telecast of the films ‘Bend It Like Bekham’, ‘Footbal
Shootbal Hai Rabba’, ‘Jajantaram Mamantaram’ and ‘Agni - Varsha’ on the ground that Siti Cable
Network Limited is likely to infringe their copyright on the film by telecasting these films. The matter
is currently pending.
7.
Gemini Television Private Limited has filed a suit (Suit no. 280 of 1999) dated December 10, 1999,
against Siti Cable Network Limited, before the District Court, Hyderabad praying for permanent
injunction restraining Siti Cable Network Limited from the telecast of a Telugu film on the ground that
Siti Cable Network Limited is likely to infringe their copyright on the film by telecasting the film. The
suit has been transferred to fast track court which shall issue fresh notices to the parties for appearance.
8.
Ushodaya Enterprises Limited has filed a suit (Suit no. 667 of 1999) dated August 10, 1999, against
Siti Cable Network Limited, before the City Civil Court, Hyderabad praying for permanent injunction
restraining Siti Cable Network Limited from the telecast of a Telugu film on the ground that Siti Cable
Network Limited is likely to infringe their copyright on the film by telecasting the film. The suit is
pending for filing of original documents and fresh notices shall be issued by the court.
9.
Cable Video India Limited has filed a suit (Suit No 1082 of 2000) dated March 14, 2000 against Siti
Cable Network Limited, before the High Court of Bombay praying for permanent injunction restraining
Siti Cable Network Limited from the telecast of the film ‘Ghazab’ on the ground that Siti Cable
Network Limited is likely to infringe their copyright on the film by telecasting the film. The matter is
currently pending and the next date of hearing shall be intimated by the High Court in due course.
10.
Siti Cable Network Limited from the telecast of the film ‘Aulad Ke Dushman’ on the ground that Siti
Cable Network Limited is likely to infringe their copyright on the film by telecasting the film. The
course.
11.
Siti Cable Network Limited from the telecast of the film ‘Chor Ho To Aisa’ on the ground that Siti
309
Cable Network Limited is likely to infringe their copyright on the film by telecasting the film. The
matter is currently pending and the next date of hearing shall be intimated by the court in due course.
12.
Cable Video India Limited has filed a suit (Suit No.1125 of 2000) dated March 16, 2000 against Siti
Siti Cable Network Limited from the telecast of the film ‘Fakira’ on the ground that Siti Cable
Network Limited is likely to infringe their copyright on the film by telecasting the film. The matter is
currently pending and the next date of hearing shall be intimated by the court in due course.
13.
Kaleidoscope Entertainment has filed a civil suit (Suit no. 1111 of 2005) dated August 10, 2005 against
Siti Cable Network Limited and others, before the High Court of Delhi for permanent injunction
restraining Siti Cable Network Limited from the telecast of the film ‘Mangal Pandey’ on the ground
that Siti Cable Network Limited is likely to infringe their copyright on the film by telecasting the film.
due course.
Arbitration Proceedings
1.
Franchnet Cable Services Limited and others have filed a statement of claim dated October 14, 1999,
for arbitration proceeding against Siti Cable Network Limited before the Arbitration Tribunal, Mumbai
claiming an amount of Rs. 612 Lakhs as compensation for alleged breach of the terms of the agreement
dated September 8, 1995 entered between the parties. Siti Cable Network Limited has filed a counter
claim for Rs. 177.2 Lakhs. The arbitration proceeding is currently pending for final arguments and the
next date of hearing is awaited.
2.
Deba Associates Private Limited invoked arbitration clause of the Services and Civil Works Agreement
dated July 17, 2000 between Zee Interactive Multimedia Limited (later merged with Siti Cable
Networks Limited) for recovery of outstanding dues amounting to Rs. 16 Lakhs by its notice dated July
18, 2004. The arbitrator passed an ex-parte award dated April 29, 2006 for payment of Rs. 16 Lakhs by
Siti Cable Networks Limited. Siti Cable Networks Limited filed an application dated July 26, 2006
before the District Court, Delhi to set aside the award of the arbitrator. The District Court passed an
order dated August 17, 2007 which has been challenged by Siti Cable Networks Limited pursuant to a
writ petition (No. 175996) dated December 12, 2007 before the High Court of Delhi. The matter is
currently pending before the High Court and the next date of hearing shall be intimated in due course.
Labour Proceedings
1.
Maharastra Kamgar Sangh has filed a complaint (DYCL/CG-T/D-28) dated July 9, 2002 against Siti
Cable Network Limited, before the Assistant Labour Commissioner, Mumbai for re-instatement of
certain workmen, the Assistant Labour Commissioner had referred the dispute to Industrial Tribunal,
Mumbai by its order dated January 4, 2007. The matter is currently pending for the filing of a reply by
the respondents. The tribunal by its order dated June 12, 2006 disposed of (IT) No. 31/2004 following
which a fresh reference was made to the Labour Court (IDA No. 6 of 2007) dated February 2, 2007 and
the matter is currently pending.
2.
Syed Inam Ur Rahaman had filed a suit (Suit no. 47 of 2002) dated January 1, 2002, against Siti Cable
Network Limited and others before the City Civil Court, Hyderabad for declaration that the termination
of his services by Zee Entertainment Enterprises Limited is wrongful and has claimed damages for an
amount Rs. 20 Lakhs with interest. The City Civil Court by judgment dated February 27, 2004 had
directed both Zee Entertainment Enterprises Limited and Siti Cable Network Limited to pay to the
plaintiff amount of Rs. 20 Lakhs with interest. Against this order Zee Entertainment Enterprises
Limited filed an appeal before the High Court of Andhra Pradesh. The High Court of Andhra Pradesh
by its interim order dated August 2, 2004 while granting interim suspension of the impugned order also
directed Zee Entertainment Enterprises Limited to deposit a sum of Rs. 5 Lakhs to be withdrawn by the
respondent without furnishing any security. Against this order Zee Tele-films Limited has filed a
special leave petition dated August 28, 2004 before the Supreme Court of India (SLP (C) No. 18571 of
2004), where Siti Cable Network Limited has been named as a respondent (proforma party). The
Supreme Court by its order dated October 12, 2004 has stayed the execution of the decree passed by
the District Court upon the deposit of Rs. 5 Lakhs by the petitioners which deposit is not to be
310
withdrawn during the pendency of the petition. The matter is currently pending and the next date of
hearing shall be intimated by the Court in due course.
3.
Anjali Zalapuri has filed a complaint (No. 735 of 2006) dated November 23, 2005 against Siti Cable
Network Limited before the Divisional Consumer Forum, Jammu under section 10 of the Jammu &
Kashmir Consumer Protection Act, 1987 claiming recovery of her provident fund dues amounting to
Rs. 18,520 for the period between 1995 and 2000. The complainant has also demanded a sum of Rs.
10,000 as compensation. The matter is currently pending.
Civil Disputes
1.
Madhu Mukul Tripathi has filed a public interest litigation (writ petition (civil) no. 1194-95/2006)
dated January 9, 2006, where Siti Cable Network Limited has also been included as a party, before the
High Court of Delhi. The petitioner has claimed that television channels are telecasting obscene and
vulgar shows on television which is corrupting the minds of the children of India and is against their
right to life of the children and provisions of the Cable Television Networks (Regulation) Act, 1995.
The petitioner has prayed before the court to issue orders prohibiting transmission and re-transmission
of all shows other than those certified for unrestricted exhibition on the lines of ‘U’ certified films. The
petition is currently pending for the company to file a report indicating the compliance of directions of
the MIB.
2.
Supervision Cable Network has filed a petition against the Company before the TDSAT seeking a stay
on an impugned notice dated November 22, 2007 issued by the Company on the ground of nonpayment of subscription charges amounting to Rs. 0.28 Lakhs. The Company has filed its reply
denying the allegations of the petitioner. The TDSAT by its order dated December 11, 2007 has
directed the Company not to disconnect signals to Super Vision Cable Network in pursuance of the
impugned notice until the next date of hearing. The matter is currently pending and the next date of
hearing shall be intimated by the TDSAT in due course.
3.
Bedi Cable Network has filed a suit for injunction against the Company before the District Court at
Amritstar seeking to restrain the Company from de-activating the channel signals. The Company has
filed an application for dismissal of suit on the ground that the District Court does not have jurisdiction
under the Telecom Regulatory Authority of India Act, 1997. The District Court has reserved its order
and the next date of hearing shall be intimated by the court in due course.
4.
The Municipal Council of Hissar has filed a suit for permanent injunction against the Company before
District Court at Hissar seeking to restrain the company from broadcasting channel signals of various
broadcasters without payment of charges as per Haryana Municipal (Laying of Communication, Cables
and Erection of Dish Antenna) Bye-Laws 2007 framed pursuant to a notification dated October 31,
2007 issued by the Government of Haryana. The Company has received a notice from the court for
filing its reply. The matter is currently pending and the next date of hearing shall be intimated by the
court in due course.
5.
Our Company received a notice dated April 7, 2008 from Star Den Media Services Private Limited
(post publication of a public notice in the newspaper on June 14, 2008) on the grounds of non-payment
of outstanding subscription charges in the Delhi region. In response to this notice our Company has
filed a petition before the TDSAT. The TDSAT by its order dated July 7, 2008 has stayed the public
notice on the condition that our Company pay subscription charges based on the previous agreement
dated December 25, 2006. Our Company has deposited the charges as directed and has also initiated
negotiations for settlement of pending issues. The matter is currently pending and the next date of
6.
Our Company received a notice dated June 12, 2008 from Star Den Media Services Private Limited
of outstanding subscription charges in the city of Amritsar. In response to this notice our Company has
dated February 16, 2007. Our Company has deposited the charges as directed and has also initiated
311
7.
Our Company received a notice dated June 24, 2008 from Star Den Media Services Private Limited
of outstanding subscription charges in the city of Mumbai. In response to this notice our Company has
dated June 20, 2006. Our Company has deposited the charges as directed and has also initiated
Tax Proceedings
1.
Siti Cable Network Limited has received a demand order (Order no. SCN- OE II 116/P-60/2000-2001)
dated March 20, 2001, issued by the Additional Commissioner, Income Tax, Circle (11) (1), Mumbai
(“ACIT”), to pay Rs. 2,961 Lakhs towards income tax for the assessment year 1998 to 1999 for, inter
alia, understatement of the number of subscribers and consequent impact on income and increase in tax
liability. The ACIT made an addition of Rs. 8,792 Lakhs and assessed the income of Siti Cable
Network Limited at Rs. 5,265 Lakhs. Hence, Siti Cable Network Limited filed an appeal (CIT (A) –
XI/JCIT-47/IT-81/2001-02) against the said assessment order before the Commissioner of Income Tax
(Appeals), Mumbai. The appeal was partly allowed with the addition of only Rs. 3,708 Lakhs being
disallowed and hence Siti Cable Network Limited filed a further appeal (ITA No. 1368/Mum/1997)
against the order of Commissioner of Income Tax (Appeals), Mumbai before the ITAT wherein while
partly allowing the appeal by its order dated February 5, 2002, the addition of Rs. 4,930 Lakhs was
disallowed resulting in an assessed loss of Rs. 3,373 Lakhs and hence the amount of tax payable was
reduced to nil. The Additional Commissioner, Income Tax, has further filed an appeal (Income Tax
Appeal (Lodg) no. 320 of 2004) against the orders of the ITAT before the High Court of Bombay in
June 2004. Siti Cable Network Limited filed its reply on July 16, 2004 and the matter is currently
pending before the High Court of Bombay.
2.
Siti Cable Network Limited has received a demand order (OI SCN 42/120/2003-04) dated February 16,
2004, issued by the Additional Commissioner, Income Tax, Circle (11) (1), Mumbai, to pay Rs. 8,094
Lakhs towards income tax for the assessment year 2001 to 2002 for, inter alia, understatement of the
number of subscribers and consequent impact on income, increase in tax liability and excess claims in
relation to leave encashment. The ACIT made an addition of Rs. 14,621 Lakhs and assessed the income
of Siti Cable Network Limited at Rs. 14,428 Lakhs. Hence, Siti Cable Network Limited had filed an
appeal (Appeal No. CIT (A) - XI/ ACIT- 11 (1) IT-468/03-04) dated March 26, 2004, before the
Commissioner of Income Tax (Appeals), Mumbai and the appeal was partly allowed, wherein while the
addition of Rs. 14,597 Lakhs was disallowed, the addition of Rs. 24 Lakhs was allowed which resulted
in an assessed loss of Rs. 169 Lakhs and consequently the tax liability was reduced to nil. Siti Cable
Network Limited has further, filed an appeal before ITAT, on July 26, 2004 which is currently pending.
3.
Siti Cable Network Limited has received a demand order (Order No. 17/P 93/06-07) dated December
22, 2006, issued by the Additional Commissioner, Income Tax, Circle (11) (1), Mumbai, to pay Rs.
11,897 Lakhs as income tax for the assessment year 2004 to 2005 for inter alia, understatement of the
number of subscribers and consequent impact on income and consequent increase in tax liability. The
ACIT made an addition of Rs. 36,837 Lakhs and assessed the income of Siti Cable Network Limited at
Rs. 24,954 Lakhs. Against this assessment, wherein while the addition of Rs. 36,104 Lakhs was
disallowed, an addition of Rs. 733 Lakhs was allowed resulting in an assessed loss of Rs. 11,150 Lakhs
even though the total tax liability was reduced to nil. Siti Cable Network Limited has filed an appeal
dated January 18, 2007, before the Commissioner of Income Tax (Appeals), Mumbai which was partly
allowed. Siti Cable Network Limited has filed an appeal dated May 25, 2007 before the ITAT, which is
currently pending.
4.
Siti Cable Network Limited has received a notice of demand (no. ROC.4977/2000/G2) dated October
3, 2000 from the Municipal Corporation of Vizianagaram for failure to furnish the list of
advertisements exhibited for public view through electronic media along with charges as per
Government Order no. 266 dated May 5, 2000. Against this notice of demand and the impugned
Government Order, Siti Cable Network Limited and another have filed a writ petition (no. 25331 of
2000) before the High Court of Andhra Pradesh which by its order dated December 29, 2000 has stayed
312
the notice. The matter is currently pending and the next date of hearing shall be intimated in due
course.
5.
Siti Cable Network Limited received a notice of demand dated October 3, 1996 from the Kanpur Nagar
Nigam for payment of pole tax amounting to Rs. 12.50 Lakhs. Siti Cable Network Limited has filed a
suit for injunction before the District Court, Kanpur restraining the Kanpur Nagar Nigam from
removing cables and other wires installed on the poles in Kanpur. The matter is currently pending and
the next date of hearing shall be intimated in due course.
5.
Pending litigations against our Promoters
A.
Mr. Subhash Chandra
1.
Mr. Sandeep Pal Singh had filed a criminal complaint (criminal complaint no. 1055 of 2000) under
sections 52(a) and 63 of the Copyright Act, 1957 against ZEEL and others, including Mr. Subhash
Chandra before the Fourth Additional Sessions Judge, Thane dated April 13, 2000 for alleged
infringement of the complainant’s copyright of the film ‘Jaan Se Badhkar’. The court passed an order
dated June 3, 2000 directing the respondents to be present on the next date of hearing on June 12, 2000.
Thereafter, the respondents’ revision petition (criminal revision petition no. 37 of 2001) dated March
23, 2001 before the Fourth Additional Sessions Judge which was granted in favour of the respondents
pursuant to its order dated June 28, 2001. Further, a writ petition (writ petition no. 1417 of 2001) was
filed before the High Court of Bombay dated October 16, 2001 by the complainant and the order of the
sessions court was stayed pursuant to the High Court’s order dated February 10, 2003. The matter is
currently pending and the next date of hearing shall be notified.
2.
A criminal complaint (criminal complaint no. 1548/SS/2005) has been filed by Abhudaya Cooperative
Bank Limited against M/s Singhal Swaroop Ispat Limited, Mr. Subhash Chandra and others before the
7th Metropolitan Magistrate. Certain cheques issued by Singhal Swaroop Ispat Limited in favour of the
complainant were dishonoured and thus the complainant filed this complaint under section 138 and 141
of the Negotiable Instruments Act, 1881 against Singhal Swaroop Ispat Limited and its directors,
including Mr. Subhash Chandra. Mr. Subhash Chandra filed a criminal revision application
(application no. 283 of 2005) before the Sessions Court which was dismissed, but Mr. Subhash
Chandra was exempted from personal appearance. As the matter was dismissed on September 19,
2007, a criminal writ petition (no. 2421 of 2007) was filed in the High Court of Bombay. The amount
claimed by the complainant is Rs. 148.98 Lakhs. The matter is currently pending and the next date of
hearing shall be notified in due course.
3.
A criminal complaint (criminal complaint no. 3927/S/2005) has been filed by Ceat Financial Services
Limited against M/s Singhal Swaroop Ispat Limited, Mr. Subhash Chandra and others before the 19th
Court, Ballard Pier, Mumbai. Certain cheques issued by Singhal Swaroop Ispat Limited in favour of
the complainant were dishonoured and thus the complainant filed this complaint under section 138 and
141 of the Negotiable Instruments Act, 1881 against Singhal Swaroop Ispat Limited and its directors,
including Mr. Subhash Chandra. The matter is currently pending and the next date of hearing is
scheduled on May 26, 2008. The amount claimed by the complainant is Rs. 9.45 Lakhs. Mr. Subhash
Chandra has filed criminal revision application (application no. 1500 of 2007) for quashing and setting
aside the process issued against him. As the criminal revision application was dismissed on August 13,
2007, a criminal writ petition no. 1759 of 2007 has been filed before the High Court of Bombay. The
High Court by order dated August 20, 2008 granted ad interim relief and stayed the further proceeding
of the lower court against Mr. Subhash Chandra
4.
A criminal complaint (criminal complaint no. 143/S/2003) has been filed by Maharashtra State Trading
Corporation against Singhal Swaroop Ispat Limited, Mr. Subhash Chandra and others before the 47th
Court, Esplanade, Mumbai alleging that the respondents failed to make the requisite payments as
consideration for certain scrap materials purchased by them. The amount claimed by the complainant is
Rs. 190.77 Lakhs. The matter is currently pending and the next date of hearing shall be notified in due
course. Mr. Subhash Chandra has also filed an application dated July 30, 2008 before the High Court of
Bombay for setting aside the process issued against him.
313
5.
A criminal complaint (complaint no. 1 of 1999) has been filed by Maharashtra State Trading
Corporation against Singhal Swaroop Ispat Limited, Mr. Subhash Chandra and others before the Small
Causes Court. The complainant has filed the complaint under section 3(2) of the Criminal Law
(amendment) Ordinance, 1944 seeking attachment of certain specified properties belonging to the
Singal Swaroop Ispat Limited. Mr. Subhash Chandra has moved application stating that such specified
properties are not owned by him and that he has no interest in the same. The matter is currently pending
and the next date of hearing shall be notified in the due course.
6.
Mahalaxmi Factoring Services Limited has filed a criminal complaint (criminal complaint no. 1976 of
2001) against Singhal Swaroop Ispat Limited, Mr. Subhash Chandra and others before the 2nd
Metropolitan Magistrate, Egmore, Chennai alleging that the respondents defaulted in paying the
consideration for purchase of certain machineries from the complainant. Mr. Subhash Chandra has
been made a party to the complaint in his capacity as a director of Singhal Swaroop Ispat Limited. The
amount claimed by the complainant is Rs. 68.67 Lakhs. The matter is currently pending and the next
date of hearing shall be intimated in due course.
7.
Mr. Agasti Kanitkar has filed a criminal complaint (criminal complaint no. 960 of 2006) against Mr.
Subhash Chandra, in the capacity of the chairman and managing director, Zee Marathi, the news editor,
Zee Marathi and Mr. Arun Mhetre before the Judicial Magistrate First Class, Pune alleging defamation
in a news item telecast on Zee Marathi channel on February 15, 2006. The matter is stayed by an adinterim order of High court dated September 18, 2008. The next date of hearing shall be intimated in
due course.
Mr. Subhash Chandra and the other respondents have filed a criminal writ petition (criminal writ
petition no. 2465 of 2007) before the Bombay High Court dated November 15, 2006 seeking to quash
the process issued against them by the Judicial Magistrate First Class, Pune in the above mentioned
criminal complaint on May 9, 2006. The Judicial Magistrate First Class, Pune had, by an order and
direction dated August 8, 2008 directed Zee News Limited to telecast an apology. The High court by an
order dated dated September 18, 2008 stayed the proceedings before the Judicial Magistrate First Class,
Pune. The matter is posted for final hearing and will come up for hearing in due course.
Civil Proceedings
1.
Mr. Agasti Kanitkar has filed a defamation suit (civil suit no. 1551 of 2008) against Mr. Subhash
Chandra & others and has claimed damages of Rs. 25,00,000 together with interest of 18% p.a. for a
defamatory news item telecast on Zee Marathi Channel on February 15, 2006. The matter is currently
B.
Nil
C.
Mr. Ashok Goel
1.
The Deputy Registrar of Companies, Maharashtra, Mumbai has filed a criminal complaint (criminal
complaint no. 560/SS/2004) against Mr. Ashok Goel and the other directors, erstwhile and present, and
the erstwhile company secretary of Essel Propack Limited before the 19th Court, Metropolitan
Magistrate, Esplanade, Mumbai alleging that the company had failed to take the obtain the approval of
the general body of its shareholders with respect to corporate guarantee of Rs. 10 crores given by the
company to ICICI Bank Limited. Pursuant to an application made by the respondents, the Metroplotan
Magistrate has agreed to compound the offence.
D.
Nil
E.
Ms. Sushila Goel
Nil
314
F.
Nil
G.
Delgrada Limited
Nil
H.
Nil
I.
Nil
J.
Ganjam Trading Company Private Limited (“Ganjam”)
NIL
Past actions intiated by SEBI
1.
SEBI has passed an order dated March 19, 2008 (order no. WTM/TCN/91/IVD2/03/2008) against
ZEEL and also against Churu Trading Company Private Limited, Briggs Trading Company Private
Limited, Prajatma Trading Company Private Limited, Ganjam, Premier Finance & Trading Company
Limited on grounds of aiding and abetting certain entities related to Mr. Ketan Parekh in large scale
market manipulation of shares of ZEEL. Pursuant to the said order, SEBI has warned Ganjam, ZEEL
and the concerned Promoter companies and has cautioned that any similar activity or instances of
violation or non-compliance of the provisions of the SEBI Act, 1992 and the rules and regulations
framed thereunder shall be dealt with stringently.
K.
Churu Trading Company Private Limited (“Churu”)
NIL
Action initiated by SEBI
1.
SEBI has passed an order dated March 19, 2008 (order no. WTM/TCN/91/IVD2/03/2008) against
Churu Trading Company Private Limited, alongwith other Promoters and ZEEL, on grounds on aiding
and abetting certain entites relating to Mr. Ketan Parekh in large scale manipulation of shares of ZEEL.
Pursuant to the said order, SEBI has warned Churu, ZEEL and the concerned Promoter companies and
has cautioned that any similar activity or instances of violation or non-compliance of the provisions of
the SEBI Act, 1992 and the rules and regulations framed thereunder shall be dealt with stringently. For
further details on this matters, see “Action initiated by SEBI” under ZEEL.
2.
Churu Trading Company Private Limited (“Churu”) had received a letter bearing reference no.
IVD/ID2/PKN/KR/CSIL/28870/2004 dated December 20, 2004 (the “Letter”) from SEBI, stating that,
SEBI, in course of investigating into the dealings in the scrips of Cranes, had noticed that Churu was
holding 12 lakh equity shares of Cranes Software International Limited (“Cranes”) as on May 17,
2002, representing 14.25% of the equity share capital of Cranes. Subsequently, 3 lakh equity shares of
Cranes were transferred by Churu to Mr. Shanker Lal Saraf on May 28, 2002.
The Letter stated that Churu was required to disclose any change of more than 2% in its shareholding
of the share capital in Cranes under the provisions of Regulation 13(3) of SEBI (Prohibition of Insider
Trading) Regulations, 1992 (the “Insider Trading Regulations”). However, since the Bombay Stock
Exchange Limited had not received any such disclosure, the Letter asked Churu to offer its comments
in relation to the disclosure requirements under the Insider Trading Regulations.
In response to the Letter, Churu filed a reply pursuant to its letter dated February 1, 2005 stating, inter
alia, that it was not an “insider” as defined under the Insider Trading Regulations and that it had sold
315
the shares of Cranes in tranches in its ordinary course of business. Further, as any default in the
disclosure requirements under the Insider Trading Regulations by Churu was unintentionally, it
requested SEBI to treat the matter leniently.
Subsequently, SEBI, pursuant to the Notice, stated that Churu had been holding 9 lakh equity shares,
representing 10.69% of the equity share capital, of Cranes, as on September 30, 2002, which was
reduced by more than 2% of the equity share capital of Cranes by the quarter ending December, 2002.
As Churu had failed to comply with the disclosure requirements under the Insider Trading Regulations,
it was asked to show cause as to why an inquiry should not be held against it in terms of Rule 4 of the
SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 and
why a penalty should not be imposed under the provisions of the Section 15A(b) of the SEBI Act,
1992.
In response to the Notice, Churu filed a consent application dated March 24, 2008 (the “Consent
Application”) with SEBI requesting SEBI, inter alia, to drop the enquiry and penalty proposed to be
conducted and imposed under the Notice.
Since Churu had not furnished certain details, namely, contact number, facsimile number and e-mail
address in the Consent Application, SEBI issued a letter bearing reference number EFD/DRAII/SPV/136218/2008 dated August 28, 2008 to Churu, requiring it to furnish such details within five
days from the date of issuance of the letter. Churu, pursuant to its letters dated August 29, 2008 and
September 2, 2008 furnished such details to SEBI, and reconfirmed the said details pursuant to its letter
dated September 5, 2008 to SEBI.
Subsequently, pursuant to a letter dated September 11, 2008 issued by Churu seeking permission to
offer Rs. 1,00,000 towards settlement terms and Rs. 50,000 towards administrative expense, and a
letter dated October 21, 2008 bearing reference number EFD/DRAII/PT/SPV/141811/2008 issued by
SEBI intimating its approval to settle the matter on such payments, Churu paid a total amount of Rs.
1,50,000 pursuant to its letter dated October 31, 2008 to enable the issuance of an order by SEBI as per
the consent terms. Pursuant to a consent order dated November 11, 2008 bearing reference number
EAD/SD/DT/143861/08, SEBI has disposed the adjudication proceedings against Churu. However,
notwithstanding the

dish tv india limited

Transcription

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